Anti-smoking activists up the ante
They hope to play their cards right with casino shareholders
ATLANTIC CITY, N.J.— Add investors to the list of people that opponents of smoking in casinos are enlisting in hopes of banning the practice.
A national nonsmoking group and a Michigan health system have placed shareholder proposals on the agenda of annual meetings for two major gambling companies and are likely to add a third.
The measures ask the companies to study potential financial benefits of going smoke-free at their casino properties.
And while it remains to be seen whether the proposals will be approved by investors, the move represents yet another aspect of an effort by casino smoking foes to leave no stone unturned in their drive to end smoking in gambling halls. In New Jersey, that has included pushing lawmakers to legislate a ban, and filing a lawsuit in state court to overturn an indoor smoking law that exempts casinos.
Proposals from Trinity Health, a Michigan-based health care system, and the American Nonsmokers’ Rights Foundation will be voted on by shareholders of Boyd Gaming and Bally’s Corp. during their annual meetings this year. And an identical measure has been submitted to Caesars Entertainment, which has not yet announced the date of its annual meeting.
“Many shareholders will be surprised to learn that these casino companies still allow indoor smoking, even in the year 2024, and that the policy is harming the very workers who were instrumental in the companies generating billions of dollars in revenue in 2023,” said Cynthia Hallett, president of the nonsmokers group. “If casinos will not do the right thing on their own, then we will continue to explore every avenue to protect the well-being of workers and patrons.”
Whether to ban smoking is one of the most controversial issues not only in Atlantic City casinos, but also in other states where workers have expressed concern about secondhand smoke, including Rhode Island, Pennsylvania, Kansas and Virginia.
“We risk our lives every day just by going to work,” said Pete Naccarelli, a longtime Borgata dealer and a leader of Casino Employees Against Smoking Effects, a group of workers pushing to end smoking at Atlantic City’s nine casinos. “It’s unacceptable, and long past
time for casino corporations to end this outdated business practice. The least the casinos can do is study the impact of indoor smoking.”
Historically, shareholder proposals face long odds of being approved and implemented. A study last month by the Conference Board found that 913 shareholder proposals were filed in 2023, and 71% were voted on, receiving an average support of 23%.
The gambling companies oppose smoking bans and the shareholder measures calling for a study. Bally’s, Boyd and Caesars claimed the proposals involve ordinary business matters best decided by company management, and that the requests seek to micromanage the company.
But the U.S. Securities and Exchange Commission, ruling on objections from Boyd, rejected those claims and refused to allow the company to quash the shareholder proposals. Because the same proposal was submitted to all three companies, the agency’s ruling is likely to affect each of them.
In recommending a vote against the proposal, Bally’s called it “unwarranted and unreasonable.” It supported the repeal of a smoking ban last year in Shreveport.
“The company is committed to providing a first-class entertainment experience to both its smoking and non-smoking customers, and compliance with local smoking laws ensures that customers have access to comparable (gambling) experiences with all other casinos in each market,” Bally’s wrote.
In its own note to shareholders, Boyd Gaming likewise urges them to vote against it.
“The proposal asks for a report on implementing a smoke-free policy, but we believe this proposal is the first step toward forcing our company to unilaterally adopt such a policy, regardless of the actions of our competitors,” it wrote. It added that Boyd has already been harmed by smoking bans in its Midwest and Southern markets, and would put itself at a competitive disadvantage by banning smoking.
Caesars Entertainment did not respond to requests for comment Tuesday and Wednesday. But in a letter to the U.S. Securities and Exchange Commission, Caesars said the health of employees and customers is important. It added that smoking policy for its properties involves numerous factors including customer preferences, local regulations and the policies of competitors.