Vol. 3, No. 10, October 2006
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Smoking Gun
Why removing the casino floor exemption to the smoking ban is a bad idea.
If the casino exemption to the statewide smoking ban is lifted—resulting in smoking being banned on our casino floors—CANJ believes that it will have a significant negative impact upon our industry and upon the livelihoods of thousands of our employees.
If the industry, through both management and employees, fails to successfully address this problem, we could find ourselves in a much weaker competitive position in the very near future.
In December of last year, the New Jersey smoking ban was enacted with an effective date of April 15, 2006. Fortunately, legislative leaders in the state capitol were sensitive to the concerns that prohibiting smoking on casino floors would have a negative financial impact statewide. Specifically, our casinos compete with other gaming jurisdictions including Las Vegas and Connecticut, and soon Pennsylvania, which do not have smoking bans.
In order to permit our industry to compete on equal footing with these jurisdictions, to the benefit of the entire state, casinos were exempted. The experience of casinos in Delaware referenced below is proof that such an exemption is essential.
However, only weeks after this law went into effect, Assemblyman Jim Whelan, whose legislative district includes Atlantic City as well as most of the city’s residential suburbs, sponsored a bill that would remove the casino floor exemption.
In his previous role as mayor of Atlantic City, Whelan did many positive things for Atlantic City and was a supporter of our industry as a catalyst for improving Atlantic City (and as an assemblyman he has been supportive of our industry on other issues, such as his opposition to slot machines at the Meadowlands). However, his first significant move as an assemblyman, and his continued efforts with regard to the smoking ban, we believe will have a significant and permanent detrimental impact upon our industry and the livelihoods of our employees, many of whom we believe will lose their jobs as a result of this legislation.
While Assemblyman Whelan indicates that he sponsored this legislation out of fairness to the non-casino bars and restaurants that were impacted by the smoking ban, we point out that all of our non-casino bars and restaurants also are subject to the smoking ban. He also has indicated that he is doing this to benefit the health of casino floor employees. However, Local 54, the labor union that represents the health and welfare of the largest number of our employees including the cocktail servers on the casino floor, has come out against Whelan’s smoking ban. In addition, at a recent “rally” that Assemblyman Whelan participated in, attendance and enthusiasm were minimal, indicating that the majority of our employees are not in favor of a smoking ban.
The casino exemption to the smoking ban is of critical importance to our industry for several reasons, including:
• It is a huge competitive issue as smokers, who are a significant component of our market, will likely flock to those casino jurisdictions that do not have a smoking ban, negatively impacting our marketplace, including the state, through decreased tax revenues, and our employees, some of whom will be laid off due to decreases in business volumes.
• Casinos are fundamentally different from other indoor sites. Our industry caters to a diverse market of different people and cultures, many of whom enjoy smoking while they partake in gaming.
One of the basis for our beliefs is the report that was issued by the international accounting firm of PriceWaterhouse Coopers, which studied the effect of the smoking ban that was imposed on Delaware casinos and applied the Delaware experience to New Jersey if smoking were banned in our casinos.
PWC determined that the state would lose $93 million of tax revenue in the first two years of the ban (these losses would continue in future years) and that 3,377 employees would be laid off due to decreases in business volumes. Since this report, there have been other gaming jurisdictions that have enacted smoking bans and have likewise seen their business volumes decline while bordering gaming jurisdictions have benefited.
Given these serious ramifications to the state’s tax revenues, the casino employees’ job security and incomes and the overall health of our industry, we suggest that the necessary time be taken to study the issue and discuss it with state policy-makers, union leaders, employees and other interested parties.
This would include exploring the capabilities of air filtration systems and related technology that might very well alleviate the concerns of the proponents of a casino smoking ban, but that would not put our casino industry’s continued success at risk.
