Thursday, March 23, 2017

Harrah's blames New Orleans nonsmoking laws for drop in local revenue

Posted By on Thu, Mar 23, 2017 at 6:58 PM

click to enlarge Harrah's New Orleans. - CREATIVE COMMONS/MOREBYLESS
  • CREATIVE COMMONS/MOREBYLESS
  • Harrah's New Orleans.

The smoking ban in New Orleans has driven Harrah’s customers away.

That was the argument March 21 from Caesar’s Entertainment, the global casino enterprise that owns Harrah’s New Orleans Casino & Hotel. Representatives testified to the state’s Riverboat Economic Development and Gaming Task Force a $70 million loss in gaming revenues since the parish implemented the ban two years ago.

Company president and CEO Mark Frissora, company South regional president Dan Real and task force chairman Ronnie Jones all acknowledged the correlation.

But 24 hours later, Cynthia Hallett, the president and CEO for Americans for Nonsmokers Rights, called those accusations “baseless.”

Real said Tuesday he does not expect the parish to repeal the ban, nor is the company actively lobbying against it. And Caesar’s Entertainment executive vice president of public affairs and communications Richard Broome said the company accepts the smoking ban.

“We don’t want to dwell on the smoking ban,” Broome said. “But it has had an impact on revenue. That’s incontestable.”

A recent report by Caesar’s Entertainment shows Harrah’s New Orleans’ gaming revenues were consistently between $336 million and $342 million from 2011 to 2014.
The best quarter of the casino’s history was in 2015, just before the ban was implemented. But right after, 2015 revenue dropped to $307 million. In 2016, it dropped even further to $273 million.

Their full-year forecast for the current year is even lower — $270 million.

The presentation does not provide revenues for years prior to 2011, but a 2015 report authored by the TFL shows that the New Orleans casino’s gross gaming revenues have been trending downward for the past decade, well before the ban was implemented two years ago.

Looking at revenues of other state casinos further hurt Caesar’s Entertainment’s case, says Hallett.

“[O]ther casinos throughout the state of Louisiana that are not required to be smoke-free have also seen revenues fluctuate. Clearly declines in revenue are not related to the smoke-free law.”

Indeed, the company blames competition for its decreased gaming revenues at its two other casinos, both in Bossier City. There is no smoking ban in Bossier Parish.
For those locations, the company blames Native American tribal casino expansion in neighboring Oklahom,  which, according to the chart, lost them $68 million between 2008 and 2009. The Bossier City locations now make $34 million less in gaming taxes than they did in 2008, with yearly fluctuations since then.

But Louisiana is not the only place that has seen a revenue drop.

The Caesar's report also shows that gaming revenue has been on a steady decline for the past fifteen years at its Las Vegas locations, which produce about 60 percent of the company’s total revenues. Its non-gaming revenue, in the meantime, has steadily gone up.

Louisiana Campaign for Tobacco-Free Living (TFL) director Tonia Moore agrees with Hallett that blaming monetary losses on the ban is unsubstantiated.

“We must keep in mind that despite all the negativity being touted by gaming industry executives, the health of all of our service industry employees, entertainers, residents and visitors is, and should always be, the most important factor here,” Moore wrote in an email Wednesday.
Broome said his company is concerned about the well-being of its employees, who are comfortable at the workplace. He added that, if employees want to work in a smoke-free environment, they can make the “appropriate choice.”

Harrah’s New Orleans, which opened in 1999, is one of the company’s five smoke-free casinos. Two others are in Illinois, one is in Baltimore and one is in Windsor, Ontario. The company owns 47 casinos worldwide.

Broome said the Illinois and Windsor casinos all saw at least a 15 percent decrease in revenue after the ban was implemented at their respective locations. The Baltimore casino always was smoke-free.
Location Details Harrah's Casino
1 Canal St.
Central Business District
New Orleans, LA
(504) 533-6000
Casino

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