Casino Investors Adopt Firm Stance Against Smoking
A growing number of prominent stockholders are requesting publicly-held casino enterprises to transfer their businesses to smoke-free areas, a recent proxy highlights the increased attempts.
During this proxy season, shareholders of Bally's (NYSE: BALY), Boyd Gaming (NYSE: BYD), and Caesars Entertainment (NASDAQ: CZR) have presented proposals asking these companies to consider smoke-free proposals. In May, Bally's annual meeting saw 11.6% of shareholders supporting this suggestion, while the figure jumped to 22.5% for Boyd investors.
On Tuesday, Caesars' investors rejected a demand by fellow shareholders for a report on the potential financial benefits of converting all their properties to smoke-free establishments. Even though Caesars, Bally's, and Boyd have refused the anti-smoking proposals submitted, the support from Bally's and Boyd's investors is significant due to their high percentages. These figures are substantial enough for shareholders to resubmit similar plans in 2025. The number of those opposed to the no-smoking vote at Caesars has not been disclosed.
As reported by Bloomberg Law, proposals receiving 5% or more of votes from shareholders can be submitted in the following year, increasing to 15% in the second year, and 25% in the third year.
Together, these three firms operate over 70 casinos throughout the United States. Caesars is the leading casino operator by the number of properties in the country. Caesars stated in its latest proxy statement that they currently manage 10 gaming venues across seven states without smoking due to the regulations in these regions.
Casino Operators Fear the Impact of Smoking Policies
The main reasoning for resisting smoking restrictions inside gaming venues is the possible migration of smokers to competitors' establishments.
Banning smoking across the board in a casino property could have substantial competitive impacts. Customers who wish to smoke while gambling might consider visiting a rival casino instead, claimed Boyd in their proxy statement. "We have previously encountered such issues in markets with smoking bans," they added.
Conversely, data from some markets contradict these concerns. In Nevada, where casinos are the most prevalent in the US, a recent survey conducted by the Nevada Tobacco Control and Smoke-free Coalition found that 59% of respondents support the state's casinos going smoke-free.
Caesars, the largest casino operator in Nevada, believes switching to a smoke-free environment might dissuade cigar-smoking customers, but they did admit that they introduced smoking restrictions in their Nevada-based properties. Those restrictions prohibit smoking in dining areas and restrooms.
The Reasons Behind Casino Investors' Efforts to Curb Smoking
The initiatives by investors to limit or eliminate smoking in casino properties can be attributed to a blend of humanitarian and economic impulses. Non-smokers suffer detrimental effects from secondhand smoke, making it difficult for customer-facing employees like bartenders, cocktail waitresses, and dealers to work in these environments. These workers might have to stay home from work more frequently due to health reasons, potentially exposing employers to lawsuits.
In addition, the expenses incurred by companies due to smoking are substantial. Last year, the average cost of employee health plans in the US was $15,800 per worker, according to Mercer; for large companies, such as gaming businesses, the figure was $15,640 per insured employee. However, if all employees will be covering their healthcare costs, the expense can add up significantly across a gaming corporation's entire workforce.
Smoking also has a significant cost implication, putting the US employers at a loss of nearly $200 billion annually, according to certain estimates. Some companies restrict their staff from smoking on company premises, and others in the gaming industry do not offer health insurance coverage to smokers. These issues are likely to become more prominent as investors persist in their push for smoke-free casinos.
Read also:
- Leverkusen claims victory in the cup, securing a double triumph.
- Alonso achieves a double victory after consuming a German brew.
- Does the SVolt factory in Saarland face stability issues?
- Furor surrounding Sylt scandal footage