To hear them tell it, you’d think casinos are doing Illinois a favor by operating here. Ever since Illinois enacted the statewide indoor smoking ban that went into effect in 2008, casinos have been predicting dire consequences for the state’s gambling industry. Now they are touting a report by economists at the Federal Reserve Bank of St. Louis that says state and local governments lost $200 million in taxes in 2008 due to the ban.

To hear them tell it, you’d think casinos are doing Illinois a favor by operating here.

Ever since Illinois enacted the statewide indoor smoking ban that went into effect in 2008, casinos have been predicting dire consequences for the state’s gambling industry. Now they are touting a report by economists at the Federal Reserve Bank of St. Louis that says state and local governments lost $200 million in taxes in 2008 due to the ban.

We won't argue the contents of the report, though we think the gaming industry in the past has carefully avoided certain details — like the opening of the palatial Lumiere Place casino/hotel complex in St. Louis in December 2007 — in inflating the smoking ban’s impact on Illinois casinos. Economists Thomas Garrett and Michael Pakko take a reasoned and careful approach in their analysis and offer some compelling evidence why the gambling industry is especially sensitive to bans on indoor smoking.

But the casinos should not expect Illinoisans to weep for them because the tax money they so generously provide the state has gone down. The casinos are not here out of benevolence to the state. They’re here to make money for themselves, and they are indescribably adept at it.

What we have consistently (and repeatedly) wondered is how an industry that displays such ingenuity in making people part with their money runs out of ingenuity when it comes to operating smoke-free casinos. Their solution to operating in a newly smoke-free Illinois has been to fight the law and try to carve out an exemption for themselves.

If that’s their approach, there are probably many other public health and safety laws Illinois could bend for the benefit of the casinos.

Fortunately, lawmakers have not caved to these pleas and have upheld the smoking ban for what it is: a public health measure that covers all Illinoisans, including those who gamble and work in casinos.

And while the gaming industry zeroes in on the Federal Reserve report’s numbers, we prefer to focus on a single sentence in the report that takes in the bigger picture:

“In a full analysis, these costs need to be considered alongside other costs and benefits, including the public health benefits of the legislation.”

State Journal-Register

On the Web
The Federal Reserve Bank of St. Louis has published a study and an overview article showing that a state smoking ban is responsible for declining casino revenue. The article can be seen here: http://research.stlouisfed.org/publications/regional/09/07/casino_smoking.pdf.

The working paper on which the article is based can be seen here: http://research.stlouisfed.org/wp/2009/2009-027.pdf.