Issue 320
October 30 - November 5, 2006
Volume 6
page 2
 

Nevada casinos' worries may be just smoke
By Liz Benson, Our Partners at the Las Vegas Sun

LAS VEGAS, Nevada -- Neither of two competing measures on next month's ballot to restrict smoking in Nevada dares to prohibit smoking in casinos.

The gaming-floor exemption to both smoking ban proposals reflects Nevada's libertarian attitude toward compulsive behavior and the understanding that smoking, drinking and gambling go hand in hand.

Preventing gamblers from smoking, the assumption goes, would be bad for business, and therefore bad for the state.

Some gaming insiders are quietly worried that in the next decade, a wave of public opinion may be calling for a total ban on casino smoking.

But evidence suggests that Nevada could acclimate to nonsmoking casinos and that the gaming industry could actually benefit by it over the long haul - while sparing casino employees the health risks of working around smokers.

Question 5 on next month's ballot, supported by the Nevada State Medical Association, the American Cancer Society and other health groups, would ban smoking in most venues save for the gaming floors of casinos. The initiative exempts bars that don't serve meals, although most bars in Nevada - partly to comply with a law allowing slot machines in bars only if gaming is "incidental" to the business - also prepare food.

Question 4, backed by gaming interests as a response to Question 5, would ban smoking in retail stores, galleries, libraries, museums and similar places that already tend to be nonsmoking, while allowing bars as well as grocery stores and convenience stores with slots to continue to accommodate smokers in those gambling alcoves.

If both petitions get more than half of the vote, the petition with the most votes would win.

The gaming industry's opposition to smoking bans is based on anecdotal information about customer preferences and a long-standing belief that smokers, who tend to gamble more than nonsmokers, have a right to smoke.

"It would make our job easier if no one smoked, but the fact is that they do," said Judy Patterson, executive director of the American Gaming Association. "We have to balance two sets of needs."

To accommodate nonsmokers, some casinos have improved their ventilation systems, leading to noticeably cleaner air. But not all casinos can afford to install the latest technology.

While there are long-standing assumptions that a smoking ban would hurt the casino industry, there is substantial evidence suggesting that smoking bans do not hurt businesses - and over time, might help them.

The casino trade publication Global Gaming Business will soon report a study it commissioned that concluded that casinos might pick up more business than they would lose if they banned smoking. In one poll, 31 percent of casino customers questioned indicated they would visit casinos more often if they were smoke-free, compared with 11 percent who said they would patronize another casino that allowed smoking, according to Global Gaming Business Editor Roger Gros.

"Most casino executives realize that the horse has left the barn and they're going to have to consider (a smoking ban) now or later," he said.

Casino executives have not needed to weigh in on the issue so far, because of successful efforts over the years to fend off smoking restrictions.

Dozens of studies indicate that the effect of smoking bans on bars and restaurants in other states, while perhaps not as rosy as some anti-smoking groups would submit, aren't nearly as doom-and-gloom as predicted.

Government-funded, peer-reviewed studies by academics tend to conclude that smoking bans have had a neutral to positive effect on business. Studies funded by the tobacco industry or other business groups suggest the opposite, by downplaying the potential increase in business over time from nonsmoking customers.

Experts on both sides of the debate say tax receipts are the most effective way to analyze the economic effect of smoking bans.

Figures in California and New York, the largest markets with smoking bans, suggest that bans could hurt restaurant and bar business in the short term but that business can improve in the long term.

According to the New York State Department of Taxation and Finance, taxable sales among bars and taverns statewide fell 3 percent in the first three months of the 2003 smoking ban from the previous year and were relatively flat over the next four quarters. Full-service restaurants averaged 3 percent to 4 percent increases in the four quarters following the ban. Trends for New York City were similar.

The increases occurred at a time when the city and state experienced rising retail sales, while comparisons were made against a period in which New York was still recovering from the residual effects of the Sept. 11, 2001, terrorist attacks.

The California Department of Health Services, using state reports on taxable sales from 1990 through 2002, found that the 1995 smoking ban in restaurants was followed by an increase in revenue and the 1998 smoking ban in bars was followed by increased bar revenue.

State statisticians concluded that any loss of business from smokers was "more than offset" by nonsmokers who had previously eschewed smoking environments.

While it's possible that the increases in revenue might have been larger had smoking remained legal, researchers said that conclusion is unlikely because they found significant increases in revenue even after controlling for trends in entertainment spending in specific counties.

Gaming and tavern interests say tax revenue information on bars and restaurants isn't comparable to casinos.

"We don't buy the premise that this is California or New York," said Ron Drake, owner of the Point After Lounge in Las Vegas and a board member of the Nevada Tavern Owners Association, which is backing Question 4 along with slot route operators who own slots in grocery and convenience stores. "This is a unique economy based on gaming revenue. Smoking is very much a part of (gamblers') lives."

Casinos fear what happened at Casino Windsor, which sits across the Canadian border from three Detroit casinos. It laid off hundreds of people and its revenues dropped about 20 percent in the early weeks of an Ontario smoking ban that took effect in June. Border slowdowns and a strong Canadian dollar also contributed to a decline in business from Americans, some of whom were lost to the Detroit casinos.

Data from Delaware suggest that casinos have been able to rebound from an initial drop in business after smoking bans were enacted.

Gambling revenue fell by about 10 percent in the year following a November 2002 smoking ban in Delaware that included the state's racetrack casinos. Revenue fell another 4 percent in the year following the ban. Since then gaming revenue has increased gradually .

A 2005 study conducted by researchers at the University of California, San Francisco - the first government-funded report on the economic effect of smoking bans in casinos - showed no correlation between the smoking ban and a decline in business when controlling for factors such as the economy and inflation.

Ed Sutor, chief executive of the company that owns the Dover Downs hotel and casino in Delaware, disputes that contention, but he said the ban ultimately proved a good thing for his business.

Sutor says the company's revenue effectively dropped by at least 20 percent given that the company's revenue prior to the ban was growing at a clip of about 10 percent from the previous year.

"It set the company back by at least a year," he said. "We lost all that growth."

Sutor said smoking bans "will hurt - but you'll get over it."

The ban has become a selling point for the property, which is attracting nonsmokers as well as smokers who continue to smoke outside.

"Long term, it's going to be good for the company," he said. "We don't have to clean the place as much. We have domes with clouds on the ceiling and the clouds were turning yellow. And it helps with health benefits."

 

 

 



Another casino cruise proposed for South Carolina

As reported by the Myrtle Beach Sun News

SOUTH CAROLINA – "A Florida man said this week he wants to open a new gambling cruise in Horry County.

"David Hunt of Sea-Quest Cruises, who first approached the county last month, said Wednesday he will soon request another meeting with county staff to discuss his options.

"…It could be the county's - and South Carolina's - third casino boat, and that has ruffled political feathers.

"County Council Chairwoman Liz Gilland called news of Hunt's interest 'bogus' earlier this week when Little River Councilman Harold Worley used the news to press for a tax on the casino boat industry.

"…Hunt approached Worley and County Attorney John Weaver just before a crucial vote on regulating casino boats during a Sept. 19 council meeting.

"…Hunt said he may be willing to open his books and pay the taxes if it's required…"

PGIC, Harrah's plan new poker game
Press Release

LAS VEGAS, Nevada – Progressive Gaming International Corporation (NASDAQ: PGIC), a leading provider of diversified content and technology products and services used in the gaming industry worldwide, announced today it intends to introduce an exciting new way to play Texas Hold'em poker: the World Series of Poker® "Peer to Peer" Texas Hold'em game.

The World Series of Poker "Peer to Peer" Texas Hold'em gaming system will be designed to allow patrons to play poker on a wired or wireless device on a secure intranet server managed from within a casino in jurisdictions where it is legal to do so. A poker player will be able to play World Series of Poker "Peer to Peer" Texas Hold'em at a variety of locations within a casino, without the need to be physically located at a poker table. Players may be able to play within the casino property at a bar, restaurant, and even poolside.

The World Series of Poker "Peer to Peer" Texas Hold'em gaming system is expected to be offered on a wireless and wired hardware platform with the use of a mobile handheld device or a fixed terminal. This will help casino operators to leverage "unused gaming space," and create potential opportunities for incremental revenue growth without having to displace other products.

Harrah's Licensing Company, LLC, an affiliate of Harrah's Entertainment, Inc. (NYSE: HET) has extended the license for the World Series of Poker brand to PGIC on a limited exclusive basis for a six year term. Upon receiving Gaming Laboratories International ("GLI") approval, PGIC has committed to place a minimum number of units which the company fully expects to meet based on early customer interest.

"We are pleased to partner again with PGIC in leveraging the most powerful brand in poker worldwide, the World Series of Poker," Ken Weil, senior vice president of gaming at Harrah's commented. "Many regulated operators do not have poker rooms. The World Series of Poker "Peer to Peer" Texas Hold'em gaming system provides operators with the ability to offer their patrons the opportunity to participate in exciting Texas Hold'em poker game competitions that capture the excitement of an authentic WSOP experience. As a casino operator and brand licensor, we are very excited by the strategic and economic opportunity that the World Series of Poker "Peer to Peer" Texas Hold'em gaming system can provide Harrah's."

Russ McMeekin, President and CEO of PGIC stated, "With the success of our previously released game incorporating the World Series of Poker brand on our Texas Hold'em Bonus poker live table game, and the continued success of the live World Series of Poker event, we are very excited about the further expansion of our partnership with Harrah's. With the popular TV ratings of the World Series of Poker events and early customer interest in the "Peer to Peer" version, we expect another successful product launch. We believe the "Peer to Peer" system, both the wired and/or wireless versions, has a potential global marketplace of over 5,000 legalized gaming venues. We are delighted and honored to partner on this very exciting global initiative, which is intended to leverage our extensive acquisition and development investments in secure thin-client wired and wireless server based technologies. We expect to submit this system to GLI during the fourth quarter of 2006 and comply with other standard regulatory approval processes. We expect to submit this system to other jurisdictions such as Nevada, New Jersey, Canada and other International markets throughout 2006-07. We expect this new poker gaming system to be of one of our key products showcased at the upcoming global gaming show this November in Las Vegas."

Meat Loaf


Trump Taj Mahal: Bat Out of Hell in 1977. Bat Out of Hell II: Back into Hell - 16 years later. A Grammy and nearly 50 million copies of the Bat albums sold worldwide, Meat Loaf is back better than ever with Bat Out of Hell III: The Monster is Loose. He will be performing in the Arena on Friday, November 10th.

Dates: Friday, November 10

Time: 8 p.m.

Ticket Prices: $95, $75 and $65

For more information: 1-800-736-1420

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