With fewer Americans smoking than ever, will Nevada casinos ever go smoke-free? | nnbusinessview.com

With fewer Americans smoking than ever, will Nevada casinos ever go smoke-free?

Since the Nevada Clean Indoor Air Act was adopted in 2006, only one of the 334 casinos built on Nevada soil has opted to go smoke-free, the Fernley Nugget.
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RENO, Nev. — As Americans grow more and more health-conscious — from the quality of food they eat to the quality of fitness they get — the smoking population is beginning to slide. In fact, according to the Centers for Disease Control and Prevention, smoking across the country has dipped from 20.9 percent in 2005 to 15.5 percent in 2016.

In response, 26 states have enacted statewide bans on smoking in all enclosed workplaces, including bars and restaurants. However, there is a $70 billion industry where tobacco smoke will continue to linger for the foreseeable future: casinos.

In Nevada, the birthplace of gambling, the statewide Nevada Clean Indoor Air Act was adopted in 2006. The act prohibits smoking in most public places and indoor workplaces, excluding strip clubs, brothels, bars and casinos that prohibit patrons under 21 years of age.

Since, only one of the 334 casinos built on Nevada soil has opted to go smoke-free, the Fernley Nugget. Sure, some casinos have carved out smoke-free spaces here and there, but the remaining 333 casinos are sticking to their smoke-friendly comforts.

According to Reno casino executives who spoke with the NNBV, smoking plays too big of a hand in a casino reaching its bottom line to ignore.

‘The demand is still there’

“It wouldn’t be something we voluntarily entertained,” Christopher Abraham, senior vice president of marketing at Grand Sierra Resort in Reno and SLS Las Vegas, said of a smoking ban.

Abraham said GSR has a small non-smoking gaming section by its front entrance with approximately 100 machines.

“It performs very well,” said Abraham, who declined to give actual figures. “We have a segment of players that enjoy that section.”

Meanwhile, Reno-based Eldorado Resorts CEO Gary Carano said the performances of smoking and non-smoking gaming areas are like “night and day.” Eldorado Resorts owns and operates The Row (Eldorado, Silver Legacy, and Circus Circus) in downtown Reno.

“The non-smoking areas that we have in our casinos do not perform nearly as well in Reno as the smoking areas,” Carano said.

He pointed to the citywide smoking ban in Baton Rouge, Louisiana, as a recent example of casinos taking a financial hit.

In June, Baton Rouge’s three riverboat casinos saw their winnings drop 15.6 percent as a result of the ban on smoking, according to a report by the The Advocate, a Baton Rouge-based newspaper.

“Anywhere you look, if they (casinos) go non-smoking, you take a 20 to 25 percent haircut on your gaming revenues,” Carano said. “If it wasn’t, we’d go non-smoking tomorrow. But, the demand is still there.”

Anti-smoking argument

Chris Pristos, a professor of nutrition at the University of Nevada, Reno, challenges that narrative. In 2006, leading up to the vote on the Nevada Clean Indoor Air Act, Pristos did a study that examined the number of gamblers who smoke. Over a three-month period, Pristos and his team observed roughly 14,000 gamblers in Las Vegas, Reno-Sparks and Lake Tahoe casinos.

“The key findings of that study were, despite what gaming executives and their main lobbyists were saying, most gamblers do not smoke,” Pristos said. “The percentage of gamblers who smoke mirrored what the national average was at the time (20.9 percent).

“I think (casinos) just haven’t really studied the situation that closely to really understand that they would not lose business,” he continued. “In fact, there have been studies that show if you ban smoking, then the non-smokers would come here more and more and use the facilities. With the overall decreasing mount of smokers nationally, I think that would be a positive thing for business.”

Matt Tosum, a professor of economics at UNR, told the NNBV he’s in the process of conducting a study on what the economic and fiscal impacts would be if Reno-Sparks casinos were to ban smoking. Tosum was unable to reveal any findings thus far, adding that the study would likely be completed in the spring.

On the health side of the issue, Pristos was also part of a study that concluded that Nevada’s partial statewide smoking ban in 2006 decreased hospital admissions for heart attack and stroke — two major health conditions caused by secondhand smoke — and significantly reduced expenditures for healthcare.

Specifically, in the three years following the Nevada Clean Indoor Air Act, the state saw a decrease in hospital charges of $92.1 million for heart attack ($5.1 million Medicaid and $33.2 million Medicare as payers) and $48.4 million for stroke ($4.2 million Medicaid and $21.5 million Medicare), according to the study.

“From the state’s perspective, the amount of money the state would not have to pay toward Medicaid would greatly offset any potential loss in revenue from gaming taxes,” Pristos said. “Even if you bought into the idea that there would be some lose in gaming revenues, that would be 10 times offset by the amount of funds that we would save on that (Medicaid).

“So the economic impact of banning smoking would be great.”

Too big of A gamble

Nevertheless, with revenues on the rise, both casinos are likely a long ways away from rolling the dice with completely smoke-free gaming.

In October, the total gaming win in Nevada topped $1 billion for the fifth time this calendar year, a feat that had not happened since 2007, according to the Gaming Control Board. This year, Washoe County casinos are up 4.5 percent for the calendar year as of October, raking in $310.9 million.

Whether or not a dwindling U.S. smoking population impacts those numbers remains to be seen. According to peer-review science journal PLOS One, America’s smoking prevalence is projected to dip below 14 percent by 2030.

“There could be a time when all of a sudden there’s so much of the population that is not smoking that casinos could turn to non-smoking,” Carano said. “But it’s not there yet — it’s not even close to being there.”

Abraham, meanwhile, doesn’t see it happening at all.

“I don’t ever really foresee a scenario that we would eliminate smoking for players,” he said.




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