Smoking ban casts pall over tavern atmosphere
BY RAY HAGAR • rhagar@rgj.com • April 6, 2008
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Paul Sonner, owner of the Bully's Sports Bar & Grill locations in Northern Nevada, saw that the Nevada Clean Indoor Air Act was hurting his business.
The law, approved by Nevada voters in the 2006 general election, banned smoking in most indoor public places except for casino floors and bars that did not serve food.
The law hurt Bully's and many similar businesses, Sonner said. If bars or taverns served food, they could not allow smoking.
So, smoking customers no longer patronized their businesses to have a beer, cigarette and perhaps a hamburger while playing the poker machines and watching sports on a big-screen TV.
"There are a lot of people who went out of business," Sonner said. "We actually laid people off for the first time in our history, and I've been open since 1994."
Other tavern owners tell the same story. Revenues for taverns, bars, grocery stores and drug stores have plummeted since the Nevada Clean Indoor Air Act became state law, said Steve Deschamps, general manager and chief financial officer for United Coin Machine Company, a Las Vegas slot route operator with many clients in Northern Nevada.
What's more, the slot play at grocery, convenience and drug stores have dropped 20 percent since the law was passed, Deschamps said.
Some businesses, as Sonner noted, have not been able to hang on. Others, however, have found a way to cope and say they are hoping lawmakers will some day rewrite the law to make it more equitable.
Getting around the law
Sonner, meanwhile, has come up with a unique -- yet expensive -- way to obey the law and get around it at the same time.
Sonner opened three "Smokin' Bully's" locations near his establishments.
So now, if his customers want to eat, drink and smoke, they can order food in the established Bully's, and the food will be served to them in the Smokin' Bully's in take-out containers.
"You can now go in there, and we can deliver food to you," Sonner said about his Smokin' Bully's. "You can sit at the bar, drink, play the slots or play pool and watch the big-screen TV. And you can order food, and we'll deliver it.
"The (Washoe County) Health Department has signed off on it," Sonner said. "We deliver it in a to-go container, and you have to eat out of that but we'll provide the silverware."
The Smokin' Bully's location cost Sonner about $150,000 each, but he plans to build four more in 2008.
Other taverns have thought of similar ways to legally beat the ban, such as making half their taverns non-smoking and the other half smoking and walling off the two sections.
One of the new Smokin' Bully's will take the concepts a step
further.
A new Bully's Bar & Grill on Steamboat Parkway in the RC Willey shopping center will consist of one very long bar with video poker machines. Half of the bar, the Smokin' Bully's side, will be glassed-in and separate. Each side will have its own door and take-out orders will be brought over from the non-smoking to the smoking side on request.
"We want everyone to enjoy the Bully's product, and we have figured out a way to succeed in spite of the restrictions of the Nevada Clan Indoor Air Act," Sonner said.
Critical of the law
Sonner, however, remains highly critical of the law since it treats tavern owners and others who rely on revenue for gaming machines, such as grocery-store and drug-store operators, differently than casino operators.
"It has become such an unfair playing field, and I don't think that was the spirit of the law," Sonner said. "They didn't put anything in the law that would check the economics of this, like how much it affects people. They certainly put the big guys on a different playing field than the small guys."
Although slot revenues for tavern and bar owners have dropped 10 percent to 20
percent, Deschamps said the law went into effect roughly at the time the subprime mortgage crisis triggered a statewide economic slide.
"It is hard to separate the impact of smoking from the impact of an extremely poor performing economy," Deschamps said. "The amount of discretionary income that people have to do gaming has gone down substantially with the mortgage crisis, higher utility bills and higher gas bills."
Yet, Deschamps is reluctant to give firm numbers on the impact of the smoking ban.
"In my mind, I allocate roughly half of the decline to the smoking initiative and half of the decline to the overall economy and lesser discretionary income," he said. "But frankly, that's just a guess."
Time to change the law?
Many tavern owners would like to see the law changed to include no smoking on casino floors. The law allows patrons to eat deli sandwiches or take-out meals in smoking areas of casino floors.
"Having a clean air act that treats all businesses the same would seem to make more sense to us and is similar to what has been put into play in other states," Deschamps said.
"We certainly believe that, in this day and age, that you are not going to repeal the smoking ban. But there seems to be a question of it being more broadly implemented."
Nothing could be done in the 2008 election or 2009 Legislature to change the law, said Michael Hackett, the 2006 election cycle's campaign manager of the Nevada Clean Indoor Air Act.
"Since it was an initiative that essentially changed the statute, essentially there is a three-year hands-off period," Hackett said.
A provision of the law provides for immediate recourse if tavern owners feel they have been unfairly treated, Hackett said.
"If they feel there is a discrepancy with their business and these gaming revenues are a main source of their overall revenues, there is nothing to prevent them from going to their local government, most likely the city council, and say that we need to tighten these laws," Hackett said. "That was one of the key provisions of the Nevada Clean Indoor Air Act that allows for local control. If they feel they are at the short end of the stick as far as gaming revenue, then they can take that issue right to their local government and get it straightened out."
Bans hurt casinos
Many states have recently passed laws that ban smoking on casinos floors, such as Illinois, Washington and Colorado.
In Atlantic City, N.J., a compromise law bans smoking on
75 percent of the casino floor. The 25 percent that allows smoking must be segregated from the rest of he casinos, according to the law.
Some Nevada casino operators and resort executives question if a smoking ban on casino floors would be prudent in a state the relies so heavily on the casino industry for jobs and tax revenue.
"If that happened, it would put a lot of people out of work," said Casey Sullivan of the
Tamarack Junction in south Reno.
Consider Colorado, for example:
Since the state extended its indoor smoking ban to its 40 casinos on Jan. 1, casino revenues dropped drastically, according to Denver's Rocky Mountain News.
February statistics show casino revenue dropping to
$57.9 million, down 10.1 percent compared with the same month last year.
In January, proceeds fell to $56.7 million, off 3.6 percent from a year ago.
"We've had an impact from the smoking ban, but we know it's not just smoking," Heather Leigh, spokeswoman for the Ameristar Casino in Black Hawk, told the Rocky Mountain News. "We know part of it is weather. We are 40 minutes from Denver, so it could be gas prices. And people have been talking about recession."
The Casino Queen, a new
$92 million resort which opened last summer on the East St. Louis riverfront in Illinois, had monthly revenues of about $18 million to $17 million before the smoking ban in all public places became law on Jan. 1. Since then, monthly revenues have dropped about $3.5 million a month, according to the Belleville (Ill.) News-Democrat.
"It's been devastating," casino manager Tom Monaghan told the News-Democrat, saying he worries his customers will go across the river to Missouri casinos where gamblers may smoke.
"It was like flipping a switch, with the new smoking bill," Monaghan told the News-Democrat.
Threat to the state economy?
A smoking ban on casino floors also could devastate Nevada, said Bill Bible, executive director of he Nevada Resort Association.
"In our case, the provision that excepts casinos and casino floors from the smoking provision was crafted by the proponents of the Nevada Clean Indoor Air Act and that was the lung association, the cancer society and the heart association," Bible said. "Those three entities apparently were concerned about the potential economic impact on casinos in Nevada so they felt it was appropriate that casinos have that exemption."
Nevada's economic engine -- the Las Vegas Strip -- attracts gamblers nationwide and worldwide and a smoking ban on Strip casinos could especially be dangerous for the state's economy, Bible said.
"A lot of our casino business comes from out of state and out of country where people have a tradition of engaging in smoking activities in a variety of venues, including casinos," Bible said. "So those three groups felt it was an appropriate exception of the act."
There is a key difference between casino floors and taverns, grocery stores and convenience stores that makes Nevada's law fair, Bible said.
"I realize that the tavern owners have complained about it as well as the convenience stores and the route. But our (casino) venues are adult venues and are geared toward having adults on casino floors and that is enforced by the (Nevada Gaming) Control Board. Minors can't loiter on the premises, which is certainly different than a grocery store, convenience store and some of these neighborhood bars."
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