In the fight to ban smoking in casinos, a new strategy has emerged: shareholder voting.
shareholders Boyd Gaming, Bally’s Entertainment And Caesars Entertainment will put proposals to respective casino companies to vote on to force them to consider the costs associated with allowing smoking indoors.
The proposals are sponsored by Trinity Health, a nonprofit health network, and the Americans for Nonsmokers’ Rights Foundation. Trinity Health, based in Livonia, Michigan, has used its shareholder status to fight for various health initiatives despite owning only a tiny fraction of those companies. For example, public records show Trinity owns just 440 shares of Bally stock, or about 0.001% of the company.
Boyd, Bally’s and Caesars fought to keep the proposals out of proxy materials distributed to shareholders. The Securities and Exchange Commission rejected the casinos’ proposals and the proposals and reasons for them were sent to all shareholders.
Boyd will have to vote on a smoke-free rating at its annual shareholder meeting on Thursday. Bally’s will hold its annual meeting on May 16, and Caesars is expected to hold its own meeting in June.
The three companies collectively operate 75 U.S. casinos that allow indoor smoking if state law allows it. About 14 states allow indoor smoking in commercial casinos.
States like Nevada and New Jersey have generally banned indoor smoking, but have made exceptions for casinos. Legislation to eliminate indoor smoking in casinos is in various stages in several states across the country, including New Jersey, Pennsylvania and Rhode Island.
Proponents of smoking bans point to research from C3 Gaming, which concluded that smoke-free casinos generate more revenue and outperform competitors that allow smoking.
Supporters of the proposal argue that shareholders should know how much casinos are paying for higher health insurance premiums for their employees, higher maintenance costs and keeping away customers who hate the smoke.
In his statement, Boyd argues that there have been negative impacts in states that have banned indoor smoking. It is argued that these decisions are best left to hotels to follow local trends. If shareholders succeed in enforcing a ban (which Boyd says is the real goal of forcing a review), the company will lose customers to competitors who continue to allow smoking.
Caesars board member Jan Jones Blackhurst said Wednesday at the SBC Summit North America, an online gaming conference, that she believes the decision to ban smoking in casinos should be left to governments. She noted that experience has shown that smoke-free casinos could suffer economic harm.
“If you look at the United States, generally when casinos ban smoking, revenue drops by 20 to 25%, which in turn creates a huge layoff factor as people start losing their jobs,” she said.
Union responses are mixed. While some worry about potential job losses, the United Auto Workers, which represents more than 10,000 table game retailers across the country, has stepped up its efforts to combat smoking in casinos, citing secondhand smoke exposure among its employees.
The Centers for Disease Control and Prevention says, “No amount of exposure to secondhand smoke is safe, and the only way to fully protect nonsmokers from secondhand smoke is with a 100% smoke-free indoor air environment.”
The US Surgeon General says many common practices in casinos, such as separating smoking and non-smoking areas, purifying the air and ventilating buildings, do not provide effective protection against secondhand smoke.
Casino operator Parx, which operates locations in Pennsylvania, has decided to remain smoke-free at its Bensalem property, north of Philadelphia, during the Covid pandemic. It competes with four other local casinos that allow indoor smoking, but said its market share has not suffered.
“From a financial perspective, we know we’ve lost some customers, but we also know we’ve gained some customers. We don’t believe we’ve seen any significant impact in either case,” Parx spokesman Marc Oppenheimer told CNBC.
Instead, the company focuses on guest satisfaction scores and surveys that indicate increases in employee morale.
In Las Vegas, MGM Resorts opened the first casino resort on the Strip, banning smoking indoors and even on the pool deck. On its website, the property states: “Here at Park MGM we are not afraid to be different and as you may have noticed, we value freshness. This includes the air you breathe.”
For now, Park MGM is the exception, but smoking ban advocates hope it will soon become the rule.
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2024-05-09 20:40:46
www.cnbc.com
