Louisiana may ban smoking in casinos

The state legislature passed a bill through committee in both the House and Senate that would ban smoking in all public places. The law would take effect next April. The full houses of the legislature could look at the bill this week.

Originally, the bill called for a ban on smoking in bars, matching a ban on smoking in restaurants already in place. But an amendment included casinos.

“Our contacts view passage of the bill as unlikely and believe passage will be especially difficult in the House, where the bill barely made it out of committee last week,” Janney Montgomery Scott gaming analyst Brian McGill told investors.

A majority vote in both houses by the close of the legislative session on June 25 is needed for the bill to pass. News reports in Louisiana indicate that Gov. Bobby Jindal would not veto a bill that calls for a smoking ban in bars and casinos.

A smoking ban is viewed by Wall Street is a negative to the casino business. Smoking bans in casinos in Colorado and Illinois have been blamed for reduced gaming revenues in those markets.

McGill said the addition of casinos to the bill might be its death knell. Casino interests, he said, would fire up lobbying efforts to quash the measure.

McGill said Boyd Gaming, Penn National Gaming, and Pinnacle Entertainment would be negatively impacted by a smoking ban in Louisiana. Las Vegas-based Pinnacle generates 57 percent of its revenues from its Louisiana casinos.

“We estimate Pinnacle could see revenues decline by as much as 10 percent at its three Louisiana properties,” McGill said.

Passage of a smoking ban could send customers to casinos in Mississippi and a Louisiana Indian casino operated by the Alabama Coushatta tribe. The casino is not included in the bill.