Study: Ban on smoking would cost Mohegan Sun jobs

William Sokolic

Mohegan Sun this week released a study showing that a smoking ban would result in significant losses in jobs and revenue to the casino and the state.

The study estimates the revenue decline at between 10 percent and 20 percent.

If revenue dropped 10 percent, Mohegan Sun could lose 990 jobs, with another 497 workers cut elsewhere, according to the study conducted by the Connecticut Economic Resources Center Inc. A 20 percent loss would eliminate almost 2,000 jobs in the casino and close to 1,000 from other sources. The impact on Foxwoods could double the job loss, the report states.

On top of that, because the revenue reduction would decrease the amount of slot money sent to Connecticut, the state would lay off between 312 and 629 workers.

A House bill to ban smoking on the casino floors by 2011 went to the Legislature’s Finance Committee Tuesday, the next step in what could be a long, protracted battle between supporters

and opponents of the prohibition.

“I urge you to review the report and consider the impact of the bill on the economy of the state, on the lives of the people we employ and do business with, and the state programs that rely on our annual contribution,” Mohegan Sun CEO Mitchell Etess wrote to the committee.

The tribal gaming authorities at Mohegan Sun and Foxwoods say the state cannot impose such rules on a sovereign nation, and may file suit should the bill pass.

Other highlights of the CERC study:

- Higher unemployment rate will exacerbate existing weak economic conditions.

- As much as $164 million in lost wages would reduce consumer spending.

- Reduced spending would lead to reduced sales tax collections.

- Lost wages would result in decreased income tax revenue.

- Lost jobs would mean increased demand for state services, such as unemployment

compensation and social services.

Just ‘speculation’

“You see those reports all the time. They’re bogus, the same old crying game,” said Stephanie Steinberg, chairman of the Colorado-based Smoke Free Gaming. “It’s all speculation.”

Opponents point to Atlantic City, N.J., Illinois and Delaware, however, and the impact smoking has had on gaming revenue.

“Doubters need only look to Illinois, where after the smoking ban, casinos saw a 17 percent decline in revenues, or to Delaware, where business dropped 19 percent,” Etess said.

After approving an ordinance limiting smoking to 25 percent of the casino floor, the Atlantic City Council approved a full ban last year. But gaming revenue tanked because of competition in Pennsylvania and the economic meltdown, so the industry convinced the city to delay implementation for at least a year.

Steinberg also said the implication of the CERC report is that smokers have more disposable income during a down economy than nonsmokers.

“That’s an outrageous point to make,” she said.

One element not faced in Atlantic City is the sovereignty issue from the tribes, an element state Attorney General Richard Blumenthal says won’t railroad the effort.

“Tribal sovereignty is not absolute,” Blumenthal said earlier this year.

The tribes disagree and are prepared to go to court to prove it.

“The shield of sovereignty is used for anything they do not want to do,” Steinberg said.

Norwich Bulletin