2011-06-28 P-D: “Smoking ban didn’t hurt Illinois casinos, study says”

I conceived the idea of comparing smoke-free casinos in Illinois with nearby smoking-permitted casinos in Missouri in April, 2007, when it started to look like Illinois would pass a comprehensive statewide Smoke Free Air law which would include casinos. That possibility became closer to reality when the Smoke-Free Illinois Air Act was signed into law on July 23, 2007.

A group of researchers in the Center for Tobacco Policy Research, led by Douglas A. Luke, PhD, expressed interest and wrote grant proposals for a major study but the effort was stymied by a lack of funding.

Fortunately, MoGASP managed to obtain a small grant from a private foundation to pay for one researcher, Jenine K. Harris, PhD, to work on the project part-time. It has been a long and arduous undertaking for Dr. Harris. In reality, she devoted far more time to this project than was covered by MoGASP’s grant, and the other coauthors provided assistance without charge. All have PhDs except for me. They are Bobbi J. Carothers, Douglas Luke, Hiie Silmere, Timothy D. McBride, and Martin Pion, BSc., MoGASP president and author of this blog. Some background on the coauthors:

Jenine K. Harris has a PhD in Public Health Studies/Biostatistics. Her main job is teaching Biostatistics courses in the Public Health graduate program within the Brown School of Public Health, Washington University in St. Louis. She has an affiliation with the Center for Tobacco Policy Research, which is where she does most of her research, but her primary affiliation is the Brown School.

Bobbi J. Carothers works for the Center for Tobacco Policy Research full time as a data manager/analyst

Professor Douglas A. Luke is a leading researcher in the areas of health behavior, organizations, policy, and tobacco control. A top biostatistician and social science methodologist, Professor Luke has made significant contributions to the evaluation of public health programs, tobacco control and prevention policy, and the application of new methods to community health interventions.

Hiie Silmere has a PhD in Social Work and helped with much of the early data collection and writing of the introductory/background text

Tim McBride is an economist who works with the Brown School of Social Work and typically studies healthcare reform; he helped identify the economic variables, including the housing variable, for this study.

Garrett and Pakko are mentioned among the critical comments of this study on stltoday. Dr. Harris responded that Garrett and Pakko are professional economists, yet they did not include a measure of the housing market in their models; the housing market is a well-known driver of the Great Recession, as generally agreed upon by economists.

Dr. Harris also notes that, contrary to the comments on stltoday, she is NOT a social worker, nor a social work student.

Finally, Dr. Harris wanted to emphasize this important point:

“This report is NOT about revenue, and makes no claims about revenue: It is about admissions. We were driven by the arguments that casinos in Illinois would lose patrons to neighboring states. This is a point that David Nicklaus’s Post-Dispatch article may not have made clear.”

Personally, embarking on this effort it wasn’t evident at all that we would get this result since accepted wisdom has often suggested the reverse to be true, i.e. that making a casino smoke-free leads to a net loss in revenue. And I should emphasize that MoGASP was not, and never has been interested in funding research to reach a foregone conclusion.

Although there are plenty of pro-smoking comments on stltoday, I did notice some that were positive, like the following two:

frp706 said on: June 28, 2011, 2:53 pm
the only casino i go to is the casino queen and i live in west county.i will not go to any casino that has smoking, and if illinois changes it’s ban, i won’t go there either

BRIAN W said on: June 28, 2011, 2:42 pm
All I know is that the only casino in the St. Louis area that has gotten my money has been the Casino Queen, DUE to the smoking ban…I will not set foot in the smoke infested Lumiere or Rivercity casinoes….

Related stories:
         Illinois, other states consider smoking exemptions for casinos
         Bill to allow smoking in Illinois casinos passes House
         Illinois looks to squeeze more revenue from gambling




                                                      
Smoking ban didn’t hurt Illinois casinos, study says

BY DAVID NICKLAUS • dnicklaus@post-dispatch.com > 314-340-8213 | Posted: Tuesday, June 28, 2011 7:58 am | Comments (55 as of June 28, 2011, 7:00 pm)

Ever since Illinois implemented a smoking ban in January 2008, the state’s casinos have been lobbying for an exemption. As Kevin McDermott reported in March, the industry blames the ban for as much as $800 million in lost revenue.
         Now an academic study, funded in part by Missouri Group Against Smoking Pollution, says the ban didn’t cost them a cent. The article in the journal Tobacco Control carries a provocative title:
         Exempting casinos from the Smoke-free Illinois Act will not bring patrons back: They never left
         The study’s authors, led by Jenine K. Harris of Washington University’s George Warren Brown School of Social Work, analyze casino admissions in Illinois and four neighboring states* in 2007 and 2008, before and after the ban took effect. They control for economic conditions by including each state’s unemployment rate and building-permit activity in their equation.

*mogasp correction: Illinois casinos were compared with those in the following three, not four, neighboring states: Missouri, Iowa and Indiana.

         The economic part was important, the authors note, because a nationwide recession began in December 2007, almost simultaneously with the smoking ban. In the end, they end up blaming all of the casinos’ lost business on the recession:

Illinois experienced a steeper reession than neighbouring states ….

When economic conditions were accounted for, casino admissions in Illinois did not decline significantly relative to neighbouring states, nor did admissions increase in neighbouring states. Reductions reported in Illinois casinos are therefore not due to patrons leaving Illinois casinos for neighbouring states where they could smoke.

         The study contradicts a 2009 assessment by the Illinois Commission on Government Forecasting and Accountability, which concluded:

It appears that the indoor smoking ban and Illinois’ lack of gaming expansion in recent years (especially as compared to other states) is likely why other states have not struggled like Illinois.

         The commission didn’t take economic conditions into account.
         Given that Illinois is considering a major expansion of gambling to raise revenue, we probably haven’t heard the last word on this issue. The study may also be influential in Missouri, where St. Louis and St. Louis County currently have smoking bans that exempt casinos. And when St. Charles County Executive Steve Ehlmann recently blocked a smoking-ban referendum, he criticized a provision that would exempt Ameristar Casino from the proposed ban.

6 responses to “2011-06-28 P-D: “Smoking ban didn’t hurt Illinois casinos, study says”

  1. I notice that Mz Harris is a social worker and not an economist, why is it that when it comes to these studies smoke free organizations never hire experts in economics to head these studies? Do you have a link to the actual study? BTW your link is broken. I had to cut and past.
    http://www.stltoday.com/business/columns/david-nicklaus/article_9167c7d2-a143-11e0-8f59-001a4bcf6878.html#ixzz1QbZHbh9Z

    Marshall P Keith

    mogasp comment: Dr. Harris was misidentified as a social worker. In comments she sent me subsequently, she was at pains to correct this and I’ve pasted them on the mogasp blog.
    Sorry you had a link problem. I’ve just checked it and it’s working now. However, I’ve been updating this throughout the day so maybe it was broken earlier.

  2. Bill Hannegan

    Actually this study may not conflict that much with the study conducted by Pakko and Garret. Both find admissions not that much affected by the smoking ban. But Pakko and Garret also looked at revenues. That is where they say the loss occurred.

    mogasp comment: Attendance apparently didn’t fall but revenues did, due primarily to the dreadful economy. That’s what I understand and that seems to be what you’re saying too.

  3. Smokers are more often risk-takers than nonsmokers. Otherwise, they would not be willing to accept the risks associated with smoking. Thus, if you substitute nonsmoking patrons for smoking patrons, less gambling/patron will result. This study does not take that factor into account. It’s mearly a warm body count. Many IL casinos are located near it’s borders. Therefore IL casino revenue will not depend exclusively on the IL economy. Case in point— The Casino Queen draws patrons from the St. Louis regional economy—not exclusively from the economy of the East St. Louis region. Yet the Queen lost revenue from the pool of St. Louis regional gamblers, while River City, Luminere, Harrahs, and the Ameristar did not. This current study does not explain why that happened. Put another way, were it not for the ban, the Queen could have continued to attract more risk-taking, smoking, Missouri gamblers because the MO economy did not suffer as much as the IL economy.

  4. Tony Palazzolo

    I actually fail to see the point of this study. It was covered by the Fed study in some detail. Also as with any business its how the bottom line is affected. Does it matter how many people come and window shop its who makes a purchase. Even if Admissions double after a smoking ban revenue is down.

    mogasp comment: The study showed that, contrary to what I and others generally believed, casino admissions following the Illinois Smoke Free Air Act going into effect pretty much tracked between IL, MO, IA and IN. What changed evidently was the economy and people’s willingness to spend disposable income.

  5. mogasp comment: “Attendance apparently didn’t fall but revenues did, due primarily to the dreadful economy. That’s what I understand and that seems to be what you’re saying too.”

    It appears that this like most so called economic studies done by anti-smoking groups painfully avoid revenue which is the only real economic indicator. The study you showed in Wisconsin did similar. They made every excuse why they couldn’t. The Klein study in Minnesota did similar when the states own study using revenue told a different story.
    http://peoplesrepubmadison.wordpress.com/2011/01/13/smoking-ban-economics-cooking-the-numbers/

    People do not give up their vices durring economic hard times. They do not stay as long in places that do not cater to them.
    http://peoplesrepubmadison.wordpress.com/2011/04/25/sheriff-exposes-tobacco-control-lie/
    Marshall P Keith

  6. MoGasp, I left a fairly long critical comment over at the paper, but have a shorter one for here. You noted, “accepted wisdom has often suggested … making a casino smoke-free leads to a net loss in revenue.” and offer Harris’s study as contrary.

    YET… at the same time, you note that Harris felt it important to note that her report “is NOT about revenue, and makes no claims about revenue”

    How can you possibly NOT see the contradiction here? The local IRS office has NOOO interest in how often you walk in and out of their doors: they just want you to pay your taxes. Can you imagine going before a judge and saying “But I visited their offices every week!” as a defense against nonpayments?

    – MJM

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