Amid a renewed push to ban smoking in Atlantic City’s casinos, a new report released Wednesday predicts that doing so could cost up to 2,500 casino jobs and nearly 11% of casinos’ revenue as they struggle to rebound from the coronavirus pandemic.
The independent gambling research firm Spectrum Gaming Group compiled the report that supports casinos’ longstanding contention that eliminating smoking would hurt their business, deprive New Jersey of tax revenue and put thousands of people out of work.
The Casino Association of New Jersey commissioned the report, which did not recommend whether smoking should be banned, an option that is gaining renewed support in the state Legislature. New Jersey’s Democratic governor, Phil Murphy, has said he will sign a smoking ban into law if a bill is passed.
Among other findings, it determined that smokers, who account for 21% of Atlantic City gamblers, are worth more to casinos than non-smokers in that they tend to lose more money and spend more on non-gambling items.
Joe Lupo, president of the casino association and of Atlantic City’s Hard Rock casino, said Atlantic City “faces some very dire issues.”
He said casino employment and visitation to Atlantic City are both at 20-year lows, and in-person gambling revenue has yet to return to pre-COVID levels, down 5% in 2021 compared to 2019.
“Now is not the time to enact a smoking ban,” he said, adding that doing so “could cause a devastating effect to the community and state.”
Lupo said Atlantic City casino executives are to speak with the governor this week about their concerns.
Smoking is allowed on 25% of the casino floor in Atlantic City. The casinos claim that banning it would send smokers fleeing to neighboring Pennsylvania, where many casinos allow smoking.
A group of Atlantic City casino workers, aided by national non-smoking groups, has been pushing for over a year for New Jersey to close the loophole in its public smoking law that allows it to continue in casinos; it is banned in most other indoor spaces.
They complain of developing respiratory ailments and other harm from breathing second-hand smoke, despite the millions invested by casinos in filters and air purifying technology.
Legislation to end casino smoking died in last year’s legislative session, but has been reintroduced this year, and has garnered bipartisan support, including from a former governor, Democratic state Sen. Richard Codey.
Atlantic City briefly banned smoking for four weeks in 2008, but dissatisfied with the results, quickly restored it to the current 25% level. In the first week of the ban, casino winnings declined by 19.5%, according to casino workers union officials and state regulators.
The report asserted that between 1,021 to 2,512 jobs could be lost in the first year of a smoking ban in Atlantic City. Spectrum used data from 2019 that found that each casino job was supported by $155,008 of gambling revenue.
They also interviewed casino executives, workers and customers, and anti-smoking advocacy groups, and studied the experience of other states that have banned casino smoking.
At the high end of its projections, the report says 10% of Atlantic City’s casino workforce could lose their jobs if smoking is banned.
It also found that with a smoking ban, non-gambling revenue would fall by up to $93 million, or 6.5%, and tax revenue would fall by as much as 44%.
The report also acknowledged that some non-smoking patrons would be more likely to visit casinos if smoking was banned. But the report found that the extra business would not be enough to offset an overall decline in gambling revenue.
It does not expect every smoker to stop coming to Atlantic City’s casinos if smoking is banned. About 13% of smokers would still visit casinos, according to the report, and they also have the option of gambling online.
But that would hurt the casinos: the report says casinos keep less than 10% of online gambling revenue, with the rest going to online operators, tech partners and related costs.