Posted by: thescoundrel | February 11, 2008

Casinos Minus Smokers Equal Eventual Industry Failure


I am not a bigtime gambler. I do play the lottery for a few dollars ($2<x<$10) a week. I have never been to Las Vegas though I know people who go a regular basis and spend considerable amounts of cash. I have been to the horse races a couple of times. I still know people that used to frequent the East Moline Downs to watch the horse races when it was a huge event for the Quad Cities. I have also been to the Quad City Casino boats a couple of times. Neither my trips to the pony races nor the casino boats were eventful as I lost about $20 each visit. Gambling institutions are just not my cup of tea! I have even been accused, by the gamblers I know, to be somewhat to frugal for gambling as a chosen form of entertainment. I can accept that. And it probably explains why places like Las Vegas lack any allure to me. Which brings me to todays post.

I have been following a post on QCOnline the last few days talking about the Illinois gambling revenue decline. The popular theories seems to involve the new anti-smoking restrictions and the slow economy. I personally cannot stand the smell of smoke. And the decline is most likely a combination of the two but I tend to think you will see by cutting out the smokers you will probably reduce the casinos ability to function and profit the most.

Gambling like booze is a legal vice. And for the states it is legal in, for most it has not been a legal vice for all that many years. Smoking is becoming a barely legal vice. All three have always been closely associated. All three are highly governmentally regulated. They appeal to thrill-seekers. Speak the word gambling and the image that is most likely conjured is of a Las Vegas casino full of scantily clad women dancing on stages, and rooms full of thrill-seeking people smoking, drinking and gambling away their fortunes while rubbing shoulders with society’s more nefarious individuals. When you subtract one from the other in a business system that feeds from these types of thrill-seeking individuals you are going to experience significant financial losses. There is no way of avoiding it.

For years gambling was illegal in most of the US. It was also controlled by the crime syndicates where it was legal and in places where it was underground because it was not legal. But we have sought to homogenize the industry by lessening the Mafia’s influence. As we remove the mob appeal, Vegas has been looking for other attractions to lure gamblers. Las Vegas has even tried to promote it as a family vacation. Considering the most recent Vegas commercials it seems they are now instead trying to sell it as the get away from the family experience, with their infidelity suggestive “What happens in Vegas stays in Vegas” promotions. Here in Illinois we first tried to homogenize it by imposing strict monetary gambling limits. That failed and we lifted those. Now we are trying to make it more homogenized by cutting out the smoking factions. Will that stop the gamblers, no. Will it effect profits yes. Who do you think is going to spend more money at the casino, the casual non-smoking customer who is more likely to set limits to their spending or the thrill-seeking chain-smoker type that is willing to plunk down $5 for a deadly habit that takes aways seven minutes of their life everytime they light up and that needs a cigarette hanging from their lips to function? The thing is the casual gambler is not going to make or break the casinos. And that is all the new types the nonsmoking law is going to attract to the casino. No business makes the big money relying on the casual shopper. The money is made on the serial shoppers or customers. The people who are going to make the casino black lines surge are the people who are thrill-seekers that are not going to worry about smoke, whether they smoke or not. These are people who will be at the casino every chance they have and would spend their grocery money, rent money and even their kids college money to experience the thrill they get from gambling. They are more typically risk takers and are more likely to live by the creed; Live fast, Die young and have a Good Looking Corpse. Can the casinos survive without the smoker factor, probably. But I know of no business that simply wants to survive. The idea of a business is to be successful enough to not have to worry how you are going to pay the bills. Illinois gambling is homogenized. It has no star attraction, it has no uniqueness and now it is smokeless. The smoking ban could very well be the final nail in the coffin for the already struggling Illinois casino boats.

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Responses

  1. Nice post, and you got me thinking that legalized prostitution might soon be next—along with the draconian governmental regulation overkill that is sure to follow.

  2. Th problem I see with those blaming the lessened gambling revenues on the economy is that it does not follow pattern. Vice tends to prosper under a failing economy. And though I can see where it might be construed that the economy could be at least part of the problem due to the homogenization of the industry, hardcore gamblers have always found a way to gamble even during during the depression. I am not so sure we are all that far from legalizing prostitution. You can never take it off the streets and legalizing it would give the government more control plus they could tax it. Blago would probably salivate at taxing such an industry if he thought he could get the legislation pushed through.

  3. I think another problem with gambling is that at least locally, they have over-built.

    I don’t remember exactly where, but there are two or three new casinos set to open on the Iowa side along the Mississippi. One opened near Iowa City not long ago.

    I’m thinking the gambling market might be saturated, at least locally.

    Not that I personally give a hoot. Besides being a non-smoker, I have never been to any of the local casinos, and the only time I have ever gambled was on my honeymoon in Lake Tahoe—and I was gambling in more ways than one! 😉

  4. […] Original post by thescoundrel […]

  5. I agree the area is probably over built in casinos. But that goes back to uniqueness. They have done nothing with the gambling industry or the region to set it apart from any other gambling joint. They have done nothing to add to the attraction they just built the casinos and assumed “they would come”. It has not happened.

  6. if the local casinos are unsuccessful and close, is that such a bad thing?

    personally, i would love to see them all close.

    also, your portrayal of casinos is ALL wrong from my point of view. when i go to casinos (which has only been a couple times) all i see is a bunch of old people with cups full of quarters staring at slots and video poker.

    you do have your people playing card games and the other things, but i think like 80% of the gambling going on is old people on slots. not exactly the rough and tumble image in my opinion.

    heck maybe this smoking ban can kill two vices with one stone. sure we are a free country, but anything we can do to keep our citizens from being idiots is great in my book.

    perhaps yet another reason casinos are seeing less money is the internet. certainly a lot of those card playing folks can get their blackjack or texas hold em fix on the net now. or they can just watch is on espn 22 hours a day!

    oh yeah, back to my original thought. if they leave, so what? you might say, ‘well thats lots of jobs leaving the qc’ and i might say ‘well now people have more money to spend on other things’ so while we might see job loss in terms of casino employment, we would hopefully see sales pick up in other areas. and maybe since people weren’t blowing their paychecks on gambling, they could afford to not get their house taken away from their awful home loan.

  7. Would I personally care if the casinos closed? The only care I would have is only the loss of jobs. Any job is better than no job. People have to live and right now that is the only jobs our incompetent leadership is capable of luring to this town. And those jobs feed other people as well. There is nothing coming in to replace them. You felt the expanding effects in Galesburg when Maytag closed. This area cannot not deal well with any job loss at this point.

    One of the problems our boats have is their lack of uniqueness does not draw from a large enough radius of clientele where they are often just shuffling local and local region money around.

    Hardcore gamblers will wade through the smoke to lose their money. Hardcore gamblers that are smokers will look for another place to spend their money if they cannot smoke. The recent revenue totals reflect that problem.

    As to the old people gambling, yes there is more disposable income usually among the middle class older adult groups. I know a lot of older people that are hardcore gamblers. I used to know several older ladies that would come to town for a week and think nothing of dropping $200-300 a night gambling and never complain. However the nights they won you could expect to hear them gloat about their winnings. Which is where the profit lays not with the casual gambler. I used to work with a man that would travel with his wife to Las Vegas every year with $5000 in his pocket and play until it was gone or his vacation was over. I used to work with another guy that takes 3-4 trips a year to Vegas with around $2000 in his pocket year for heavy gambling. Younger people often have families to care for. Though there are big spenders among them also. It depends partly on their disposable income but mostly on their lust for the game.

  8. yeah, i wasn’t so much talking about the economic factor of older people, merely that you had characterized gambling as some hip cool thing to do when in my experience it is anything but that. well maybe in vegas it is, but thats a different story. around here it is just a bunch of old people playing video poker… kinda hard to build excitement around that no matter what marketing campaign you have going…

    and also about the jobs, thats something i tried to touch on in my original post. i think that because, as you mentioned, these are local dollars primarily flying around, that people are still going to spend excess money. so maybe instead of working at a casino taking my extra bucks, they would instead work at best buy. i would have to assume all the dollars going into gambling would be instead pushed into the retail sector.

    who knows… i just really think both gambling and smoking are things that aren’t really helping our society. but since im overweight i can’t really complain about others lifestyle choices. no ones perfect.


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