Atlantic City Casinos Cling to Smokers Amid Tobacco-Free Push

Bookmark

It took a pandemic to halt smoking inside more than 1,000 U.S. gambling venues. Now that the economy is reopening, tobacco opponents are urging elected officials and casino operators to make the restriction permanent.

In New Jersey, the casino smoking ban -- like indoor masking, capacity restrictions and other statewide emergency rules-- will be lifted next month, so long as hospitalization and vaccination trends continue. Many state officials say they’re not ready to advocate for a smoke-free Atlantic City.

“It’s an industry that’s struggling quite a bit,” said Senate President Steve Sweeney, New Jersey’s highest-ranking elected state official, in an interview. “The argument before was that you’re going to chase away a percentage of their business, and nobody’s been able to disburse that thought process.”

The pandemic has given anti-tobacco activists new ammunition in the U.S., where 75% of states have some form of smoking ban. Current and former smokers are more likely to get severely ill from Covid-19, according to the Centers for Disease Control and Prevention. The Food and Drug Administration on April 29 said it will seek the prohibition of menthol cigarettes and flavored cigars, citing their disproportionate impact on Black smokers, 85% of whom choose menthols. Similar efforts had failed in the past, but that was before the arrival of a virus that disproportionately killed people of color.

Atlantic City Casinos Cling to Smokers Amid Tobacco-Free Push

Temporary Bans

Casinos, which paid more than $10 billion in taxes to U.S. state and local governments in 2019, are exempt from smoking bans in many places. But during Covid, New Jersey, Pennsylvania and Michigan issued temporary bans at gambling destinations to help cut transmission of the virus as venues reopened. The directives reignited calls to outlaw the practice permanently.

“With Covid-19, it’s time to finally end indoor smoking in hospitality gaming workplaces,” Americans for Nonsmokers’ Rights, a Berkeley, California-based group lobbying the three states for permanent bans, said in a statement. “Indoor smoking is an urgent respiratory health hazard that can be easily addressed by shifting smoking to outdoor areas and away from staff.”

The issue requires a balance of public health and fiscal priorities. The debate is particularly delicate in New Jersey, where Phil Murphy is one of just two U.S. governors facing re-election in November. The state collected $255 million in tax revenue from Atlantic City casinos in fiscal 2020. The casino money is deployed to provide transportation assistance, vocational rehabilitation and other programs for seniors and those with disabilities.

Murphy, a Democrat, broadened the state’s 2006 indoor-smoking ban in 2019 to include public parks, historic sites, beaches and boardwalks, but left the Atlantic City loophole in place. He told reporters on May 5 that he has “not developed a view” on whether to make his temporary no-smoking order in casinos permanent.

“I’ve been advocating for this bill for years -- it doesn’t make sense that it’s not been banned,” said Senator Joseph Vitale, a Democrat, chairman of the Senate health committee.

The Casino Association of New Jersey, representing Atlantic City’s nine gambling resorts, says a post-pandemic smoking crackdown would send patrons to neighboring Pennsylvania. New Jersey casinos, boosted by Internet and sports betting, had total gambling revenue of $3.29 billion in 2019, the most since 2010. Though remote gambling soared during the pandemic, gambling revenue dropped by 18% in 2020, to $2.87 billion, after casinos were temporarily closed and re-opened with capacity and other restrictions.

“A smoking ban would have a significant adverse effect on Atlantic City, resulting in a decline in customers which would cause job loss, and ultimately a decline in tax revenue that benefits the state and local economy, as well as New Jersey seniors and persons with disabilities,” the Casino Association said in a statement.

‘Variety of Choices’

Some operators have already gained experience in catering to visitors who don’t smoke.

MGM Resorts International operates smoke-free casinos in Massachusetts and New York in addition to its Borgata in New Jersey. In September it began promoting its remodeled MGM Park property in Las Vegas as the first smoke-free casino on the Strip, the only one among its peers. It also has three non-casino Las Vegas hotels that are tobacco-free.

“It’s important for guests and visitors to have a variety of choices on the Strip, and Park MGM’s smoke-free environment reflects that,” the company said in a statement.

Some casino-hotels in Las Vegas, the biggest U.S. gambling destination, charge a premium for guests who want to smoke in their rooms. Caesars Entertainment Inc., for example, lists a smoking accommodation over the Memorial Day holiday weekend at its Harrah’s property on the Strip for $392 a night, or $163 more than non-smoking.

In New Mexico, two Navajo casinos that reopened in March 2021 with a temporary ban on indoor smoking are now considering making the policy permanent.

“We’re not in a rush to go to smoking again,” said Brian Parrish, interim chief executive officer of Navajo Nation Gaming Enterprise. “We would love to see the industry transition as a whole to non-smoking.”

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.