Mohegan Sun CEO asks legislators to kill casino smoking ban bill

Hartford – The chief executive officer of Mohegan Sun urged state lawmakers Tuesday to kill a proposal that would compel the two tribally owned casinos in Connecticut to ban cigarette smoking by 2011, saying the resulting drop-off in business would cost the state millions in slot revenues and lost jobs.

“We are now competing directly with thousands of slot machines in neighboring states,” CEO Mitchell Etess wrote to the leaders and members of the legislature’s Finance Committee, which received the bill Tuesday morning, when it was referred from the House floor. “Patrons who smoke will take their business to other states, if a ban is approved in Connecticut, and revenues could drop up to 20 percent. There will be layoffs, and a cascading loss of business to us and our vendors.”

Etess pointed to the examples of Illinois and Delaware, where the imposition of smoking bans cut casino business by 17 percent and 19 percent respectively, and also backed his conclusions with a new analysis from the Connecticut Economic Resource Center.

The think tank’s study projects that business could fall by as much as 20 percent if a smoking ban is imposed on Mohegan Sun, which is operated by the Mohegan Tribe, and Foxwoods Resort Casino, operated by the Mashantucket Pequot Tribal Nation.

The group’s study, commissioned by Mohegan Sun, projected a widening ripple effect from business losses at the casino. A ban resulting in a 10 percent drop in business could cost nearly 1,000 casino jobs and almost 500 external jobs related to the casino’s operatons. A 20-percent drop would bring combined job losses of nearly 3,000, the study said.

That same 20 percent business hit could cut wages for the affected workers by $113 million, the study’s authors found.

And any drop in slot machine revenue is also a revenue loss to the cash-strapped state, which receives 25 percent of the slot machine take of each casino, under the gaming compacts between each tribe and the state government.

It is not the first warning from the tribe that passage of a smoking ban would cost Connecticut dearly. In March, Mohegan Tribal Chairman Bruce “Two Dogs” Bozsum wrote to Gov. M. Jodi Rell warning that the tribe would challenge any attempt to impose a smoking ban on the casino or state tribal lands as an “affront” to tribal sovereignty. Both Bozsum and Mohegan Attorney General Helga Woods also warned, ominously for those concerned about the state budget, that the tribe would place into escrow its scheduled slot revenue payments to the state in the event of a legal battle.

The two tribes are projected to pay nearly $400 million in slot revenues to the state in the coming fiscal year, a sum that lawmakers would be loath to forego as Connecticut struggles with projected annual deficits of at least $4 billion over the next two years.

But even if the smoking ban goes into effect, said Etess, its effects through the simple discouragement of smokers’ business at the casinos would be “catastrophic.”

The smoking ban bill, H.B. 5608, is awaiting action by the Finance Committee.