A modern strategy has emerged in the fight to ban smoking in casinos: shareholder voting.
Shareholders at Boyd Games, Bally’s entertainment AND Caesar’s entertainment will put proposals from relevant casino companies to a vote to force them to examine the costs associated with allowing smoking in indoor spaces.
The proposals are sponsored by Trinity Health, a nonprofit health care network, and the Americans for Nonsmokers’ Rights Foundation. Trinity Health, based in Livonia, Michigan, used its shareholder status for this purpose fight for various health initiatives even though it owns only a diminutive portion of these companies. For example, public records show Trinity owns just 440 shares of Bally’s, representing approximately 0.001% of the company.
Boyd, Bally’s and Caesars fought to keep the proposals from appearing in proxy materials distributed to shareholders. The Securities and Exchange Commission rejected the casinos’ applications, and the proposals and their justification were distributed to all shareholders.
Boyd will face: vote on the no smoke rating at the annual shareholders meeting on Thursday. Bally’s is holding its annual meeting on May 16, and Caesars will hold its own meeting, likely in June.
The three companies together operate 75 U.S. casinos that allow smoking indoors where state law allows. About 14 states allow smoking in commercial casinos.
States such as Nevada and Novel Jersey have banned indoor smoking more broadly, but have made exceptions for casinos. Several states across the country, including Novel Jersey, Pennsylvania and Rhode Island, have legislation in various stages to end smoking in casinos.
Smoking ban supporters cite research by C3 Gaming that shows smoke-free casinos generate more revenue and outperform competitors that allow smoking.
Sponsors of the proposal argue that shareholders should know how much casinos pay for higher employee health insurance premiums, higher costs of living and deterring customers who hate smoke.
In his attorney, Boyd argues that negative impacts have been seen in states that have banned indoor smoking. He argues that these decisions are best left to property owners to follow local trends, and argues that if shareholders succeed in implementing the ban (which, according to Boyd, is the real goal of forcing the rating), the company will lose customers to competitors who still allow smoking.
Caesars board member Jan Jones Blackhurst said Wednesday at SBC Summit North America, an online gaming conference, that she believes the decision to ban smoking in casinos should be left to governments. She emphasized that experience shows that smoke-free casinos can suffer economic losses.
“Overall, if you look at the United States, where casinos ban smoking, revenues are down 20% to 25%, which also has a huge impact on layoffs as people start to lose their jobs,” she said.
Trade unions are mixed in their reactions. While some fear potential job losses, the United Auto Workers, which represents more than 10,000 table game retailers nationwide, has stepped up efforts to combat smoking in casinos, citing passive exposure to workers.
The Centers for Disease Control and Prevention states that “no amount of exposure to secondhand smoke is unthreatening, and the only way to fully protect nonsmokers from secondhand smoke is to ensure completely smoke-free indoor air.”
The U.S. Surgeon General says many common practices in casinos, such as separating smoking and non-smoking areas, air purification and building ventilation, do not provide effective protection against secondhand smoke.
Casino operator Parx, which operates locations in Pennsylvania, has decided to maintain a smoking ban during the Covid pandemic at its property in Bensalem, north of Philadelphia. It competes with four other local casinos that allow smoking indoors, but says it has not seen a decline in its market share.
“Financially, we know we’ve lost some customers, but we also know we’ve gained some customers. We don’t think we’ve had a significant impact in either case,” Parx spokesman Marc Oppenheimer told CNBC.
Instead, the company said it was focusing on guest satisfaction scores and surveys that show an boost in employee morale.
in Las Vegas, MGM Hotels opened the first casino on the Strip to ban indoor smoking and even smoking on the pool deck. On its website, the property declares: “Here at Park MGM, we are not afraid to be different and, as you may have noticed, we focus primarily on what is fresh. This also applies to the air you breathe.”
For now, Park MGM is an exception, but smoking ban advocates hope it will soon become the rule.
