Saturday, January 28, 2006

Breaking casinos' bank

The restaurant industry has never wielded more lobbying clout than it flexes at present. Yet in the intensifying struggle over smoking bans, the trade looks like Woody Allen trying to body-slam Mike Tyson. The fight against smoking laws is no longer a head-on attempt to beat back the prohibitions; that doesn’t work anymore. The strategy today is to keep all leisure-dependent businesses subject to the same clean-air mandates, so none has an advantage in competing for smokers’ dollars. And in that contest, the industry is having its lunch eaten by the gaming business.

A number of areas that snuffed out smoking were unable to extend the bans to Native American-run casinos because the gaming parlors were technically on the ground of a separate sovereign nation, and hence exempt from state law. Okay. Not good, but at least there was a rationale to the exemptions.

Not so in New Jersey, where some Atlantic City casinos will be exempt from a statewide smoking ban when it takes effect April 15—fittingly, Tax Day. The stated reason is that gamblers smoke; indeed, lawmakers apparently decided, many of those game-of-chance fanatics would rather smoke than gamble, so if they can’t do the former, you can forget about the latter. The casinos’ revenues, now topping $5 billion a year, could be eroded.

And what about restaurant patrons who might scramble some eggs at home rather than have a breakfast and a cigarette at the local diner? Or the yuppie who spends so much time outside smoking that he orders a drink or two less at the bar? Or the party that hurries through dinner, foregoing dessert or a second bottle of wine, because some members want to light up on the drive home? Aren’t there financial implications to thwarting those smokers, too?

The real reason is the financial might of gaming. It delivers more state revenues—some $400 million annually—than Jersey could generate this side of a Soprano crew operation. And what’s left after the gaming taxes are channeled to the treasury—what the casino operators get to keep—funds an obviously effective lobbying effort for the bet-meisters. The pool of funds is large enough to have a horse dive into it on the Atlantic City pier.

And now the same thing is happening in Colorado. State representative Jim Sullivan, a Republican, has said he can’t support a proposal to ban smoking in all workplaces unless an exemption is granted to the state’s 19 casinos. His reasoning: “Gamblers are smokers," he was quoted in Denver’s Rocky Mountain News as saying.

Last time we checked, so are some restaurant patrons. If workplace smoking bans are going to fair, and effective, the field of coverage has to be leveled. Because this is one of the instances where the restaurant industry can easily be misspent, it has to tout its own numbers—the headcount of employees (translation: voters) who will be affected. The trade lost in Jersey, but it needs to regroup and keep the situation there an exception, not the rule.


  1. Here in Connecticut, it's remarkable the damage the Casinos have done to the restaurant biz. They're the top destination for smokers (whether they just eat or eat and gamble).

    In a non-scientific poll of the other restaurateurs I know, a lot of our "best" customers are hitting the casinos for an evening's entertainment; leaving us in the lurch. Our definition of "best" customer reflects disposable income, soup-to-nuts eating style, good tips, and frequency of visits.

    What's saving my hide is that I offer live jazz three nights a week. Yet many of my jazz-loving customers have mentioned that they've chosen to pay big bucks for tix at a casino.

    How can the little guys compete with the casinos when our customers can't smoke, and even the glitziest decor can't compete with the perceived excitement of a visit to the casino?

  2. Part of the problem has to be the subsidization of other casino activities from the gaming take. As a music fan, I can attest that entertainment many casinos offer is top-notch, and it's often more affordable than similar-level talent at conventional venues. If the gaming doesn't get you, the music might, or the value-priced meals could. It's just a shame that the ability to smoke is now being tossed atop the heap of reasons for a consumer to spend his or her disposable income at a casino.