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2. Economics & Analysis 4. Gaming & Casinos

Smoking Ban at Harrah’s New Orleans

City Ordinance Allows for Study of Policy Impact to Gaming Market

On April 22, 2015, a city-wide smoking ban went into effect in New Orleans. Despite protest from its ownership, the ban applies to Louisiana’s only land-based casino, Harrah’s New Orleans Hotel and Casino. Harrah’s, joined by other New Orleans’ businesses, is suing to have the ordinance removed on the basis that they expect to lose significant revenues. This loss, they allege, will consequently hurt local tax revenue collections and potentially cost local jobs as well.

HarrahsGaming facilities are usually reluctant to go smoke-free. When approached by anti-smoking advocates, these facilities indicate they would lose substantial revenues if they shunned smokers. Typically these facilities offer smoking and non-smoking areas to accommodate both types of visitors.

In the Gulf South, only Florida has a state-wide ban on indoor smoking which includes its gaming establishments. However, Florida’s smoking ban does not apply to Native American gaming facilities because these facilities are on sovereign land. Alabama only has Native American casinos, therefore smoking is permitted in all gaming facilities throughout the state. There is no casino-smoking ban in Mississippi; however, one of its many casinos, the Palace Casino, voluntarily went smoke-free.

In Louisiana, there is no statewide smoking ban at gaming facilities. Harrah’s New Orleans competes in a local market which encompasses the New Orleans metro-area, with one racino and two riverboat casinos. However, the recently enacted smoking-ban only affects facilities within Orleans Parish (i.e., Harrah’s and the Churchill Downs’ Fair Grounds Racecourse and Slots). The two riverboat casinos technically operate outside of Orleans Parish, and are thus allowed to operate without prohibiting smoking.

no_smoking_sign_clip_art_23316So, because of this unique local market that includes smoke-free and smoking-allowed gaming facilities, there is the possibility that some portion of smokers will chose to visit the two riverboat casinos outside of Orleans Parish instead of the two smoke-free facilities within. However, the two smoke-free facilities are now afforded the opportunity to attract visitors who are only interested in smoke-free establishments. Unlike Harrah’s, the Fair Grounds does not seem to be publicly objecting to the smoking ban.

This situation presents an interesting opportunity to study the impact of smoking bans on gaming facilities in a discrete market. Will tourists visiting New Orleans opt not to visit the casino in the tourism center of the city (Harrah’s) and instead venture out to the two “locals-casinos” in the suburbs of the New Orleans metro area?

This week the annual Southern Gaming Conference is being held in Biloxi. This conference usually covers regional gaming industry topics of interest which have included discussions of smoking bans and their impacts on casinos in the past.

If you are planning on attending the Southern Gaming Conference this year, we would love to hear your stories via Twitter.

Submitted by:

Nicholas Farrae
Senior Analyst, Economics and Gaming

The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

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