I’ve had friends and family who worked at metro Peoria’s Par-A-Dice casino, so I appreciate that it provides jobs and revenue to government, but the legislature’s debate about changing the smoking ban to exclusively benefit gaming interests either oversimplifies or deliberately obscures the issue.
A bill to allow smoking in casinos passed the House in April, 62-52, and, as of press time, was stalled in the Senate.
The whole idea could ignore “casino casualties” two ways: public health, of course, but also pathological gamblers.
It isn’t much different than letting motorists who are probably going to hurt themselves and others have drivers licenses anyway – as long as they pay the state hefty fees and fines.
Senate sponsor Martin Sandoval (D-Cicero) in mid-May held off calling the bill for a vote in the Senate, where Senate President John Cullerton (D-Chicago) is expected to try to stub out the bill (HB1965). It would let casinos have smoking rooms – if neighboring states’ casinos allow smoking. Supporters point out that Illinois casinos have been losing money to gambling joints in Iowa, Indiana and Missouri because of Illinois’ ban, which took effect in 2008.
Meanwhile, a UCLA study published in the Journal of Gambling Studies, surveyed casino gamblers to assess habits and lifestyles, and it indicates 69.7% of casino gamblers are at-risk gamblers, problem gamblers, or pathological gamblers. It also shows that self-identified smokers are more likely to be problem or pathological gamblers than non-smokers. (Interestingly, there was no corresponding association with alcohol use.)
The real background of the measure is the loss of such troubled gamblers – and their money – to other states, the recreational migration of people who smoke and gamble to excess – folks who gaming corporations and Illinois state government are not too proud to exploit in tough economic times.
Casinos did show a decline in business since the ban went into effect, according to the Illinois Gaming Board (IGB). But operators, lobbyists and some legislators seem to blame casinos’ drop in receipts exclusively on the smoking ban, a simplistic conclusion.
The IGB reports that the state’s nine casinos’ gross receipts fell 20.9% from 2007 to 2008, when the smoking ban – and the Great Recession – started. Another economic indicator is that casino admissions last year were down 16% from 2007, although gross receipts during the same time fell 30%. So people were showing up but spending less – like everyone else.
The Par-A-Dice showed a financial improvement in 2010 (+0.2%), but it’s still down about 13% from 2007, the IGB says. Par-A-Dice’s owner, Boyd Gaming (the fifth largest U.S. gaming company), had a big loss in 2008 ($223 million), but showed healthy net incomes in 2009 ($19.5 million) and 2010 ($15.6 million). Also, since Boyd has 17 properties in six states and some joint projects, it’s difficult to connect one state’s smoking law with corporate financials.
“We continue to think that 2011 consensus EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization] is too high due to less-than-inspiring results from the Las Vegas locals market,” J.P. Morgan analyst Joseph Greff wrote, quoted in The Street.com. “Overall, we view Boyd’s Las Vegas locals markets as the critical driver of its equity value, and this is a market that will endure tough sledding.”
The key for Boyd will be its ability to continue to reduce costs and allow for significant flow through on marginal revenue, Wells Fargo analyst Carlo Santarelli said, The Street.com reported.
In Illinois, restaurants and bars saw improvements, according to the state Department of Revenue – restaurants had a 1% gain in 2008, a 2% decline along with the financial meltdown in 2009, and a 2% jump last year. Bars’ business slipped in 2008 and 2009 (-1% and -0.7%), but gained 10% in 2010. Overall, restaurants are up 1% since the ban was enacted and the economy tanked, and bars are up 8% over the same period.
But legislators such as State Rep. Dan Burke (D-Chicago) say that the smoking ban hurts casinos and costs the state money because gamblers are going elsewhere to play. Since most pathological gamblers smoke, letting them smoke could lure them back, it’s assumed.
The state’s share of taxes from casinos fell 46% between 2007 and 2010, from $718.2 million to $383.5 million, and local governments’ share was down 28.6%, from $115.7 million to $82.6 million. But what state or host market would reject millions – any millions? Springfield seems to have relied too heavily on gambling and not enough on other revenue streams (such as taxes), spending cuts or both.
“We have limited opportunities to raise new revenues,” Burke said. “Why not take advantage of what we have at our disposal?”
Letting casino customers smoke in Illinois would mean “the money would start flowing,” he said.
Conducted by UCLA’s Gambling Studies Program, the study said, “Of those surveyed on site, 30.3% were classified as non-problem gamblers, 29.2% were at-risk gamblers, 10.7% were problem gamblers, and 29.8% were pathological gamblers.
“Our data support the notion of higher frequency of gambling problems among casino patrons.”
Sandoval said he thinks he can get enough bipartisan support to go to the full Senate, but there’s significant opposition, from Cullerton to Gov. Pat Quinn.
Casinos’ nonstop complaining about following state laws everyone else does is tiresome. Illinois changed laws to accommodate gambling interests, and the legislature has repeatedly made it easier for the gaming industry to take money from our neighbors – some of whom have gambling problems.
Illinois’ Clean Indoor Air Act protects Illinois workers and customers, including at casinos.
This should be a public health issue, not a money issue, and the legislature shouldn’t entice pathological gamblers who smoke simply to bring in more money.
Would the General Assembly authorize people prone to violence the convenience of carrying firearms if there were lucrative license fees involved?
Sometimes you wonder.
Contact Bill at: bill.knight@hotmail.com