Smoking bans and casinos

Casinos in Illinois have posted double-digit revenue declines since a smoking ban took effect there in January. And it's not primarily because high air fares stop tourists from visiting the Windy City in search of a game of chance.

"The smoking ban is having a major impact," Tom Swoik, head of the Illinois Casino Gaming Association, told The Wall Street Journal last week.

A 2005 research paper by the Federal Reserve Bank of St. Louis says Delaware's "racinos" -- racetracks with slot machines and video poker -- saw their revenue decline by $94 million a year after a smoking ban was implemented there in 2002.

And In Atlantic City -- where casinos are now under a partial smoking ban that keeps gamblers from lighting up on 75 percent of the casino floor -- a full ban is scheduled to go into effect Oct. 15, at which point smokers are widely expected to flee to gambling halls in Pennsylvania and Connecticut.

But the places gamblers can go to escape the smoking bans are narrowing. Efforts to extend existing smoking bans are now expected in Iowa, Missouri and Nevada. Pennsylvania casinos instituted a closely watched partial smoking ban last week. And it turns out misery loves company: To create a level playing field, the Casino Association of New Jersey -- which unsuccessfully fought the Atlantic City ban -- is now arguing in favor of smoking bans in other states. In an e-mail statement, the association's president, Joseph Corbo Jr., writes: "We are hopeful that other nearby gaming jurisdictions, notably Pennsylvania and Connecticut, soon enact smoking bans."

Which should solve the problem, right? If gamblers no longer have any smoking-allowed alternatives, they'll simply have to shrug their shoulders and gamble without smoking, causing everything to even out in the end. Right?

Not necessarily.

"Gamblers like to smoke and drink while they gamble," explains Harvey Perkins, a senior vice president at Spectrum Gaming, a gambling consulting company in Linwood, N.J. "You've got three co-dependent bad behaviors that go together."

"I've never experienced gambling without smoking," says Mr. Perkins, a former casino executive who has studied the impact of smoking bans on gambling revenue in Canada, New Zealand and Australia. When the full smoking ban goes into effect in Atlantic City, he figures he'll have to interrupt his gambling to have a cigarette. And such breaks may persuade gamblers to walk away, he explains.

"The joy of playing is that you're focused on the game. All of life's hassles disappear, and the rest of the world stops for a little bit.

"But once you have to get up for the desire to have a cigarette, that's it, you're leaving the zone. You're pulled back into reality. And it's easy to walk away."

Losing a few nickel players may be no big deal. The real problem is holding onto the high rollers. "How do you tell a guy who comes in and wants to drop $150,000 at a table, how do you tell him he can't have a cigarette?" asks Frank Fantini of Fantini Research, a Delaware outfit that studies casinos.

The "perfect storm" metaphor grows a bit shopworn, but the impact of the smoking bans is hitting casinos at a time when larger economic woes -- airline flight reductions, cash-strapped consumers and the credit crisis -- have already driven down revenues from Las Vegas to Connecticut. Put it all together and gamers warned The Journal that revenue losses are now steep enough to threaten staff cuts and drastically reduce state tax revenues.

Until recently, casinos had persuaded lawmakers to exempt them from state smoking bans -- like the partial exemption won by Nevada casinos.

But the nanny-staters never stop, meaning casino executives who embraced "compromise" solutions "fed the beast" with smoking bans in restaurants and supermarkets encouraging the prohibitionists, like a "use up the clock" football defense that allows the opponent to move steadily down to your 20 yard line.

And Nevada faces a special problem, compared to the more parochial gambling locales. Many of this town's high-rollers are foreigners, hailing from Asian or Latin American nations where smoking is still considered an acceptable legal option for adults.

Tourists used to come to Nevada from halfway 'round the world to enjoy its 24-hour "anything goes" atmosphere. The nanny-staters now want to make the Silver State about as exciting as Dayton or Omaha.

Will Nevada's casinos just shrug and go along? Or will they finally pick a line on which to stand and fight?

Nevada's smoking ban is rarely enforced. Smoking continues at plenty of Vegas bars within a biscuit's throw of tables where food is being served. Do we really need more unenforceable nanny-state edicts? Or is it time to return Nevada to the grown-ups -- before it's too late?