Opponents of casino smoking are trying to force three casino companies to conduct thorough reviews of how extinguishing indoor tobacco smoke on their gaming floors would impact their businesses.
Michigan-based health care system Trinity Health and the Americans Nonsmokersβ Rights Foundation (ANRF) recently submitted shareholder proposals to Caesars Entertainment, Ballyβs Corporation, and Boyd Gaming. The submissions request that each company study the financial implications of going smoke-free at all of their casino properties.
The trio of casino companies continue to allow smoking on their gaming floors in states where such laws allow indoor tobacco use. States allowing commercial casino smoking include Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Missouri, Nevada, New Jersey, Pennsylvania, Rhode Island, Virginia, and West Virginia.
Ballyβs runs nine casino smoking properties in seven states. Caesars operates 41 casinos in 12 states that permit indoor smoking, and Boyd has 25 casinos in eight states with smoking.Β
Shareholder Proposals
Trinity Health and Americans Nonsmokersβ Rights are asking each company to investigate β and possibly realize β that excluding indoor smoking is actually good for business. The proposal cites independent research, though commissioned by ANRF, that concluded in 2021 that a majority of gamblers prefer smoke-free casinos.
There are potential business risks to allowing indoor smoking in Boyd Gaming properties, from higher employee health insurance premiums (when compared with casinos that donβt permit indoor smoking), greater maintenance costs, and deterring a significant number of potential visitors who wonβt visit a casino due exposure to tobacco smoke (87% of the American public does not smoke),β the shareholder proposal submitted to Boyd Gaming read.
βShareholders have no guidance as to the costs our Company is bearing for continuing to allow indoor smoking, nor has the Company disclosed the social and environmental costs and risks imposed on its stakeholders,β the submission continued. βShareholders request the Board of Directors commission and disclose a report on the potential cost savings through the adoption of a smoke-free policy for Boyd Gaming properties.β
The boards of the three publicly traded companies have recommended to shareholders that they vote against the submissions to initiate a review of smokingβs effect on business.
Boyd will hold its 2024 annual meeting on May 9. Ballyβs will hold its annual meeting on May 16. Caesars has not yet scheduled its annual gathering.
Odds Long
The odds are presumably long that either of the three shareholder submissions will be taken up. Of the 682 shareholder proposals made between January and May 2023 with Russell 3000 companies, just 8% gained majority support and were adopted.
New Jersey Gov. Phil Murphy (D) is supportive of ending casino smoking in Atlantic City. He doubled down on that position this week by saying heβd sign such a bill should one arrive on his desk.
But pressed yesterday on his weekly radio program if he might take a more proactive approach and ask the legislature to get him a smoking ban measure, the governor said itβs a complicated topic.
There are legitimate concerns about the commercial viability of Atlantic City,β Murphy said in favor of allowing state lawmakers to work with the casino industry and smoking opponents to find a resolution. Β
United Auto Workers (UAW), which represents table game dealers in Atlantic City, filed a lawsuit against New Jersey last week challenging the stateβs 2006 Smoke-Free Air Act that allows casinos to designate 25% of their gaming floor for smoking.
