As AC Casinos Face Smoking Ban, Report Shows It Won't Impact Revenue

A new report conducted by C3 Gaming: Casino Gaming Consultants provided some insight about how smoking bans would affect Atlantic City casino revenue.

Despite prior studies that said gaming revenue would fall a significant amount, the latest from C3 Gaming says otherwise. It seems that the pandemic has adjusted how a lot of gamblers feel in regards to not having the ability to smoke as they play casino games.

C3 Gaming’s research stated that retail casinos with a smoking ban performed on par with those that offered smoking. In fact, some tribal casinos disclosed that earnings are actually growing because of fewer maintenance costs.

Let’s dive further into what C3 Gaming found and how it may adjust lawmakers’ decisions with smoking bans and AC casinos.

COVID-19 affects Atlantic City casino smoking ban

Ever since the pandemic initially started, smoking has been restricted at casino establishments across the country. This was simply implemented to help protect all of the guests from potentially transmitting the virus.

However, it turns out that it possibly had a greater impact. C3 Gaming’s latest findings from its June 2022 study give casinos optimism going forward, even if there is a smoking ban.

Both bills S264 and A2151 are likely to be addressed in legislation this summer, ending the exception created by the New Jersey’s Smoke-Free Air Act of 2006.

Of course, AC casinos find themselves opposed to this, fearful of what will happen to their revenue streams. Atlantic City actually put this in the works back in 2008. But when gaming profits dropped by around 20% in the first week, it got reversed.

The Spectrum Gaming Group’s analysis for the Casino Association of New Jersey from Nov. 2021 presented reasons why the ban is negative. It showed that gaming revenue could decrease as much as nearly 11%, while also costing some their jobs. Up to 2,500 jobs may be lost just in the first year.

The positive news is that C3 Gaming disagrees completely. It pointed out that part of Spectrum’s breakdown that’s faulty is the fact that their information is outdated. The study utilized statistics from previous smoking bans from 2002, 2008, and 2015.

By examining revenue at casinos in Pennsylvania, Michigan, and several others in New England, C3 discovered that smoking bans are not influencing people since the pandemic. It compared figures at casinos that allow smoking against those who kept their bans active after state requirements were lifted.

Overwhelmingly, each case proves that a smoking ban won’t destroy the bottom line of Atlantic City casinos.

Breaking down C3 Gaming’s non-smoking trends

New Jersey’s neighbor in Pennsylvania served as a great example, as it featured two casinos in two different markets that kept their facilities smoke-free.

These bans got removed in June 2021. However, Mount Airy Casino Resort and Parx Casino kept their regulations.

C3 compared figures from four different time periods to see if smoking is in fact making people gamble elsewhere. This included two full years of data prior to the start of the pandemic.

Mount Airy competes with the Mohegan Sun Pocono in the market closer to Scranton and Stroudsburg. Even though Mohegan started letting bettors smoke again once permitted, it didn’t do anything to help its revenue.

The C3 Gaming report said:

“If smoking was a deciding factor in why people chose a particular casino, it was not evident in these properties’ recent performance. In fact, it appears that the non-smoking property was able to gain a modest amount of market share over its primary competitor that chose to reinstitute smoking.”

All of the other revenue comparisons provide similar results. It doesn’t seem as though gamblers are currently influenced to make decisions based around smoking rules.

Smoking in New Jersey casinos

According to another study in 2021, Mike Meczka of Meczka Market Research/Consulting, found that “the importance of smoking had diminished drastically in light of the pandemic.”

It mentioned that a casino’s location and proximity to gamblers’ homes was the top reason bettors picked a certain location. This led all other categories at 32%.

The study also stated that the next reason listed was actually because smoking isn’t allowed at that casino. This came in at 26%, well ahead of those advocating that having the ability to smoke as a main reason at only 4%.

So, through both market research and revenue data, it appears that NJ casinos aren’t in serious danger if a ban is completed. This may not sway the opinions of operators right now, but hopefully it alleviates some concerns.

The authors of C3 Gaming’s evaluation said:

“Data from multiple jurisdictions clearly indicates that banning smoking no longer causes a dramatic drop in gaming revenue. In fact, non-smoking properties appear to be performing better than their counterparts that continue to allow smoking.”