Recently, the chairman of Hard Rock and the Governor of New Jersey, Phil Murphy, spoke about the economic challenges associated with the proposed casino smoking ban.
Governor Murphy said that he intended to sign a bill seeking to suspend smoking in the 9 casinos in Atlantic City in case local lawmakers give their approval to the proposed piece of legislation. The beginning of a week saw a spokesperson confirm that New Jersey Governor maintains his stance on the measure that is currently awaiting the approval of the state Legislature but refused to make more commentary on the matter.
In an interview with The Associated Press on June 6th, the chairman of Hard Rock International, Jim Allen, said that smoking was one of the few topics that he and the Governor have discussed in the last few weeks. Mr. Allen said the did not think he was trying to change the Governor’s mind on the matter and explained that it had been more of a general conversation linked to the impact a smoking ban would have in case one was brought into action and the economic difficulties of such a ban.
The chair of the US casino and entertainment giant reminded that the company was operating in many states that do not allow smoking on casino premises. However, he noted that markets where smoking had been suspended usually experienced large double-digit declines in casino revenue.
Smoking Currently Limited to Only 20% of Atlantic Casino Floors
Under the smoking laws in New Jersey, which currently suspends smoking in most public places, casinos are exempt from this ban. Currently, smoking should be limited to no more than 20% of the casino floor.
The proposed piece of legislation was left untouched in the state Legislature for months. So far, it was not revealed whether or when New Jersey lawmakers planned committee hearings on the measure, which has 37 Assembly co-sponsors and 16 Senate co-sponsors.
According to anti-smoking campaigners, casinos are simply exaggerating the potential economic impact that a smoking ban would have, predicting that customers and revenue will such venues will manage to regain their customers and revenues after the initial period to adjust to the changes passes.
A group of Atlantic City dealers has been trying to convince local lawmakers that smoking in casinos should be suspended. The proposed smoking ban, however, has faced opposition from the trade group representing local casinos, The Casino Association of New Jersey. In February 2022, the group commissioned a report, according to which such a move would lead to widespread revenue and job losses across the casinos in Atlantic City.
While they have been previously hit by the detrimental impact of the Covid-19 pandemic and the lockdowns associated with it, the financial state of Atlantic City’s casinos has been improving. As a whole, their profitability increased over the first quarter of 2022, in comparison not only with the year before but also to the period before the coronavirus pandemic. Individually, only 4 of the 9 AC casinos reported higher gross operating profit than the one they reported over the first quarter of 2019.
According to reports, much of the aforementioned increase was attributable to the 2 newest casinos in Atlantic City, Ocean and Hard Rock.