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Illinois Casinos would get time to adjust to potential ban

House OKs bill to allow smoking in casinos
Mar 29, 2011
The Illinois House on Tuesday passed a measure to exempt the state’s casinos from the 2008 indoor smoking ban.
House Bill 1965 allows smoking areas in casinos if the nearest state allows smoking in its casinos.
Of the bordering states, Missouri and Kentucky have no smoking ban. Wisconsin allows smoking in American Indian-owned casinos, Iowa allows smoking on casino floors, and the Indiana legislature is considering a smoking ban that would exempt casinos.
The proposal passed 62-52 and now goes to the Senate.
“Since the imposition of our statewide smoking ban, to date our state has lost revenues in excess of $800 million,” said bill sponsor Daniel Burke, D-Chicago. “We’re telling people … go ahead, earn the money in Illinois, then get in your car and go to Wisconsin to gamble.”
The $800 million figure comes from the casinos’ reported 42 percent drop in business since Illinois’ ban took effect, Burke said.
But Kathy Drea, vice president of the American Lung Association of Illinois and Iowa, disputed that, saying that when the bill was being discussed in committee, Burke quoted the cost of lost revenue at $300 million first, then $400 million, before it became $800 million on the floor.

‘It’s not fair’
Burke, who voted for the smoking ban, said it was troubling to revisit the issue, but the decision was based in the economics of a struggling state facing a $13 billion deficit.
East St. Louis had to lay off 14 police officers and nine firefighters because of lost casino revenue, Burke said.
“We’re putting our boats, our casinos at a competitive disadvantage,” he said. “It’s not fair — they have been good corporate citizens to our state.”
Rep. Rich Brauer, R-Petersburg, said he voted for the bill because, “If you look at other states, Illinois is the only one that bans smoking in casinos.”
His Springfield cohort, Rep. Raymond Poe, who voted for the smoking ban, also voted to exempt casinos for economic reasons.
“I think with those things (casinos), you make a choice if you go into them,” Poe said. “It took a few years to convince me, but after a few years, you could see those numbers — we have lost a lot of money in revenue.”
Eroding ban?
Opponents argued that the health risks outweighed any financial benefit.
“I’m basically against smoking — I think the smoking ban needs to stay in place, when I look at all the health issues involved,” said Rep. Wayne Rosenthal, R-Morrisonville, who thought the economic woes of border cities could be dealt with in other ways, such as lowering the tax on consumer goods Illinoisans cross into other states to buy.
Others voted against the bill because they thought it didn’t go far enough. Rep. Mike Bost, R-Murphysboro, gave the example of veterans of wars from World War I to Vietnam who were turned on to smoking by cigarettes included in their rations.
“The problem I see with our ban that we’ve had … is these ladies and gentlemen at the end of their life when all they want to do is go to their clubs and organizations, sit down and have a beer and a cigarette, play cards with their friends,” Bost said.
“They’ve fought for the freedoms to be able to do that, but we’ve taken away those rights.”
Bost is in favor of expanding the exemption to Veterans of Foreign Wars and American Legion halls.
That kind of weakening of the smoking ban is what the American Lung Association is worried about.
“This is the beginning of the erosion of the smoking ban in the state of Illinois,” Drea said.
The measure now moves to the Senate.
Senate President John Cullerton, D-Chicago, said he is against allowing smoking in casinos but would let the bill go to committee.
How they voted
*Michael Madigan, D-Chicago: Yes
*Tom Cross, R-Oswego: No
*Raymond Poe, R-Springfield: Yes
*Rich Brauer, R-Petersburg: Yes
*Wayne Rosenthal, R-Morrisonville: No
*Jim Watson, R-Jacksonville: Yes

Illinois Casino Tax Revenues Down $200 Million, Thanks to Statewide Smoking Ban
Springfield, Illinois Aug. 18, 2009 – What could you do with $200 million in tax revenues? If you were the state of Illinois, you might create 5,000 jobs, each paying $40,000 per year. That won’t happen, says the International Premium Cigar & Pipe Retailers Association,? because of tax losses stemming from lower casino revenues directly related to the statewide smoking ban enacted last year.
The Federal Reserve Bank of St. Louis announced recently that a study by two of its economists proved that the statewide smoking ban enacted in January, 2008 by the state of Illinois was the primary reason that its nine casinos lost $400 million in revenues last year. The 38-page study was reported in the July issue of The Regional Economist and showed that the smoking ban was chiefly responsible for a 22 percent decline in revenues compared to recent years and to the performance of casinos in nearby states.
“And that’s just the tip of the iceberg,” said Chris McCalla, legislative director for the IPCPR. “Businesses everywhere are suffering from the economic downturn while those in Illinois have the added impact of this contemptuous legislated smoking ban. For example, in addition to lower state income, local communities also lost over $12 million in casino tax revenues.”
McCalla criticized anti-smoking organizations for dismissing out of hand the economic impact of legislated smoking bans.
“We have the economists at the Federal Reserve Bank to thank for proving once and for all that legislated smoking bans are bad for the economy. In times like these – let alone ever – do we really need legislated smoking bans? Absolutely not! Legislators should be doing everything they can to create jobs, not destroy them,” he claimed.
IPCPR members are mainly small business owners of mom-and-pop cigar stores and manufacturers and distributors of premium, hand-made cigars, pipes and related accoutrements. There are more than 2,000 members worldwide with 64 of them in the state of Illinois.
“Casinos aren’t the only businesses to suffer with legislated smoking bans. And when business goes down, employees are eliminated or the businesses close. That means loss of jobs and loss of tax revenues. Nobody wins.
“We’re not against individual business owners declaring no smoking on their premises. It’s their right to do so.?? It’s local, state and federal governments that should not interfere with the rights of individuals,” McCalla said.
Tony Tortorici

Smoking Ban at Casinos Cost Illinois $200 Million Last Year

August 15, 2009

by A.J.Maldonado

Instituting no-smoking policies in Illinois for casinos and gaming venues has resulted in at least the economic damage predicted by ban opponents, if not more, according to economists from the Federal Reserve.

Advocates of imposing non-smoking laws on casinos in Illinois claimed that gambling venues around the country had not suffered lost revenues when instituting bans, an assertion that has been cast in doubt by lack of statistical proof. Now, economists at the Federal Reserve Bank of St. Louis have released analysis that says Illinois lost over $200 million instate and local revenue by placing the smoking ban on state-licensed casinos.

Not only were patron numbers down at the nine Illinois casinos since the ban was effected, but casinos located near other states without intrusive smoking policies suffered the most, says a study published in the Regional Economist. Illinois casinos dropped in earnings by an average of 9 percent, with border gaming venues taking the biggest hits, while casinos in smoking-optional states like Missouri, Indiana, and Iowa saw revenues rising.

And the problem was not isolated to keeping customers instate, says the report.

“Those that did go gambled less when they were there,” Thomas Garrett, a co-author of the paper, told the State Journal-Register. Statistics show that the Par-A-Dice Casino in East Peoria, which sits over a hundred miles from any competitor, saw a 6 percent rise in attendance but a 9 percent decline in income.

Some smoking foes still proclaim the economy is the only cause of the disappearing revenue, but that fails to explain why the phenomenon is isolated to Illinois.

Tom Swoik, head of the Illinois Casino Gaming Association, said the new figures are in line with what his group foresaw. Swoik says that the smoking ban will combine with economic woes to cost the state over a half-billion dollars in the next two years.

“I suspect it’s going to be a long, long time, if ever, that we’ll totally recoup the losses because of the smoking ban,” added Swoik.

Revenues grow at out-of-state casinos without smoking bans
June 11, 2009
JOLIET — The casino business isn’t as bad as it looks from Joliet.
The city has cut its budget, due in part to double-digit declines in casino tax revenues even before a March 20 fire temporarily shut down the Empress.
Statewide casino revenue dropped by nearly 21 percent from 2007 to 2008, according to a survey of Illinois and other states with casinos by the American Gaming Association.
But it turns out that seven of the 12 states with commercial casinos actually showed gains in gaming revenue in 2008, including three states that border Illinois — Indiana, Iowa and Missouri.
That’s no surprise to those who predicted a smoking ban and other Illinois regulations would hurt casino revenues.
“When you see the numbers in Indiana came in flat for the year in a bad economic climate and we see Illinois came in down 20 percent, that tells me that Illinois doesn’t know how to use gaming as a tool for economic development and tax generation,” said Joliet City Manager Thomas Thanas.
Ban sends smokers away?
Thanas, who was a corporate attorney for Harrah’s Entertainment before becoming city manager about a year ago, said it was not unusual to go to the company’s Horseshoe Casino in Hammond, Ind., and see Illinois license plates on 60 percent to 70 percent of the cars in the parking garage.
“That was even before the smoking ban,” he said.
Some of the revenue gains in neighboring states — none of which have smoking bans — may have come from smoking gamblers going to casinos that weren’t in Illinois.
The only state that came close to the decline in revenues seen at Illinois casinos was Colorado, which also imposed a smoking ban and saw a 12 percent drop in casino spending.
The numbers come from states with commercial casinos, those not owned by tribes or located in a racetrack.
Special taxes
But the smoking ban isn’t the only impact on Illinois casinos, say Thanas and others.
Thanas pointed to a 50 percent top tax rate on Illinois gaming, a limit on the number of games allowed in the state’s casinos, and what he called the “horse tax” that forces the four Chicago-area casinos to share revenue with horse racing tracks.
Harrah’s and the Empress are among the casinos forced to give 3 percent of their gross revenues to the racetracks.
That money comes off of gross revenue, but it hurts profits, said Tom Swoik, executive director for the Illinois Casino Gaming Association. Fewer profits means less investment in the casinos and eventually leads to lower revenues, Swoik argued.
“Anytime there’s less on the bottom line, there’s less marketing, less promoting, and less amenities, and those kinds of things affect the customers of the casinos,” he said.
Swoik said Illinois has even become sort of a testing ground for ideas that hurt the casino business.
“I know my counterparts from other states look at data from Illinois,” he said, “and they use that in their arguments for why not to do some of those things.”

Smoking ban hurts state’s casinos, cities
December 28, 2008
By CYNTHIA M. ELLIS The Telegraph
EDITOR’S NOTE: This is the second of two parts about compliance with the Illinois Smoke Free Act and its consequences.
The state’s smoking ban is doing more than extinguishing noxious vapors from public places. It’s also snuffing out much-needed revenue in some communities.
As the economy continues to struggle, so do the nation’s gambling businesses. Casinos across the country continue to be dealt bad hands, but in Illinois, local governments that have come to rely on gambling taxes are facing even tougher times since the Illinois Smoke-Free Act went into effect in January.
Big gambling states such as Nevada, New Jersey and Mississippi are down in casino revenue by 5 percent to 7 percent. In Illinois, the drop is much steeper – 20.3 percent.
Gambling officials estimate that the state will get between $150 million and $160 million less in tax revenues, most earmarked for education. Statewide, the eight communities with casinos, including Alton, will receive $20 million to $25 million less than previous years.
In Alton, Argosy Casino’s revenues plummeted, dropping from $125.7 million ending in 2007 to $84.4 million through the end of November 2008. So far, that’s more than a $3 million decline in tax revenues for the city of Alton.
The Illinois Gaming Board shows that in November 2008, Argosy’s admission was at 91,811, which is a more than 15 percent drop compared to the same time last year.
The annual gross receipts dropped more than 31 percent from November 2007 at $9.8 million to $6.7 million in November 2008.
“It has been a dramatic loss to the city,” Alton Mayor Don Sandidge said.
Sandidge said the city has made concessions to cover its lost revenue, such as cutting the budget and charging residents for garbage services, but that may not be enough.
“We’ve tried to keep the level of services close to what people expect,” he said.
Other cities with casinos include Aurora, East Peoria, East St. Louis, Elgin, Joliet, Metropolis and Rock Island.
Tom Swoik, executive director of the Illinois Casino Gaming Association, said he predicted a 19 percent drop when the ban was introduced. He said based on what occurred in other states, he’s not happy to be so close to the mark.
“There’s a high correlation between smokers and gambling,” Swoik said. “Although the number of people coming to casinos is the same, the time they spend inside is down. They’re outside smoking.”
He said time is money in the gambling business. If you’re not putting it in a machine or on the table, then it’s money lost.
In an effort to combat the lack of revenue, Alton officials made the decision not to replace vacancies left by retiring or outgoing employees. The city also laid off three firefighters – two since have been called back – and dropped positions to reduce the department’s costs.
Sandidge said he knows the smoking ban is not the only factor in the casino’s losses.
“I think it’s a combination of the ban and the struggling economy,” he said. “People are not out gambling as much.”
Sandidge said the gaming association is continuing to lobby for the ban to exempt casinos from the provisions of the Smoke Free Act.
Swoik said the slumping economy is obviously having some effect, but there is no question many Illinois cigarette smokers are heading to casinos in Iowa, Missouri and Indiana that allow smoking.
Smokers who gamble are more likely to cross state lines if they are allowed to light up and play the slots at the same time. Residents near Illinois’ central northwest border are likely travel to Iowa and Missouri.
Although Iowa has a smoke-free law, casinos remain exempt. Missouri recently dropped its loss limit, which has enticed many gamblers to drive west.
Residents also are traveling to Indiana casinos to smoke.
A poll conducted earlier this year by Smoke-Free Illinois of 606 registered voters showed that nearly three out of four people supported the smoking ban, and it is more popular now than when it first passed. The poll also showed by a 2-1 margin that voters feel casinos should continue to be exempt.
“Although the opponents of healthy workplaces have tried again and again to exempt casinos for the act, we will continue to protect all Illinois workers from deadly secondhand smoke,” said Harold Wimmer, president and chief executive officer of the American Lung Association of Illinois and Greater Chicago.
Dr. Clement Rose, president of the American Cancer Society, Illinois Division, said that clearly the smoke-free law is working as intended.
“By reducing exposure to secondhand smoke, we reduce cancer diagnoses and deaths,” Rose said.
The Associated Press contributed some information for this article.

Why we can’t exempt casinos from the smoking ban
December 4, 2008
By Eric Zorn
The story on today’s front page: “Illinois’ gambling problem –State’s casinos see revenue fall, but they blame the smoking ban, not the economy.” By Jeff Long, Liam Ford and Erika Slife
Fast fact: “Casino revenue is down 20.3 percent this year [in Illinois, but] across the border in Indiana, revenues are down by only three-quarters of a percent.”??
The difference:? Illinois has a comprehensive indoor smoking ban in public facilities that went into effect in January.
Why the non-smoker or non-gambler should care: “Gambling officials estimate that the state will get between $150 million and $160 million less in taxes, most of it earmarked for education. Statewide, the eight communities with casinos will see $20 million to $25 million less than they took in last year.”
The proposal: Lift the ban for casinos.
The traditional argument for lifting (or not imposing) such bans:? Customers should be able to choose between smoking-allowed and smoke-free establishments. The free market will determine the balance.
The traditional response:? Workers should have to choose between their job and their health. Common-sense safe workplace requirements demand that second-hand smoke and other airborne toxins be eliminated when possible.
The dilemma:? Allowing casino gamblers to smoke in Illinois’ eight casinos would be a small practical reversal for the clean indoor-air movement, but an enormous setback for the principle upon which their movement rests:? Public health trumps profit concerns.
The logical inevitability if casinos get a smoking exemption:? If the legislature concedes that it’s OK for casino workers to be forced to choose between their jobs and their health, there’s no principled reason why they shouldn’t say the same about bar and nightclub employees, bowling alley workers and so on.
The solution:? A federal indoor smoking ban that levels the playing field between states.

My response:
Michael J. McFadden,? author of “Dissecting Antismokers’ Brains,” Philadelphia — Eric Zorn accurately reported the effects of the ban on casino revenues – a drop of about 20%. But he did not follow up by pointing out that the hundreds of millions of dollars lost in tax revenue because of the ban will eventually have to be paid by all taxpayers: smokers and nonsmokers alike.

He accurately presented the Free-Choice argument about casino smoking policies.? But he then accepted the anti-smoking lobby’s “false dilemma” that workers are forced to choose between income and health.?

In actual fact there’s never yet been a study showing long term harm to workers’ health from the low levels of smoke commonly existing in any decently ventilated modern casino facility.? The long-term ETS studies hyped by the EPA, the Surgeon General, and ASH extremists are all based on far smokier conditions with far less ventilation, and even those studies have been heavily criticized by responsible authorities as mixed, equivocal, and weak.

He accurately pointed out that the health/income argument could be extended to other places if it is allowed to sway the casino decision.?? But he did not explain why this should be a problem: if the risks of low levels of exposure to wisps of tobacco smoke in well-ventilated areas have been grossly exaggerated, a view held by many who have looked into the subject, then there is indeed no reason to deny Free-Choice to American consumers and workers.

His final point however failed miserably and totally in its attempt at accuracy.? He offers a? “solution” of “A federal indoor smoking ban that levels the playing field between states.” while completely failing to note that this concept, advanced for years by anti-smoking lobbyists, has never been shown to be a real solution.

Yes, it softens the pain of banned areas bordering Free-Choice areas, but even when smoking bans are widespread the loss of business by smokers and their friends has never been adequately made up by the imaginary hordes of thirsty, hungry, gambling non-smokers that were promised by ban proponents.

For evidence of that, all we have to do is look at states like Minnesota, California, and Massachusetts.

Minnesota’s smoking bans came into play during the last five years.? Even with no place else to go other than a few tribal casinos Minnesota’s smokers abandoned their traditional playgrounds for pull tabs and bingos, and Minnesota’s charitable gambling tax revenue dropped by almost 30 million dollars per month as of December 2007.? The publicly available Statistical Abstract of the United States shows that in ban-happy California, the 1990s saw their bar/restaurant revenue increase by less than 10% while the USA as a whole saw an increase of roughly 40%.

In Massachusetts, the east coast state most prominent in following California’s bans in localities, the bar-restaurant trade actually went DOWN by several percent in the 90s!

The “level playing field” is simply another lie put out by the antismoking lobby to advance its goals.? The claims that it will alleviate the suffering they’ve imposed through local bans are false. The exaggerated claims of dire threats to workers’ health are also false: whatever levels of risk may be experienced by most workers are probably far less than the risks they ordinarily take every day in simply getting to and from their jobs.

So overall, Eric Zorn’s analysis, while better than many that I’ve seen, still fell prey to accepting the anti-smoking sound bites that have driven so many communities, cities, states, and even countries into falling for the economic and social disaster of government imposed smoking bans rather than accepting reasonably safe air quality standards for workers.

Michael J. McFadden
Author of Dissecting Antismokers’ Brains
Mid-Atlantic Director, Citizens Freedom Alliance, Inc.
Director, Pennsylvania Smokers’ Action Network (PASAN)

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