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Casino revenue and the Illinois smoking ban

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Author Info
Thomas A. Garrett
Michael R. Pakko

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Abstract

Smoking was banned in all Illinois casinos in January 2008. We explore the effects that the smoking ban has had on Illinois casino revenue and attendance. Our empirical methodology extends and enhances that of previous literature in that we observe a natural experiment in comparing the performance of Illinois casinos with out-of-state casinos (no smoking ban) that share a market with Illinois casinos. Estimates suggest that revenue and admissions at Illinois casinos declined by more than 20 percent ($400 million) and 12 percent, respectively. Calculations reveal that casino tax revenue to state and local governments declined by approximately $200 million.

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Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2009-027.

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Date of creation: 2009
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Handle: RePEc:fip:fedlwp:2009-027

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Keywords: Gambling industry ; Tobacco industry ; Illinois;

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  1. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June. [Downloadable!] (restricted)
  2. Michael R. Pakko, 2008. "The economic impact of a smoking ban in Columbia, Missouri: an analysis of sales tax data for the first year," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Oct, pages 30-40. [Downloadable!]
  3. Scott Adams & Chad Cotti, 2007. "The Effect of Smoking Bans on Bars and Restaurants: An Analysis of Changes in Employment," Contributions to Economic Analysis & Policy, Berkeley Electronic Press, vol. 7(1), pages 1628-1628. [Downloadable!] (restricted)
  4. Robert K. Fleck & F. Andrew Hanssen, 2008. "Why Understanding Smoking Bans Is Important For Estimating Their Effects: California'S Restaurant Smoking Bans And Restaurant Sales," Economic Inquiry, Western Economic Association International, vol. 46(1), pages 60-76, 01. [Downloadable!] (restricted)
  5. J. Dunham & ML. Marlow, 2000. "Smoking laws and their differential effects on restaurants, bars, and taverns," Contemporary Economic Policy, Western Economic Association International, vol. 18(3), pages 326-333, 07. [Downloadable!] (restricted)
  6. Michael Pakko, 2008. "No smoking at the slot machines: the effect of a smoke-free law on Delaware gaming revenues," Applied Economics, Taylor and Francis Journals, vol. 40(14), pages 1769-1774. [Downloadable!] (restricted)
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This page was last updated on 2009-10-30.

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