Analyzing the Fallout of Atlantic City's Casino Smoking Ban

Author: Matthew Haynes

For many people, a trip to the casino has numerous perks, not least of which, in most cases, includes table service, access to multiple games, and, for quite a lot around the world, the ability to smoke in designated areas.

More often than not, there would be specific and designated gaming areas for those who wanted to gamble and enjoy a cigarette or cigar and a drink at the same time, which, for many, really added to the overall experience.

However, following the revelation that a smoking ban has been implemented in Atlantic City, one of the most popular gambling resorts in the industry, this has triggered a substantial amount of fallout.

This came about after months of lobbying by workers from brick-and-mortar casinos who complained about the potentially severe health effects that it could have if smoking in casinos were allowed to continue, and, as a result, the news of the ban was greeted with considerable enthusiasm.

A dealer at one of the resort's casinos, Nicole Vitola, was passionate about her opinion on the matter, stating:

In New Jersey currently, only 25% of the casino floor permits smoking, albeit this being represented as designated areas, such as separate gaming rooms or, in some cases, VIP casino areas.

Likely Effects of the Smoking Ban in Atlantic City

In most cases like this, there could quite a few effects following this ban, and the irony is that, while many workers lobbied for the ban, it may result in a significant forfeiture of jobs.

It was estimated in 2022, in a jobs report that anticipated this ban, that it could result in 2,500 job losses if this came to fruition.

What hasn't been highlighted, though, are the reasons for this. It may well be the case that the implementation of the smoking ban could result in a drop in customers and, as such revenue which would likely justify job cuts.

A report that was published by Spectrum Gaming Group in 2019 ascertained that each casino job accounted for $155,008 worth of gambling revenue, while other findings revealed that it determined 21 percent of Atlantic City gamblers were smokers, though they were more valuable to casinos because they would spend more and gamble for longer.

It is also understood that visits to casinos in Atlantic City are already at 20-year lows, particularly caused by the recent global pandemic in addition to a considerable spike in the US online gambling market.

Another effect was predicted as being that the Atlantic City smoking ban and potential decline in footfall could deprive the state of valuable tax revenue, essentially leading to possibly devastating social and infrastructure effects for New Jersey.

What may not have been considered by officials is that the smoking ban could trigger an opposite response. While casinos may lose customers, there is no reason why these couldn't be quickly replaced by other non-smoking customers who may have originally been turned off by the fact that casinos in the state allowed smoking.

This might particularly be the case for the passive casino visitor who may like to go once a month for a social game of poker, instead of playing online - now the smoking ban has been approved, it could lead to a rise in this type of gambler.

Interestingly, last year, the stance was very much the opposite by senior state officials, when a state-wide casino smoking ban was still being debated.

Interestingly, the casino smoking ban bill was approved in emphatic circumstance by the New Jersey State Senate Health Committee in a ruling of 5-1 in favor.

Could We See Other Casino Resorts Follow Suit?

What will be interesting is the extent to which other resorts from around the world observe how things unfold in New Jersey and how much pressure might be put on them by their staff to also implement a smoking ban. Another interesting point of view is how the ban would affect the rivalry between Atlantic City and Las Vegas.

Certainly other resorts might be more equipped to handle the possible fallout that might arise from the implementation of a smoking ban, especially from a possible revenue decline perspective.

If all of the big resorts came together and got behind the ban and effectively gave customers no choice, it may not affect revenues too badly, if at all. Places such as Las Vegas are a magnet for not only interested gamblers but also tourists and partygoers. A casino smoking ban implemented here may not have too much of an adverse effect.

Interestingly, New Jersey did briefly pass a smoking ban in 2008, however, this was soon reversed after casino winnings declined by 19.5 percent in the first week, according to state regulators.

What, perhaps hasn't been taken into account is some of the more exotic casinos around the world have outdoor spaces in the form of terraces and spacious balconies, where it is naturally permitted to smoke due to them being outside.

A compromise could see a ban on smoking inside casinos, though still allowing this in outdoor spaces, while an even better one may allow smoking just for the private, high-roller VIP rooms, which account for a significantly lower amount of floor space.

In addition, many gambling jurisdictions are seen to be a lot more liberal when it comes to laws and associated regulation; Monte Carlo, Monaco especially, which has built a reputation for being a magnet for billionaires over the years.

Contrasting Health and Profit on the Casino Floor

From a state legislature perspective, it was certainly interesting to see New Jersey vote in favor of a smoking ban, effectively accepting that this could lead to a drop in casino profits and, subsequently, the amount that is contributed by way of taxation towards the state.

Essentially, there are potentially two forms of addiction that casinos are birthing for visitors, both of which are considerably linked. Being able to smoke in casinos means that gamblers will bet even more, while the ability to gamble could see them smoking more because of the potential stress levels that are involved, caused by a losing hand, for example.

Certainly, casinos both know and recognise this. Casinos (certainly a considerable percentage of them), also have cigarette machines in their establishments to satisfy a visitor's requirements.

Any means to keep a gambler (potentially high value) at a table have been trialled by casinos over the years, including dedicated table service, free chips after they have lost so much money that ensures that they continue to be engaged and also the ability to smoke.

It has seen many issues revolving around responsible gaming and gambling addiction over the years, which has become a major point of contention with governments worldwide. However, another possible underlying issue that effectively has been ignored is that of smoking addiction and the health risks that are associated.

What appears to be the case is that officials in the state of New Jersey, at least, have finally decided that public health outweighs that of profits, and the idea might have been to purposely reduce the number of people who visit casinos by implementing the smoking ban from the start. Gambling addiction will no doubt have a particular effect on the state coffers, especially via the funding of related charities.

Optimism for New Jersey Revenue Post-Smoking Ban

There is reason for New Jersey casinos to have hope. For well over a decade, the UK implemented a nationwide smoking ban in all establishments (bars, nightclubs, bingo halls and casinos); effectively promoting a zero tolerance policy.

The UK is one of the biggest gambling markets in the world and, as a result, did not witness too much of a decline in revenues. Essentially for a casino smoking ban to work in the long term, it requires consistency and every party being on the same page.

While there is likely to be a short-term fall in casino revenue, there is no reason why this should last, especially when customers realize that this is not a temporary measure and the bill will not be reversed. Maybe even the next generation could be a difference maker when it comes to clawing back possible lost revenue, especially those who don't smoke.

As is the nature of the industry and the speed at which it moves, do not be surprised to see casinos in the state come up with a solution to counter the drop in short-term revenue.