JoAnna Haugen
JoAnna Haugen

Insight

 A decision to ban smoking in the Asian gambling mecca of Macau prompted a Wall Street analyst to predict that the casinos of Las Vegas might be next.

Although there is no current legislation in Nevada to implement a smoking ban in casinos, Deutsche Bank gaming analyst Andrew Zarnett recently suggested that a complete smoking ban could be implemented in Nevada within the next two years.

Macau’s smoking ban takes effect October 6, and Zarnett cited this as a potential trendsetter for other destinations that currently allow smoking on casino floors. Macau produced $45.2 billion in gaming revenue in 2013, four times that of Nevada’s casino industry, which hit $11 billion in 2013.

Two major casino companies with properties in Las Vegas declined to comment for this article, noting they don’t take any particular stance on this highly politicized issue and that they comply fully with the law.JoAnnaHaugen

Zarnett also noted that the continued study of second-hand smoke health dangers led him to believe that smoking may be banned in Nevada casinos within the next 24 months.

“It clearly adds incremental pressure for the introduction of similar legislation in Las Vegas,” he said in the report, in part because Wynn Resorts, Las Vegas Sands Corp. and MGM Resorts International all currently have casino resorts in Macau.

Zarnett predicted that if such a ban existed, Nevada could experience a 7.5% decline in gaming revenue.

David Schwartz, director of the Center for Gaming Research at University of Nevada, Las Vegas, said it’s hard to say whether a smoking ban in casinos would have that much of an economic impact on Las Vegas, but said it was possible.

“In other jurisdictions where smoking bans have been enacted, there has been a drop in gaming revenues in the short term,” Schwartz said.

Delaware’s gaming revenue decreased 11.3% following a smoking ban in 2002, while Illinois saw a 20.9% drop after implementing a ban in 2008. Bronson Frick, associate director of Americans for Nonsmokers’ Rights, said that many factors can affect a casino company’s gaming revenue, including the general state of the economy, gas prices and weather, and that it is impossible to point specifically at a smoking ban to explain a decrease in revenue.

Frick pointed out that, of the 23 states with commercial casinos, 18 have already outlawed smoking in casinos. Additionally, 82% of people in the United States are non-smokers.

“It’s a major trend,” Frick said. “And it’s also what people increasingly expect.”

In addition, many poker rooms and sports books, are already smoke-free, and the World Series of Poker became a smoke-free event for the first time in 2014, as are many other events on casino floors. 
 

Frick believes it is just a matter of time before a full ban is put in place.

“There is no question that eventually the Vegas casinos will be one-hundred percent smoke-free,” he said.

He also said Las Vegas companies can learn from casinos that are already smoke-free to make such a transition easier, if or when a ban is enacted. For example, smoke-free casinos in other states have ensured exits to outdoor areas are easily accessible to patrons.

“If someone wants to light up, they simply step outside to an outdoor patio, either from the food and beverage area or from the casino floor, and then they come back in without harming the health of other people,” Frick said. 


Corrections: A Nevada law that in 2006 banned smoking statewide in all enclosed workplaces has been repealed over the years; the Nevada Clean Indoor Air Act now permits smoking in stand-alone bars, taverns and saloons that serve alcohol and food in which patrons under 21 years of age are prohibited from entering, retail tobacco stores, brothels and private residences. Additionally, smoking is allowed in areas of convention facilities during tobacco-related trade shows that are closed to the public. A previous version of this article stated that in Las Vegas, smoking was banned in all public places except casino floors.

Also, Illinois saw a 20.9% drop after implementing a ban in 2008; a previous version of this article said that the ban was implemented in 2007.
 

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