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St. Louis Fed: No Ifs, Ands or Butts, Smoking Ban Hurt Revenues

By   /   July 23, 2010  /   4 Comments

Tom Garrett, a St. Louis Fed economist, says there’s no doubt that Illinois casinos lost revenue after the state implemented a smoking ban in 2008.

Kansas casinos are exempted from the smoking ban because casino proponents don’t want to experience revenue losses. Ban proponents say privately operated bars will not lose revenue due to the ban. Garrett says studies that show a positive impact of smoking bans on bar and restaurant revenue are not rigorous and their results are not convincing. The availability of specific data on casinos  allowed a more detailed evaluation of the ban’s impact.

Why should people care? Casinos are promoted as a way to supplement state revenues but a $200 million loss in Illinois revenues isn’t a supplement. As revenues go down, Garrett warns, some casino employees will lose their jobs.

Garrett’s article is available in the July 2009 issue of the Regional Economist here.

Casino Revenue Growth

SOURCE: State gaming boards of Illinois, Indiana, Iowa and Missouri.

Casino Revenue Growth

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Paul Soutar