Will NJ Governor Phil Murphy’s Atlantic City Smoking Ban Really Hurt Casino Revenues?

New Jersey Governor Phil Murphy (D) has indicated he would support a permanent smoking ban inside the nine casinos operating in Atlantic City despite being a strong supporter of gambling in town. Casinos there had been operating smoke-free between July 2020 and July 2021 as part of a temporary ban that went in place soon after the venues reopened after closures ignited by COVD-19 restrictions. Murphy was responsible for that temporary ban. Recently, the Governor was asked by reporters if he would approve a bill banning smoking at all gambling facilities if one were to be passed by the state legislature. His response was very clear on where he stands on the issue, “There was a period of time due to the public health emergency where we did not allow that (smoking) in the casinos. But at a certain point, that was always going to expire, and it did expire.” Murphy went on to say, “I’ve said this unequivocally…if legislation comes to my desk that would ban smoking in casinos, you should assume that I will sign it.”

What Others Had To Say

Bob Zlotnick, the co-founder of Smoke-Free AC, remarked that any move to ban smoking in casinos would have to first clear the Assembly, “We’re hopeful, it’s really good news that Governor Murphy said that, but if it doesn’t hit his desk, he has nothing to sign.” The Americans for Nonsmokers’ Rights (ANR) agreed that the Governor has made it clear where he stands on the issue which would be signing the legislation, “to close the casino loophole and protect the health of gaming employees while they are at work.” ANR CEO Cynthia Hallett adds, “We know that Senate President (Steve) Sweeney, in particular, stands in the way.” She went on to state, “The governor must go further and publicly call for Senator Sweeney and Speaker (Craig) Coughlin to send a bill to his desk in the lame-duck session. Atlantic City workers cannot wait any longer.” On the other side of the coin, the Casino Association of New Jersey (CANJ) feels that a smoking ban would negatively impact Atlantic City gambling facilities. “Going completely nonsmoking would place Atlantic City casinos at a competitive disadvantage with other nearby casinos that allow smoking. A smoking ban would have a significant adverse effect on Atlantic City, resulting in a decline in customers which would cause job loss, and ultimately a decline in tax revenue.”

Murphy Stance Is Firmer Than Before

A few months ago, the governor was involved in a briefing on the state’s progress in dealing with the coronavirus. At the time, Murphy stopped short of saying he was supportive of the ban on smoking in casinos by saying, “I would be very constructive on that legislation.” A half dozen state officials have co-sponsored Senate legislation to close a loophole in the New Jersey law which would effectively eliminate the smoking ban exemption for casinos in the state. The issue dates back to 2007 when the state passed the Smoke-Free Air Act. In it was a stipulation that permitted Atlantic City to designate a quarter of the gaming floor in casinos for smoking. The proposed bill to ban smoking permanently is controversial on many levels including with lawmakers and casino operators.

New Jersey Did Not Set The Pace

The smoking ban in Atlantic City casinos for the twelve months between July 2020 and July 2021 was not exclusive to New Jersey. During the pandemic restrictions, the states of Pennsylvania and Michigan also issued temporary smoking bans at gambling facilities. The goal was to reduce transmission rates of COVID-19 following the reopening plans in each state related to health guidelines provided by health department officials. The smoking ban has since been lifted by all three states. Casino operators in New Jersey fear that a permanent smoking ban would send gamblers to Pennsylvania as a result.

Upcoming Election May Derail Non-Smoking Plans

Governor Murphy is nearing the end of his first term in office. He is up for reelection on November 2 and will be going against Republican challenger Jack Ciattarelli. Polls give Murphy a double-digit lead over the Republican hopeful so at this point, everything looks favorable for Murphy to enter a second term, however, funny things happen at elections. So, in reality, the future of the non-smoking ban in Atlantic City casinos hangs in the balance. Murphy most certainly favors it, even stating back in June that anti-smoking advocates had made “a very compelling case.” It comes down to how much pressure casino operators can put on the issue with their argument that a smoking ban will ultimately hurt the gambling business.

New Jersey Gambling Totals

To put this issue into perspective, let’s look at the gambling revenue numbers from New Jersey. In 2020, the gross casino gaming revenue totaled $2.88 billion. That was down 16.9% from the $3.47 billion collected in 2019. The drop would be related to COVID-19 closures and capacity limits put in place as part of pandemic restriction in 2020. However, the gaming tax revenue for the year was still significant at $350.9 million. All of this was generated from the nine land-based casinos licensed to operate in Atlantic City and legal retail and online sports betting. This number will only continue to increase moving forwards, as the number and quality of online casinos in New Jersey grows. For a list of the leaders, check out Time2Play.

Final Thoughts

The pandemic has changed a lot of the things we used to do. It even impacted the conditions inside Atlantic City casinos. While they were under a ban from smoking, the restriction gave momentum to a plan to make the venues permanently non-smoking. However, there has been a pushback on that proposal. Casino operators fear that a ban on smoking will cut into business. The Governor is in favor of the ban and time will tell if a bill makes it to his desk for signing before an upcoming election. Polls indicate that the incumbent will likely be reelected, which could keep the non-smoking bill in play. There are so many factors that can flip this issue back and forth that it is hard to predict what could be the result. In other words, this is one event you may not want to bet the farm on.

 

Author: Wanda Peters