The New Jersey State Senate is considering a bill to ban smoking within Atlantic City casinos, with a vote potentially taking place later this month.
The bill to ban smoking has wide bipartisan support, including the governor, 26 senators and 57 Assembly members who are co-sponsors of the proposed legislation.
Lawmakers would need to take action on the bill before the current legislative session ends in early January 2024. In opposition is the Casino Association of New Jersey, which includes the seven casinos in Atlantic City, which have a limited smoking ban currently.
A 2022 study from Spectrum Gaming Group, commissioned by Atlantic City casinos, detailed the potential effects of banning smoking on those properties. And some of the results of that study are eye-opening from the casinos’ perspectives.
How Atlantic City casinos approach smoking now
Under a city ordinance passed in 2007, Atlantic City casinos must designate 75% of their gaming floor as smoke-free. In 2008, the city approved an ordinance that ordered all casinos smoke-free. But that rule was repealed less than a month later, and casinos were required to go back to the 75% smoke-free rule.
The casinos commissioned a study by Spectrum Gaming Group to analyze potential negative effects of banning smoking. That study makes several predictions about what might happen if the ban is passed.
In the 49-page report titled “Potential Impacts of an Atlantic City Casino Smoking Ban on Gross Gaming Revenue,” Spectrum estimates that 21% of Atlantic City casino players are smokers. They also think a ban on smoking would stop some of those people from visiting casinos in New Jersey as often.
Spectrum looked at the gross gaming revenue (GGR) impacts when casino smoking bans were instituted in other states, including Delaware and Illinois, as well as in the city of New Orleans.
On the other side, casino workers are anxious to eliminate smoking in the casinos as a health issue. Some spend as much as 50-60 hours weekly on the gaming floor.
“[Passing a smoking ban is] the only way to ensure casino employees do not fall victim to preventable, untimely deaths and serious illnesses from secondhand smoke,” Nicole Vitola, a dealer at Borgata Atlantic City, said during the latest Senate hearing.
As much as an 11.9% decrease in GGR with smoking ban
Most alarmingly, according to the Spectrum report, “a smoking ban would result in a GGR decline of between 5.0% and 11.9% among patrons who smoke.”
Furthermore, non-smokers buoyed by the chance to breathe in fresh air may show up in larger numbers, leading to a potential “increase their play by 1.0% to 1.5% (in GGR),” the report reads.
Other findings in the commissioned study, suggest that:
- A smoking ban would cause a decline in the casinos’ non-gaming revenue of 3.0% in the low case and 6.5% in the high case.
- Using 2019 (pre-COVID-19) data as a basis, Spectrum estimates an Atlantic City casino smoking ban would lead to declines in NJ gaming tax revenue of $10.7 million to $25.7 million.
- A decrease in tax revenue due to a lowering of GGR at casinos would lower the contributions to the NJ Casino Revenue Fund (potentially $1.7 to $4.0 million), as well as funding of the Casino Reinvestment Development Authority of as much as $17.2 million and $44 million.
- There might be a net loss of between 1,021 and 2,512 casino jobs if the state bans smoking completely on the gaming floor.
Casinos are also worried that fierce competition for customers in a small geographic region will lead to economic pressures on the bottom line.
According to the findings there is an intense “competition for casino patrons in the Northeast/Mid-Atlantic region is fierce, with 32 casinos operating within a 150-mile radius of Philadelphia.” Those casinos generated a total GGR of $11.8 billion for the 12-month period ending August 2021, including $8.5 billion from live slots and table games.
But, if the conservative estimated losses from a smoking ban materialize (5 percent), as much as $590 million in GGR could disappear, like a puff of smoke.