Smoking ban could suffocate Vegas gaming revenue

By Brad Allen
A potential ban on smoking in Las Vegas could lead to a steep decline in gaming revenue, according to a Deutsche Bank gaming analyst.

Andrew Zarnett told the Las Vegas Review-Journal that a ban is likely in the next two year, thanks to a precedent set by Macau and the continued study of the dangers of second-hand smoke.

He warned that a ban in Nevada could lead to a 7.5% fall in gaming revenue in the first year.

One of the main things that could be affected is players gambling rhythms.

“A break in play often means a player has time to reconsider their situation,” Zarnett said. “If lady luck has been kind to them, they may decide to call it a day. Meanwhile, if their efforts to beat the house are unsuccessful, they may decide that they have lost enough.”

Delaware’s gaming market fell 11% following a smoking ban in 2002, while Illinois casinos experienced a 21% revenue plunge after the 2007 Smoke-Free Illinois Act

Nevada officials downplayed any potential loss of revenue from a ban, saying in reality it would be a minor change.

In 2006 a Nevada referendum saw smoking banned in all public places except casino floors.

Many events in casinos such as this year's World Series of Poker are already entirely smoke-free.

The chairwoman of Smoke-Free Gaming, Stephanie Steinberg, disputed the idea that a smoking ban had affected revenue in Illinois.

"Bad weather, gas prices, market saturation, competition, casino debt, and the 2008 recession are the other cards missing from this deck. Smoking bans are not the cause of revenue declines, rather, it’s poor business planning.

“Casino smoking bans are everywhere and inevitable,” she said. “Nevada is next and the gaming industry knows it.”

The Macau ban will take effect on 6 October and stipulates that smoking zones must account for less than half of the overall gaming area in each venue.

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