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Through direct mail, Harrah's surveyed its existing smoker and non-smoker customer base to find that many - Lima did not
specify - of its smokers had plans to move their patronage to Indiana casinos.
"We did lose customers," he said. "We're working both angles with our marketing messages to retain as many smokers as we
can and to bring in as many non-smokers as possible. A key part of our non-smoker marketing messaging is focused on our
non-gaming amenities including our three restaurants, along with our live weekend entertainment. We're marketing to reach
the casual gamer as well as the regulars."
Lima's concerns that Harrah's is losing patrons across state lines to Indiana is given credence by statistics from Tom
Swoik, executive director of the Illinois Casino Gaming Association. According to ICGA stats, Northern Indiana casinos are
collectively down in revenues only 7 to 8 percent since Jan. 1 compared to Northern Illinois casinos whose revenues are down
nearly 20 percent for the same period.
"I think any marketing we can do to increase revenues and try to compensate for the losses from the Jan. 1 smoking ban
legislation is a really good thing," Swoik said.
As part of its commitment to hold onto the majority of its clients, the smokers, Harrah's built a separate,
climate-controlled structure with permeable walls, attached off of the gaming floor, dubbed the Smokers' Club.
Par-A-Dice Hotel & Casino in East Peoria is another upstate casino that is proactively seeking out the non-smoking gamer.
Spokesman David Strow says the casino, owned by parent company Boyd Gaming Corp., faces the same balancing act that the
other Illinois casinos do - accommodating both the smoker and the non-smoker.
"On Jan. 1, we opened up climate-controlled, multi-decked smoking shelters outside each level of our casino," Strow said.
"Accommodating smokers to the best of our abilities, while complying with the new state law, was our goal."
But the feedback Par-A-Dice started receiving shortly thereafter, Strow said, was as much of a surprise as from whom it
came.
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"A significant number of our non-smokers commented favorably on the improved air quality within the casino," he said.
"This really got us thinking about reintroducing Par-A-Dice to our existing customers, both smokers and non-smokers, and our
marketing campaign to 'Re-experience Par-A-Dice' was born. It surprised a lot of us to get the positive feedback on the air
quality from the smokers, too. You'd expect to hear it from the non-smoking group."
Tom Monaghan, general manager of the Casino Queen Hotel and Casino in East St. Louis, says at this time the casino has no
plans to market to non-smokers. But the casino has made significant capital investment within the past year to ensure
improved air quality.
The first, according to Monaghan, was to spend $3.5 million above and beyond the required level of heating, ventilating
and air conditioning system that operates in the newly renovated Queen, which opened in August 2007. The second air
quality-specific investment, totaling more than $700,000, Monaghan said, was the construction of elaborate smoking lounges
that opened Jan. 1.
"As of now, we've not done any marketing to that group [of non-smokers]," he said. "We're never going to please everyone
when a bill like that is passed. But we're all about taking care of our customers whether they're smokers or non-smokers,
and making sure we give them the best experience possible."
Michael Pakko, research officer and economist with the St. Louis Federal Reserve Bank, has studied the effects of
statewide smoking bans. In his study of the state of Delaware, Pakko says the state initially fought its ban when the law
took effect in 2002, but ultimately its casinos incorporated the smoke-free concept into their marketing efforts.
"From an economic theory standpoint, casinos have always had a choice to market their facilities - or portions thereof -
as smoke-free," said Pakko, "but from a business standpoint many of them chose not to. And that's understandable, because
from my studies, by and large the overall economic impact of smoking bans on casinos is negative."
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