A new strategy has emerged in the fight to ban smoking in casinos: shareholder voting.
Contributors to Boyd Gaming, Entertainment Bali And Caesar Entertainment The casino companies involved will have their proposals voted on to force them to consider the costs associated with allowing smoking indoors.
The proposals are sponsored by Trinity Health, a nonprofit health care network, and the American Non-Smokers' Rights Foundation. Trinity Health, based in Livonia, Michigan, has used its shareholder status to fight for various health initiatives despite the fact that it owns only a small portion of these companies. For example, public records show that Trinity owns just 440 shares of Bally's stock, or about 0.001% of the company.
Boyd, Bally's and Caesars fought to keep the proposals out of proxy materials distributed to shareholders. The SEC rejected the casinos' applications, and the proposals along with the rationale behind them were delivered to all shareholders.
Boyd will face a smoke-free rating vote at its annual shareholder meeting on Thursday. Bally's holds its annual meeting on May 16, and Caesars will follow it with its own, likely in June.
The three companies collectively operate 75 U.S. casinos that allow smoking indoors, where state law allows it. About 14 states allow indoor smoking in commercial casinos.
States such as Nevada and New Jersey have banned indoor smoking more broadly, but have made exceptions for casinos. Legislation to end indoor smoking in casinos is in various stages in several states across the country, including New Jersey, Pennsylvania and Rhode Island.
Advocates of the smoking ban point to research conducted by C3 Gaming that concluded that smoke-free casinos generate more revenue and outperform competitors that allow smoking.
The proposal's sponsors argue that shareholders should know how much casinos are paying in higher health insurance premiums for employees, greater maintenance costs and turning away smoke-averse customers.
Boyd says in his report that he has seen a negative impact in states that have banned indoor smoking. She argues that these decisions are best left to properties to follow local trends, and argues that if shareholders succeed in implementing the ban (which Boyd claims is the real goal in enforcing the valuation), the company will lose customers to competitors who continue to allow smoking. .
Caesars board member Jan Jones Blackhurst said Wednesday at the SBC North America Summit, an online gaming conference, that she believes the decision to ban smoking in casinos should be left to governments. She noted that experience showed that smoke-free casinos could take an economic hit.
“In general, if you look across the United States, when casinos ban smoking, revenue drops anywhere from 20% to 25%, which also creates a significant layoff factor as people start losing their jobs,” she said.
Unions have mixed responses. While some are concerned about the potential for job losses, the United Auto Workers, which represents more than 10,000 table game dealers across the country, has stepped up its anti-smoking efforts at casinos, citing employees' exposure to secondhand smoke.
“There is no safe amount of exposure to secondhand smoke, and the only way to completely protect nonsmokers from secondhand smoke is through 100% smoke-free indoor air environments,” the Centers for Disease Control and Prevention says.
The U.S. Surgeon General says many common practices found in casinos, such as separating smoking and non-smoking sections, cleaning the air and ventilating buildings, are not effective protections against secondhand smoke.
Casino operator Parx, which operates locations in Pennsylvania, has decided to remain smoke-free during the Covid pandemic at its property in Bensalem, north of Philadelphia. It competes with four other local casinos that allow smoking indoors, but said it has not seen its market share affected.
“Financially, we know we've lost some customers, but we also know we've gained some customers. We don't think we've seen a significant impact in either direction,” Parks spokesman Mark Oppenheimer told CNBC.
Instead, the company said it is focusing on guest satisfaction results and surveys that indicate high employee morale.
in las vegas, MGM Resorts The first casino resort on the Strip opened to ban indoor smoking and even smoking on the pool deck. The facility declares on its website, “Here at Park MGM, we're not afraid to be different, and as you've noticed, all we care about is what's fresh. Now, that includes the air you breathe.”
For now, Park MGM is the exception, but anti-smoking advocates hope it will soon become the norm.
