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Another way of looking at the casino smoking ban
Thursday, Nov 18, 2010 - Posted by Rich Miller * There’s been a lot of talk about how the state’s smoking ban has hurt Illinois’ casinos. Surrounding states haven’t experienced the sharp downturn in casino revenues that Illinois has, and that’s blamed on the ban. It’s pretty well-known that gamblers like to smoke. But opponents of lifting the smoking ban at Illinois casinos have a fascinating new graph that compares the Jumer’s Casino Rock Island to the casino in Davenport Iowa. Click the pic for a better view…  There doesn’t appear to be a direct correlation between the smoking ban and any major downturn. But how do you explain that major upward trend starting in December of 2008 for the Illinois boat? Well, as the graph shows, that’s when they moved and opened a new, improved casino. What this may show is that Illinois casino owners just aren’t putting enough money back into their operations. When they do, things get better. Revenue grows. St. Louis has a beautiful new casino with great restaurants, clubs and a swank hotel. It’s no wonder the somewhat dingy Illinois casinos are seeing revenue problems. * Meanwhile, it’s understandable that Illinois Gaming Board Chairman Aaron Jaffe doesn’t want to do more work. Who does? But Jaffe’s job is to regulate gaming. Offering up opinions on gaming bills outside of their regulatory aspects is really not his job, but he apparently thinks it is. The Daily Herald talked to Chairman Jaffe this week about the gaming bill which is currently sitting in the Senate…
He’s not the moral arbiter here. He’s the regulator. He should stick to that. And even on that topic he can’t stop himself from complaining…
If he needs more staff, then he should make the case for more staff. But adding more slots at current casinos wouldn’t be all that hard because the casinos are already vetted. And people already gamble at the tracks, there would just be additional ways to gamble if they got slot machines. Adding five new casinos would be a big task, but the state has done this before. Nevada doesn’t seem to have any problems and they have tons more casinos than we do. Jaffe does make some valid points, but video gaming has taken way too long to implement and his complaining about the expansion bill all adds up to essentially upholding the interests of the current casino owners. The boat owners didn’t care for video gaming, and they really don’t like this new expansion plan because it would eat into their profits. Whether he knows it or not, he’s become a policy tool of the owners. * Related…
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- unspun - Thursday, Nov 18, 10 @ 11:20 am:
Jaffe needs to pontificate less, and get busy implementing current law. Given his perspective on the gaming proposal, I can’t help but wonder whether he is intentionally dragging his feet on video gaming. To date, a solid reason for the slow rollout has yet to be given.
- Pot calling kettle - Thursday, Nov 18, 10 @ 11:22 am:
Jaffe is an odd bureaucrat. Most would jump at the opportunity to expand their area of responsibility. I understand there are staffing issues, but this is still an odd response.
- chitownguy - Thursday, Nov 18, 10 @ 11:23 am:
I agree that the Illinois casinos need to improve, not expand.
Personally, I love to play poker, maybe a little blackjack, but I will only play at the Horseshoe in Hammond. The other casinos are too small, dirty and old. I HATE smoking and won;t play at tables unless they are smoke free. Every Illinois riverboat needs a major face lift and a good scrubbing.
Simply having the ability to wager money isn’t enough. People want an experience. Look at Vegas. The successful casinos are the large major attractions with restaurants, shows and hotels.
There is a market for getting people who just want to gamble, but its already being served. They will go anywhere. IMHO to be successful, compete with other alternatives and reach new players casinos need to step up their game and give us an experience - not just add more slots, video poker, etc.
- Just Observing - Thursday, Nov 18, 10 @ 11:29 am:
Good points on the environment of Illinois casinos — they are crowded, dingy and not classy at all — drinks are served in plastic cups. For me its probably better they stay that way so I’m not inticed to gamble more — but if I want to gamble I would rather head off to Milwaukee’s Potawatomi (sp?) Casino which is a nice environment.
- Peter - Thursday, Nov 18, 10 @ 11:46 am:
To be fair, the Casino Queen completely rebuilt several years ago; you can’t complain about upkeep at that facility, nor promotion as they blanket the airwaves and have been big partners with the Cardinals for years. Admittedly, the Lumiere Place is hard to compete with right across the river, so no matter how much Casino Queen improved it would be up against a monster.
I’d like to see a similar graph for the Casino Queen over that time period as it not only had the opening of Lumiere (and River City a bit aways) but also the elimination of loss limits on the Missouri side at the beginning of 2009. People no longer get chased across the river to Illinois when they lose too much.
- fed up - Thursday, Nov 18, 10 @ 12:03 pm:
I think the fact that he is complaining about the possibility of more work in an economy like this tells us the type of man he is.
- Plutocrat03 - Thursday, Nov 18, 10 @ 12:09 pm:
Look at Vegas? OK, Gaming revenues in Nevada fell 10.4 percent in 2009, the largest single-year decline in state history…..Casinos statewide collected the lowest one-year total since 2003 according to figures released the Nevada Gaming Control Board.
That is for “large major attractions with restaurants, shows and hotels.” Why do you expect good results in Illinois?
Gambling is a failure as a tool of economic development.
Same old tired pols with the same of tired solutions. What a way to move forward!
- just sayin' - Thursday, Nov 18, 10 @ 12:19 pm:
My sense has always been that the downturn in gambling revenue has always had a lot more to do with the down economy than any smoking ban.
State encouragement of more gambling in a bad economy is a lot more insane than raising the income tax in a bad economy in my view.
- fed up - Thursday, Nov 18, 10 @ 12:28 pm:
plutocrate Revenue in just about every industry have declined in 2009. I’m not in love with the gambling idea but its millions in Illinois dollars heading across the border into Indiana Michigan and Iowa every year. People are going to gamble we are surrounded by states who have developed gambling better than us we need to capture a larger percent of the dollars that are being gambled. I even heard mention of slots and video gambling at midway and O’Hare which would be great. A revenue source to pay for O’Hare expansion is needed and midway receipts could really help the next mayor with the revenue problems Daley ignored for next year and beyond
- Rich Miller - Thursday, Nov 18, 10 @ 12:31 pm:
fed up took the words out of my mouth. Halting any business during an economic downturn is kinda weird. It’s a loser logic. The goal of all good business leaders is overcoming hardships. Losers quit.
- chitownguy - Thursday, Nov 18, 10 @ 12:35 pm:
Peter - Good point on the St. Louis area. I haven’t seen the revamped Casino Queen. A comparison of the STL area would be helpful.
Pluto - Yes, gaming revenue fell in Vegas in 2009, but I would suggest that was due to many factors in this economy and misses my point. What we are discussing is how does a specific type of existing Illinois business (casinos) compete more effectively with rivals across state lines who appear to be having more success.
Its my argument that IL casinos are not providing the type of product the consumer wants. In Vegas, and elsewhere, the casinos that have traditionally done well are the larger, cleaner, newer more exciting venues that offer many things to many people.
I don’t see how pointing out the fact that people would rather go to a place that offers more for their money than a dark, crowded and dirty riverboat is “politics as usual.” In fact, telling these gaming companies to quit complaining and offer a better product seems to be something we should do more often. Smoking bans aren’t the problem. Expansion for more licenses is a whole separate issue, where I think you and I would probably agree.
- wordslinger - Thursday, Nov 18, 10 @ 12:36 pm:
Besides a Chicago casino and slots at racetracks and the airports, I don’t see much of an upside to expanded gambling in Illinois. Once Des Plaines comes on line, I wouldn’t be surprised to see one or two of the Illinois casinos shut down.
The video gaming experience really hasn’t gone to plan. Those who have machines and are paying off illegally aren’t in any hurry to get legal, and those without machines don’t want them.
- lake county democrat - Thursday, Nov 18, 10 @ 12:38 pm:
What happens if/when the feds allow online gambling? A Chicago casino makes sense because of the lost revenues, but this is not a bottomless well.
The worst thing about the smoking ban is how draconian it is. You could compromise by just allowing a smoking room so gamblers don’t have to shiver in the cold to get their nicotine fix.
- Bill Hannegan - Thursday, Nov 18, 10 @ 12:43 pm:
I live in St. Louis and the folks across the river who run the Casino Queen, as well as East St. Louis officials, are convinced that the smoking ban has cut their revenues. They are also convinced the Queen’s multi-million dollar air filtration system effectively clears the smoke from casino air. Why has such air filtration not received more attention during this controversy?
- Sick of it! - Thursday, Nov 18, 10 @ 1:41 pm:
A big problem for casinos in Illinois is how they are taxed and the rates they are taxed at. Under Blago the rates were increased quite a bit and those taxes come from gross revenue, not profit. This has caused the casinos to cut back on remodeling projects as well as promotions offered to players. While I might go to a Missouri casino 5 times a year I get free rooms, food and $40/week coupons for free play while the Illinois boat I visit more frequently offers a few bucks off a room, a free hot dog and a single $5 coupon a month. If Illinois cut the rates that the casinos are taxed it might be a help in keeping more of the money here instead of sending it across the borders.
- walter sobchak - Thursday, Nov 18, 10 @ 1:58 pm:
Just a bit of fiscal advice: auction the casino licenses for hundreds of millions up front…billions? Let the marketplace not political insiders dictate beyond general geographic guidance. New slot machines/gaming positions: charge a fee per machine up front beyond the potential tax revenue. A few years ago a casino expert thought $75K per machine a fair price. The casino/race tracks etc. will recoup their investment easily as the total number of casinos/slot machines are still an artificial number, not dictated by consumer demand but political will. State officials ‘explaining’ the rejection of lottery bidder? Risible. Intralot should sue for defamation and libel. An ‘official’ would have to be deaf dumb and blind to have missed the allegations/scandals associated with Gtech…a hint: Google Gtech Texas. As far as ‘performance’ issues with technical vendors who want to manage a lottery?…how about Illinois lottery profits over the last decade…Doh!
- Jo - Thursday, Nov 18, 10 @ 2:45 pm:
The point people have been trying to make all along is: The casinos in Illinois were always dingy places with sad-looking people huddled around tables in clouds of smoke.
If you wanted to go someplace for fun, not out of habit, you go to Indiana, Michigan, and Wisconsin, where some of the casinos are actually fun places.
Once the casinos figure out they now have to market to get customers, and make their places attractive and fun, they will be fine. See Rock Island.
And then you have the added benefit of the casinos not just preying upon the addicts.
- Jo - Thursday, Nov 18, 10 @ 2:51 pm:
Huh?
- Rich Miller - Thursday, Nov 18, 10 @ 2:53 pm:
It’s true. It’s a GRT.
- Bill Hannegan - Thursday, Nov 18, 10 @ 2:59 pm:
Jo, good then Illinois casinos can keep their smoking ban and learn to be creative/fun. St. Louis needs the money we have been raking in with smoking-allowed casinos these past two years.
- wordslinger - Thursday, Nov 18, 10 @ 4:26 pm:
==St. Louis needs the money we have been raking in with smoking-allowed casinos these past two years.–
Illinois needs the money St. Louis has been raking in from the City Museum.
If you haven’t been there, it’s absolutely brilliant and inspiring. It’s also a powerful engine for urban retrieval in an area of town that could use some.
Love St. Louis. LaClede’s Landing. Forest Park. Lot of fun.
- foster brooks - Thursday, Nov 18, 10 @ 4:32 pm:
The new casino in rock island is nice, not a dump on a barge.
- Bill Hannegan - Thursday, Nov 18, 10 @ 4:33 pm:
The Federal Reserve study concerning the effect of the smoking ban on Illinois casino revenues kept the St. Louis Board of Aldermen from voting for a smoking ban. http://www.youtube.com/watch?v=uYuYNR-kTU8
- Park - Thursday, Nov 18, 10 @ 5:58 pm:
There’s no reason not to have a smoking floor or smoking room. But I also think bars should be able to cut out a smoking section. Good luck getting that changed. Live with the permenantly reduced revenue. The slots-at-tracks-and-airports will bring in enough more money to make up the difference.
Me, neither smoke nor blow dough at casinos. This taxpayer thanks those of you who do, though.
- Dave K - Thursday, Nov 18, 10 @ 6:30 pm:
Harrahs, and the Ameristar in the St. Louis area did nothing to upgrade since the new Casino Queen opened,, yet they took a much smaller recession hit that the Queen since the start of the IL ban. True, the whole gaming loss in IL is due to more than one factor, but the ban is clearly the biggest factor.
Btw, how, or why should IL casinos upgrade when revenues are down??… those casino companies will more willingly spend for improvements in jurisdictions where they think gambling revenues are the most lucrative.
Some of the NV gambling downturn , BTW is due to the increasing availability of local gambling, so that gamblers no longer need to travel to NV like they did in the past. Another factor leading to the ( smaller) decline in NV is the banning of smoking at all venues except bars and gambling space.
So the bottom line is: MO casinos with no bans at all, are about even, NV with a partial ban is down 10%,, IL with a total ban is down 20%. Am I the only one who sees a trend here?
- chitownguy - Thursday, Nov 18, 10 @ 11:15 pm:
Dave -
Can you really compare the Harrah’s in St. Louis to a majority of Illinois casinos? It was remodeled several years ago and is huge. Much larger than I can think of than any of the Chicago area casinos. They have (or had) nightly dance shows at iBar, concerts with major acts, hotel attached to the property, etc. They make it fun. (They also wash their chips more than once a year…)
I havent been to Ameristar, but a glance at their website also leads me to believe they offer a lot more (they list a hotel and spa, concerts and even MMA matches) than Illinois does.
As for upgrading when revenue is down…well, they can keep on with business as usual. It’s obviously working out so well for them already. They are a business. This is capitalism. Sink or swim. If they can’t make it work, I am certain someone else will pay a pretty penny for the license that can.
And, yes, I’m a tried and true bleeding heart liberal.
- Marty - Friday, Nov 19, 10 @ 1:00 am:
Don’t expect the IL boats to invest in a whole lot of improvements when the AGR tax takes 45-50% of each marginal dollar, the highest rate in the nation except Pennsylvania. The states around us have taxes in the 30-35% range.
The Jumer expansion included about 500 new gaming positions that had been authorized for decades but never used. No one else is in the position of having unused positions.
There is NO QUESTION that the smoking ban hurts. Its proponents should just argue honestly that they think the health benefits outweigh the loss of business and revenue, a perfectly reasonable and honorable position. But saying it doesn’t hurt business insults my intelligence.
- Michael J. McFadden - Friday, Nov 19, 10 @ 4:14 am:
I believe the graph is a bit deceptive and that the story writer didn’t catch it. Doing a VERY quick “eyeball” estimation of the graph lines before the month of the ban, and comparing it to the figures after that month up to but not including the new casino opening, it would appear that:
Coincident with the implementation of the smoking ban the Rock Island revenues plunged almost 10% while the Iowa casino without the ban went up almost 10%. My percentage figures might be off because all I did was eyeball it from month to month (You’re welcome to do the full figuring if you like.), but there seems indeed to be a clear effect that is hidden both by the complexity of the bar graph style and by the impact of the new casino renovation.
To see a similar impact on Minnesota’s “Charitable Gambling Revenue” see the very simple, but accurate, graph on page 18 of “The New Stiletto: The Lies Behind The Smoking Bans” freely readable/downloadable at:
http://kuneman.smokersclub.com/PASAN/StilettoGenv5h.pdf
The Stiletto graph VERY clearly shows the direct impact of the partial MI bans and the even stronger impact of their total ban. It *also* shows how the whole “Worldwide Economic Meltdown” impact argument is nonsense: the additional dip at the end of 2008 from that meltdown looks like barely more than a blip after the disaster of Minnesota’s smoking bans.
Feel free to share any criticisms: I am open about who I am, what “competing interest” could be claimed for me, and I stand firmly behind every word that I write.
Michael J. McFadden
Author of “Dissecting Antismokers’ Brains”
- Dave K - Friday, Nov 19, 10 @ 7:13 am:
Hey, Chitownguy,
Actually the Queen has a nightclub, and an attached hotel, just like Harrahs. So, while one cannot compare Harrahs to the majority of IL casinos, one can compare Harrahs to the Queen. Yes, Harrahs upgraded several years ago, but the Queen upgraded only about 6 months before the ban kicked in. So the Queen’s upgrade is more recent.
In addition, the Queen is very close to metrolink (The St. Louis mass transit system) while Harrahs is not,,,so the Queen is easier for those without cars to get to.
I went to the Queen before the ban kicked in,,it (was) really nice.