ANNAPOLIS — Maryland could be leaving additional casino revenue on the table because of a statewide ban on indoor smoking, according to one state delegate
Del. Jay Walker, D-Prince Georges County, said he believes the Maryland Lottery and Gaming Control Agency should undertake a study to determine if Maryland casinos, and in turn the state, could see an increase in revenues by allowing smoking inside the state’s five operating casinos and MGM National Harbor in his home county when it opens.
“At the end of the day, it’s about capturing revenue, making the folks in Maryland stay in Maryland, that’s what gaming was always created for in the first place,” said Walker. “I think we should take a look at it and see if it is something we should pursue.”
Smoking in Maryland casinos was banned when the state legalized table games. Smoking is still legal in casinos in West Virginia, Atlantic City, New Jersey and in Pennsylvania.
Currently, only Horseshoe Casino in Baltimore operates an outdoor gaming area that allows smokers to light up while playing slot machines.
That will change later this year.
Last month, the Maryland Lottery and Gaming Control Commission approved a proposal by the operators of the Rocky Gap Casino to build an outdoor area that will include 30 machines in a semi-enclosed area. The plans include the installation of a pressurized HVAC system that will force smoke away from the casino. The system will also keep out the inclement weather, according to plans filed with the commission by the casino.
But Walker said the state should consider taking a step beyond just an outdoor smoking patio in an effort to prevent people from leaving the state to gamble in places like Charlestown, West Virginia.
“I’m separated from the state of Virginia by a bridge,” Walker said. “It’s naive for me to think people aren’t going to Virginia to buy cigarettes when they can buy them there cheap. I know they do. It’s naive for us to sit here and think people aren’t going to Charlestown and some of these other jurisdictions that allow smoking in casinos when I’ve had people in my district tell me that’s why they catch a bus to go there. I didn’t just make it up.”
Gordon Medenica, the newly appointed director of the state lottery, said his agency will “steer clear” of a position on whether or not to legalize smoking in casinos.
“I think you would have higher revenues but that I will defer to the policymakers on the trade-off between the revenue and the health risks — and that’s exactly what it is,” Medenica said.
A change in the smoking laws to the benefit of casinos would not be the first time gambling venues were treated differently from other businesses. Hollywood Casino, Horseshoe Casino, Maryland Live, and Rocky Gap have 24-hour liquor licenses.
Stephanie Steinberg, chairwoman for Denver, Colorado-based Smoke-Free Gaming of America, said the move to open casinos in Maryland and other states to smoking is driven solely by the desire of casino operators to increase profits.
“It’s a ploy,” Steinberg said. “In their minds, it’s all about the profits. They have no concern for the health of their employees whatsoever.”
A number of studies in recent years have raised concerns about the negative effects that smoking bans have or will have on gaming revenue. Most note that gambling and smoking are almost inextricably intertwined, with smokers making up a large number of those who are also casino patrons.
A 2009 study of a smoking ban in Illinois by the Federal Reserve Bank of St. Louis found that casino revenues declined by $400 million and state and local government revenue declined by $200 million.
A 2014 Duquesne University study found that revenue in the same state decreased by 23 percent as a result of the ban.
Most recently, analysts expressed concern about a smoking ban imposed in Macau, China, that will affect casinos there and could result in a 20 percent reduction in playing time, according to Bloomberg Business.
Steinberg would not contradict the financial studies but argued that they do not take into account the health risks to employees.
“If you want to get in and get out of the stock market in one day, that’s the short term,” Steinberg said. “We should be taking a longer-term approach if you want to keep employees healthy. That’s the approach government should be taking.”
Other legislators, such as Del. Eric Luedtke, D-Montgomery County, say the health risks outweigh any financial gain the state could realize.
“Given the choice between increasing revenues and preventing people from getting cancer, the choice is clear,” Luedtke said.