Saturday, February 14, 2009

Stakes high in Missouri smoking debate

Smokers account for only about one-fifth of a casino's patrons, according to a University of Nevada-Reno study last year. But year-end industry numbers suggest that losing those gamblers - or making them get up from their machines to go outside to smoke - is having a crushing financial impact where smoking in casinos is banned.

A smoking ban at Atlantic City casinos was lifted late last year after slot machine revenues dropped nearly 20 percent in the first two weeks after the ban took effect. In Pennsylvania, which had allowed smoking on 25 percent of casino floors, the limit was raised to 50 percent after casinos showed that slots in the smoking areas made more than twice as much money as those in nonsmoking areas.

Any attempt to ban smoking in Missouri casinos will likely face fierce resistance from a gambling industry that spent $15 million last year in support of a successful ballot measure to remove the state's loss limits. The stakes will be even higher this time for the casinos, which will point to Colorado and Illinois - the only two gambling states to fully ban smoking in casinos - as examples of what could happen if smokers are sent packing.

Illinois' gambling revenues fell almost 21 percent - about $415 million - last year, according to the American Gaming Association. The result was a drop of $177 million in taxes paid to the state, with jurisdictions where the casinos are located losing $22.6 million.

Colorado banned smoking on the same day as Illinois. And with a gambling revenue drop of 12.3 percent - about $100 million - Colorado also joined Illinois as the only other state with a double-digit decline in 2008.

Meanwhile, casinos in all three states that border Illinois saw increased gambling revenues, led by Missouri with a 5.66 percent jump. Iowa gambling revenues rose 4.14 percent, and Indiana casinos saw a 1.65 percent increase.

“I think we've lost gamblers who aren't coming back,” said Tom Swoik, executive director of the Illinois Casino Gaming Association. “We surveyed some people who frequented the casinos - pretty good patrons - and some said they are not coming back if they don't get to smoke.”