Atlantic City Casino Smoking Ban Could Impact New Jersey’s Gambling Industry

A new report released Wednesday says the renewed push to ban smoking inside Atlantic City casinos could cost up to 2,500 jobs and nearly 11% of casino revenue.

The Casino Association of New Jersey commissioned the report and the independent gambling research firm, Spectrum Gaming Group, conducted it. It released as casinos struggle to rebound from the coronavirus pandemic.

The Spectrum report concludes that 10% of the Atlantic City workforce is at risk if smoking is banned. This could result in a potential loss of “between 1,000 and 2,500 jobs,” according to the report.

Additionally, Atlantic City casinos would see a “substantial decline of up to 10.9% in gaming revenue, $93 million in non-gaming revenue, and a loss of between $17.2 million and 44 million for the state of New Jersey and the city of Atlantic City in tax revenue.”

While the Casino Association of New Jersey has not recommended whether smoking should be banned, New Jersey Governor Phil Murphy has said he will sign a smoking ban into law if the bill is passed.

The bill, NJ S1878/A4541, amends the New Jersey Smoke-Free Air Act. This would end smoking in casinos and casino simulcasting facilities.

Spectrum: AC Needs Gamblers Who Smoke

Key findings from Spectrum’s study show the impact of an Atlantic City casino smoking ban “could cause a devastating effect to the community and state,” said Joe Lupo, president of the Casino Association of New Jersey (CANJ).

“The Atlantic City casino industry is the economic backbone of South Jersey,” Lupo said in a statement released by CANJ on Wednesday. “This independent report was commissioned to ensure a complete understanding of the ramifications of a ban on the city and the region. Now is not the time to enact a smoking ban.”

According to the Spectrum report, the effect on Atlantic City casinos without smokers would include:

  • As many as 2,512 jobs lost, which is approximately 10% of the casino workforce
  • Casinos would see a 10.9% decline in gaming revenue
  • Up to a $93 million, or 6.5%, decline in non-gaming revenue for casinos
  • Up to a $44 million decrease in tax revenue. This includes up to a $25.7 million decrease in revenue to the Casino Revenue Fund. The fund benefits programs for seniors and disabled in New Jersey.
  • As much as a $4 million decrease in the former CRDA obligation. This is provided to the city of Atlantic City for its budget and debt service.

Atlantic City Employment, Visitors Are Low

Statistics presented by Spectrum conclude that 2022 isn’t the time to implement a smoking ban at AC casinos, Lupo said. See the Spectrum report summary for more details.

Reasons, according to CANJ, include:

  • Employment is at a 20-year low at Atlantic City casinos
  • Atlantic City casinos have “less than 50% of the workforce from 2003”
  • Visitors to Atlantic City also are at a 20-year low
  • Atlantic City land-based casino revenue has yet to return to pre-COVID-19 levels. They’re seeing a 5% decline in 2021 compared to 2019

Could Smokers Leave Atlantic City Casinos?

Currently, Atlantic City casinos allow smoking on 25% of the casino floor.

According to the Spectrum report, entitled ‘Potential Impacts of an Atlantic City Smoking Ban on Gross Gaming Revenue,’ approximately 21% of Atlantic City visitors are smokers.

Atlantic City casinos claim that banning smoking is likely to send those gamblers to other states where you can smoke in casinos. Lupo said:

“This new report clearly demonstrates that a smoking ban would have long-term financial implications for the industry and region, placing Atlantic City casinos at a competitive disadvantage with Pennsylvania casinos where smoking is permitted.”

The Spectrum report cited three main reasons that an Atlantic City casino smoking ban has the potential to negatively impact New Jersey casino revenue. They include:

  • Defection: The report estimates that smokers account for 26.1% to 31.3% of casino revenue and if smoking is banned, smokers could go where smoking is permitted. There are casino options in eastern Pennsylvania and two tribal casinos in Connecticut.
  • Reduced visitation: The percentage of Atlantic City casino visitors who smoke would likely decline to about 13%, which is equivalent to the ratio of smokers in the general adult population in New Jersey and would result in a decline in gambling revenue.
  • Decline in playing time: Smokers will need to take breaks from their gambling if a smoking ban is enacted, which may result in less gaming time.

Dealers Support Smoke-free Workplaces 2020

Between March 16, 2020, and July 4, 2021, Atlantic City casinos temporarily banned smoking inside because of COVID-19. The ban lifted when New Jersey rolled back most pandemic restrictions.

Atlantic City casinos allowed cigarette smokers to light up inside on July 4 weekend last year. This came after prohibiting them from doing so for nearly 12 months due to the COVID-19 pandemic.

Gov. Murphy banned smoking as a virus transmission-prevention measure when the casinos reopened in July 2020.

The previous ban expired, but opponents want to make the ban permanent at Atlantic City’s nine casinos.

Advocates, Dealers Want Casino Smoking Ban

By the end of the 2021 summer, anti-smoking advocates who wanted to change AC casinos did something. They took their case to the industry’s largest annual gathering in Las Vegas.

In Oct. 2021, Americans for Nonsmokers’ Rights (ANR) held a press conference during Global Gaming Expo (G2E) at The Venetian Expo to speak out against indoor smoking at casinos. Atlantic City table games dealers behind the Facebook group Casino Employees Against Smoking Effects (CEASE) voiced opposition, too.

At the time, groups said the ongoing coronavirus pandemic in 2021 made the issue even more pressing.

Smoking ban equals lost business, Atlantic City casinos say

Atlantic City casinos contend that indoor smoking, permitted on 25% of the gaming floor, is a necessary element of business in a highly competitive region.

“Going completely non-smoking would place Atlantic City casinos at a competitive disadvantage with other nearby casinos that allow smoking,” the Casino Association of New Jersey said in a statement. “A smoking ban would have a significant adverse effect on Atlantic City, resulting in a decline in customers which would cause job loss, and ultimately a decline in tax revenue.”

Will Trenton Make Atlantic City Casinos Smoke-free?

Some NJ legislators want to remove the loophole in the state law which allows AC casinos to permit indoor smoking. None of the bill’s current sponsors represent districts in southern New Jersey.

Murphy, a Democrat who won re-election in 2021, supports banning smoking inside Atlantic City casinos.

“You should assume that I will sign it,” Murphy said about the casino smoking bill while a candidate for re-election.

Atlantic City’s governing body supports the state Senate’s casino smoking ban bill.

 

Photo by: Thanasis F / Shutterstock.com

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