Post-COVID gaming revenue at multiple sites indicates that players are more open to smokefree casino floors, two casino finance analysts said Tuesday.
The pandemic was so disruptive that “it is less painful and less irritating (to customers) that casinos have made decisions about altering their smoking status,” said Geoff Atkinson, marketing research manager for Management Science Associates, which provides analysis for casino gaming and other industries around the world. Matt Roob, senior vice president for financial analysis at Spectrum Gaming Group, added that operators switching to nonsmoking gaming floors can accommodate smokers with easily accessible outdoor smoking areas. The two also noted that any financial impact of eliminating smoking in casinos has fallen over time, as fewer people use tobacco. Smokers accounted for 11.6 percent of the adult population in 2022, down from 23.3 percent in 2000, according to the the American Lung Association.
Atkinson and Roob spoke during a webinar, “The Impact of Smoking Regulations on Casino Gaming,” sponsored by Spectrum, Management Science Associates, and Spectrumetrix. They compared table-game and slot revenue trends among groups of neighboring smoking and nonsmoking casinos; they acknowledged that health considerations are also important, but said data to measure them was not available.
Roob also cautioned that a simple comparison of gaming revenue before and after a change in smoking policy doesn’t tell the full story. For example, Illinois slot revenue dropped by 21.7 percent in 2008 from 2007, while slot revenue in Indiana, Iowa, and Missouri – three neighboring states with casinos – rose between 3 percent and 8.1 percent.
While state law made Illinois casinos smokefree in 2008, “this doesn’t happen in a vacuum,” Roob said. That was also the year of the Lehman Brothers bankruptcy, the beginning of the Great Recession, and the addition of table games in Missouri. “If every state was subject to the same economy, and the variable was smoking, you think that might be a key factor in the change … but there’s no placebo here,” Roob said.
Atkinson, a former math professor, recalled often reminding students that correlation is not causation. “There are lots of different people out there and they’re not acting as a monolithic bloc,” he said.
In addition to the Illinois experience, the two examined more recent examples of casinos switching to nonsmoking gaming floors.
Mohegan Sun and Foxwoods casinos in Connecticut voluntarily remained smokefree after the state lifted COVID restrictions. Any advantage gained by casinos in neighboring Rhode Island were less than the seasonal variations at the two large casinos, the two found.
Orleans Parish in Louisiana, which covers the downtown New Orleans area, extended its nonsmoking rule to casinos and bars in 2015, while Jefferson and St. Barnard parishes covering the city’s suburbs did not. From 2013 to 2019, Orleans Parish casino revenue dropped by 13.2 percent, with most of that in the first three years of the period. Jefferson Parrish casino revenue rose by 7.3 percent, also primarily in the first three years. Video poker revenue in Jefferson Parish, which is roughly double that of Orleans Parish, remained steady 2013-19; Orleans video poker revenue dropped by about 30 percent. St. Barnard Parish’s video poker revenue, significantly smaller than the other two, increased by 9.3 percent.
Shreveport, La., was smokefree coming out of COVID in 2021, then went back to allowing smoking in 2023. Gaming revenue decreased by 17.3 percent from 2021 to 2022, then increased by 4.1 percent from 2022 to 2023. Roob said Shreveport could have been affected by casino expansions in Thackerville and Durant, Okla., which attracted Dallas area players who previously went to Shreveport.
Parx Casino in Philadelphia has voluntarily remained smokefree since COVID restrictions were lifted in 2021, while others in the metro area allow smoking. The analysis said the opening of Philadelphia Live! Casino that year has kept the other four Philadelphia casinos from bouncing back to pre-pandemic revenue levels, but “differences between individual casinos appear to be more important than smoking vs. smokefree.”
Atkinson said casinos shifting to smokefree, whether voluntarily or by a change in law, must emphasize that they will accommodate customers who want to step outside to indulge. “There are certainly opportunities for individual casinos to make this more palatable to their patrons and minimize any sort of disruptive effect,” he said.
