American casinos allow cigarettes
May 30, 2006
BY GRETA GUEST
FREE PRESS BUSINESS WRITER
More signs seem to point metro Detroiters away from Casino Windsor -- the strong Canadian dollar means our dollar doesn't stretch as far in the slot machines, and a new smoking ban that kicks in at midnight Wednesday could keep smokers on this side of the Detroit River.
The smoking ban includes all enclosed workplaces and public places in Ontario and so is expected to hurt the casino's business -- 80% of which comes from Michigan.
"We expect there will be a decline in gaming revenue in the short term," said Teresa Roncon, senior manager of public relations for the Ontario Lottery and Gaming Corp., which owns Casino Windsor.
At the three Detroit casinos, smokers can still light up anywhere but the third floor of MotorCity Casino. And the casino operators are hoping that the Ontario smoking ban and the currency exchange rates will mean better business for them.
To keep gamblers coming, Casino Windsor is building two outdoor patios that will have seating areas for smokers and is planning more spectacular giveaways, such as two Ford Mustangs and $2,500 in free gasoline in June. It also has 128 of its 389 hotel rooms designated for smoking.
Depending on how severe the revenue drop is, the casino may have to lay off workers, said spokeswoman Holly Ward. The casino employs about 3,800.
Some say the casino might replace the lost smoker business with nonsmokers who have stayed away from the casino because they didn't want to be around the smoke.
"I think there will be some that choose not to go because there is no smoking," said Thomas Goebel, president of Lakefront Lines, a Cleveland-based tour company that runs six daily tours from metro Detroit to Casino Windsor. "But there are a lot of places where people can't smoke, so it will probably even out."
Ahmed Wardi, 41, a Windsor resident who was enjoying a cigarette at Casino Windsor's Marketplace Buffet last Thursday, said he visits the casino every day. But the three-pack-a-day smoker said he would "go to America" once the ban takes effect.
But other smokers were not as concerned about the new law. Bernice Bissonnette, 67, of Woodslee, Ontario, said she likes smoking while she plays slots, but the ban won't end her enjoyment of gambling.
"I don't smoke in my house, I don't smoke in my car," Bissonnette said. Where does she smoke? "Outside."
Detroit's three casinos had combined revenues of $1.23 billion in 2005. Casino Windsor revenues for last year were $383.9 million.
"We anticipate that we will definitely see an increase on this side of the border," said MotorCity Casino spokeswoman Jacci Woods. "For so many people that is part of the gaming process, smoking and gaming."
The Ontario government approved the Smoke Free Ontario Act last year to reduce tobacco use by 20% by 2007. Tobacco use kills 16,000 Ontario residents every year, and tobacco-related illnesses cost the economy at least $1.7 billion in health care, according to the Ontario Health Ministry.
The ban includes all bars, restaurants, bingo halls, schools, sports arenas, work vehicles, workplaces and shopping malls.
"This is a health issue. We are dedicated to providing a safe atmosphere for our patrons and employees," Roncon said.
Casino Windsor also is in the midst of a $361.7-million (U.S.) expansion of its casino that includes a 400-room hotel tower, a 5,000-seat theater and 100,000 square feet of convention space.
The casino opened in 1998. Its gaming revenues have fallen 36% since the 9/11 terrorist attacks slowed border crossings and the Detroit casinos attracted some gamblers away from Windsor. Starting in 2008, all U.S. citizens will have to show their passports to cross the border, which could deter visitors.
Casino Windsor drew nearly $600 million in annual revenue before the 2001 attacks. Now, the casino is drawing about $383.9 million a year. And daily traffic has fallen from around 18,000 before 9/11 to about 12,521 visitors on average each day.
The Canadian dollar has gained a lot of strength since 2001 when a U.S. dollar bought nearly $1.60 in Canadian currency. On Friday, the U.S. dollar was worth $1.10 Canadian.
A study released by the Fair Air Association of Canada indicated that in Ontario communities that have smoking bans, bar and pub sales dropped anywhere from 18.7% (in London) to 24.3% (in Kingston). And projections by Mychoice.ca, a group funded by the tobacco industry, has estimated the ban would have an initial impact of between $250 million and $350 million in revenue losses for Ontario's gaming industry.
Casino Windsor is not releasing its own projections of revenue declines. Roncon said in some of the other 23 properties the Ontario government owns that have banned smoking in recent years, the track record has been an initial drop in revenue followed by a rebound.
Penalties for violating the smoking ban carry a maximum fine of $100,000 for individuals and $300,000 for companies, according to the Ontario Ministry of Health Promotion.
But what could prove to be Casino Windsor's ace in the hole in all this is taxes. Gamblers are promised tax-free winnings in Ontario, as the government does not tax them. Of course, they are supposed to report the income on their U.S. tax returns but the casino does not report the winnings, Roncon said. |
