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PAIN THEN GAIN: HOW ONE CASINO CHOSE TO GO SMOKE FREE

by Mark Gruetze

Mark Gruetze writes the weekly "Player's Advantage" gambling column for the Pittsburg Tribune-Review in Pennsylvania. His columns are online at http://triblive.com/aande/gambling. He has been a skilled recreational player for more than 30 years, focusing on blackjack, video poker, and poker. E-Mail questions or comments to players@triweb.com.

Note: This is a reprint of a column by Gruetze that appeared in his Player's Advantage column.

Robert Low offers succinct advice to any fellow casino owners thinking about making their operations smoke-free. "Get prepared for some pain!" says Low, who voluntarily banned smoking inside his Palace Resort Casino in Biloxi, Miss., in 2011. However, he adds that six years later the Palace is thriving and has recovered its initial losses. He remains happy with the decision. "We are providing a boutique hotel experience where gambling in a clean, smoke-free environment can be enjoyed by non-smokers."

General Manager Keith Crosby says a unique set of circumstances led Palace to embrace smoke-free gambling. Typically, casinos oppose smoking bans, fearing loss of revenue and jobs. Hurricane Katrina destroyed Palace's dockside casino in August 2005. The casino reopened four months later inside the hotel. A major expansion, including a new gaming floor, began in 2010. Crosby says that as the project neared completion, Low asked about the impact of declaring the new casino was smoke-free.

Crosby, who worked in Atlantic City when the haze of Saturday night tobacco smoke made it impossible to see across the casino floor, recalls telling him: "You don't pay me to lose 30 percent of the revenue."

He says Low, founder and president of Prime Trucking, looked beyond the money and instituted the ban to protect workers' health. "Our philosophy is that you take care of the folks who work here, and they'll take care of the guests," Crosby says. "We stuck to our guns. He's committed."

As an independent owner, Low had more freedom to make the call than operators of corporate casinos. "No one in a public company would dare risk it," Crosby says. "That's what it boils down to."

Palace even reimbursed employees for tips lost because of reduced traffic tied to the smoking ban. "Where the business could weather the impact, we were deeply concerned about the individual impact," he explains. "The tip rate is a barometer of how we're all doing. So we made some guarantees. You probably wouldn't get most companies willing to do that."

Prime Trucking, based in Springfield, Mo., and founded in 1970, is one of the country's largest trucking companies. Low, who says he smoked briefly while in the Marines said in an email interview that he's sensitive to smoking's impact.

"I want to provide our associates with a healthy environment and help them improve their health," he says. "Also, I personally love gambling and visiting casinos, but have never appreciated the way my clothes smell after a visit. ... Non-smokers need a place to gamble without being subjected to smoke."

Neither Low nor Crosby would specify how much the casino lost in the early stages of the ban, and Mississippi does not report financial results for individual casinos. Both executives say Palace has recovered from the dip.

Mississippi Gaming Commission records show that in March 2011, shortly before the expanded facility opened, Palace had 614 employees, including 74 in the hotel, and the casino had 773 slot machines and 15 table games. At the end of February 2017, Palace had 698 employees, including 88 in the hotel, with 862 slots and 26 table games.

Biloxi has eight casinos, and Palace, which boasts an 18-hole golf course and a spa, is among the smaller ones. Crosby says it market share is now "where we felt it always should be," but the process took three years.

Low says comparisons of the two Palaces are difficult. "It was a different casino before we went smoke-free. Yes, revenue did drop, but we have recovered it."

Crosby acknowledges that the smoke-free policy alienates some customers, and the three-year recovery period proves the industry maxim that it's harder to lure customers away from a competitor than it is to run them off. "If you carve out a pre-formed social group - it could be left-handed people - it's going to have an impact."

He and Low see a shift in public attitudes toward smoking in public spaces. "The younger person walks in the door assuming you can't smoke, and the older person walks in assuming you can," Crosby says. "Culturally, it's that different."

Crosby notes a side benefit to being smoke-free: the furniture and fixtures stay fresh and last longer without developing that "casino smell." "You don't really appreciate the impact that allowing smoking has on the facility until you don't allow it."

More Tips from Gruetze

Rivers expands VP offerings

Rivers Casino on Pittsburgh's North Shore is beefing up its video poker offerings with a bank of multi-denomination games offering progressive jackpots as well as additional machines.

The expansion resulted from player feedback and industry trends, according to a statement from André Barnabei, vice president of slot operations. The first phase of a multi-step "video poker spot" project included adding the progressives as well as new video poker versions such as Hot Roll and Triple Reel plus more machines of existing favorites such as Ultimate X and Double Super Times Pay. The machines are located throughout the main floor and in the high limit room. Rivers now has more than 200 video poker options. Overall, the casino has 2,934 slots.

Pay tables indicate maximum video poker payout rates below 99 percent with expert play. While below the threshold for video poker pros, that's better than the 90 percent rate for traditional slots, which rely purely on luck.

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