Casino Giants Face Investor Push for Smoke-Free Venues Amid Rising Support

43

Major investors are amplifying their calls for publicly traded casino operators to create smoke-free environments, and the voting results from the 2024 proxy season underscores this growing movement.

This proxy season was marked by vigorous efforts from large shareholders of Bally’s (NYSE: BALY), Boyd Gaming (NYSE: BYD), and Caesars Entertainment (NASDAQ: CZR) to push through smoke-free proposals. Bally’s investors’ proposal received support from 11.6% of voters at the regional casino operator’s annual meeting in May. Meanwhile, Boyd’s shareholders were even more embracing of the initiative, with the percentage of supportive votes nearly doubling to 22.5%.

Follow us on Google News! ✔️


Yet, it wasn’t all wins for the smoke-free lobby. A call to arms by some of Caesars investors, who demanded a report on the potential cost benefits of transitioning to all smoke-free properties, was shot down by the majority on Tuesday. Although the anti-smoking proposals were ultimately swept aside by the majority of investors, the notable percentage of supporting votes at Bally’s and Boyd, at least, suggests that shareholders could return with similar proposals, fired up and ready for battle, in 2025. As of Tuesday, Caesars had yet to share the percentages of the anti-smoking voting results.

Bally’s, Boyd, and Caesars, combined, operate over 70 casinos across the country. In sheer number of properties, Caesars holds the mantle as the largest casino operator in the US. The gambling titan already runs 10 gaming venues in seven states that are smoke-free due to regulations imposed by the respective state legislatures.

Casino operators, however, fret about the possible competitive disadvantages of adopting smoke-free policies. Popular sentiment among operators suggests that such a move could drive patrons, who also happen to be smokers, towards rival establishments. This fear is not without justification; Boyd expressed in its proxy statement that it “has previously experienced such negative impacts in markets subject to smoking bans”.

This narrative may be contradicted by certain evidence. For instance, a recent poll in Nevada—the largest casino market in the US—by the Nevada Tobacco Control and Smoke-free Coalition reported that nearly 60 percent of those surveyed support the idea of smoke-free casinos. Caesars, which reigns as the biggest operator in Nevada, acknowledged that implementing a blanket ban on smoking “may risk alienating our smoking customers”, but it already maintains smoking restrictions at its Nevada venues, especially in dining and restroom facilities.

Investors’ efforts to reduce or abolish smoking at associated companies’ venues represent a blending of philanthropy and pragmatism. The Surgeon General warns there are no plausible tactics for diluting the harmful effects of secondhand smoke. The heightened risk for casino employees—bartenders, cocktail servers, and dealers—exposed to secondhand smoke can lead to increased absenteeism due to health-related problems and even result in hefty litigation.

Costs also factor into the equation. The average price tag of employer-sponsored healthcare plans last year was close to $15,800 per employee, as per statistics from Mercer. For large corporations like casino operators, this number might be slightly less— $15,640 per insured worker— but still cumulatively significant given the vast number of employees in the industry.

Moreover, the economic impact of smoking for US employers is estimated at a staggering $200 billion annually. Some businesses even disallow smoking on company property while others, including some within the gaming industry, eschew offering health insurance to smoking employees. These are some of the factors that investors will likely exploit in their continued efforts to compel casino operators to adopt smoke-free policies.