Mark W. Hamilton, member of the Mohegan Tribal Council and former vice president of the Mohegan Sun unveiled a research demonstrating that implementing a ban on indoor smoking in tribe casinos would lead to dramatic losses in revenues what would inevitably result in job cuts.
Researches compared the consequences of smoking ban in casinos implemented by other states and came to the conclusion that the revenue would be reduced by 10-20 percent.
According to the study performed by Employee Benefit Research institute and Connecticut Economic Research Center, in case profits tumble by 10 percent, Mohegan Sun Casino would have nothing to do than cut more than 500 jobs. If profits fell by 20 percent Mohegan Sun would be forced to eliminate up to 1,000 work places directly from the casino and another 1,000 jobs from adjacent businesses. Moreover, the job cuts would be more than doubled when Foxwoods Resort Casino, another giant casino located in Connecticut and operated by Indian tribe would start dismissing workers.
In addition to that, the revenue drop would result in the drop of revenue collected by the Connecticut Treasury and force the cash-strapped State to seek another source of money to fill the budget holes.
The research was published in a response to the proposal of Connecticut Public Health authorities to ban indoor smoking in casinos by 2011. Last week, the proposal went to the State Ways and Means Committee for consideration that could lead to a long-term and adamant struggle between opponents and supporters of the ban.
In a letter to the Ways and Means Committee Mitchell Etess, CEO of Mohegan Sun asked lawmakers to examine the research results and estimate the effect of the bill implementation on the revenues and therefore the livelihoods of people employed by casinos and the programs that funded with the help of the gambling revenues.
At the same time, Mohegan and Mashantucket Pequot tribal leaders declared that the state of Connecticut has no right to impose the ban since it would infringe tribal sovereignty. They even consider filing a lawsuit in case the bill is approved.
Among the results of the Connecticut Economic Research Center study, were:
- The job cuts would contribute to the raise in unemployment rate that in its turn will prompt to aggravating already poor economic conditions.
- Annual $165 million in lost salaries would decrease consumer expenditures.
- The decreased expenditures would result in tax collection losses.
- Lost work places would lead to increased expenses on compensation for unemployment and other state payments.
However, representatives of numerous health groups stated that similar reports have been issued each time the smoking ban proposals appear, and named the report ‘speculation and cheating.’
Smoking ban opponents cite the precedents of Atlantic City, Illinois and Delaware, pointing to significant loss of revenue after smoking was banned.
After passing the legislation to restrict smoking to only 25 percent of the local casinos, the Atlantic City authorities imposed a citywide ban in 2008. However, the gambling revenues tumbled so dramatically because of economic downturn and rivalry of the Pennsylvania Casinos that City Council was forced to ease the ban under the pressure of the local casino owners.
Yet, there is one more issue that distinguishes Connecticut from Atlantic City that is the sovereignty of the tribes that however, would not be essential according to Richard Blumenthal, Connecticut Attorney General as he named the tribal sovereignty relative.
The tribal leaders are of another opinion and consider going to Supreme Court to defend their rights.