Gaming czar: No new casinos if smoking ban succeeds
By Bill Donovan
Special to the Times
WINDOW ROCK, June 9, 2011
T he Navajo Nation Gaming Enterprise is threatening to halt its planned $100 million development of new casinos near Flagstaff and Farmington because of President Ben Shelly's push to include casinos in a ban on smoking in public facilities throughout the reservation.
Bob Winter, CEO of the gaming enterprise, said if Shelly succeeds, it would drive away high-stakes players, sharply reducing revenue and leading to job cuts at the tribe's two existing casinos.
While he's willing to work with the current administration on its concerns, Winter said the proposed ban would undo plans to have the casinos pay for themselves. He is convinced that a smoking ban would reduce casino profits to the point that "there would be no way that we would be able to service that debt."
Shelly's stance marks a policy reversal from his predecessor, Joe Shirley Jr. Shelly said tribal members, particularly casino workers, face a significant health threat from second-hand smoke, despite state-of-the-art ventilation equipment in the gaming facilities.
Protecting the health of its citizens must come first, he said.
The dispute stems from efforts now underway by Shelly to overcome Shirley's veto of 2008 legislation banning the use of commercial tobacco in public places on the Navajo Nation. The Council attempted but was not able to override the veto.
In late April, Shelly announced plans to issue an executive order to impose the ban, noting that it would not restrict the use of tobacco in traditional ceremonies.
The executive order, however, did not take effect because Attorney General Harrison Tsosie issued an opinion that a reservation-wide ban would exceed the president's authority. Shelly could impose a tobacco ban within the executive branch, but no further, the AG's office said.
Since then, Shelly has said he will submit legislation to the Navajo Nation Council during its upcoming summer session that would impose the ban.
Three years ago when the tribe was planning to build its first casino, Fire Rock, health advocates urged a tobacco ban but the council voted to allow smoking in certain areas at the casino.
The Council backed a full ban in 2008, but Shirley derailed it at the behest of the gaming enterprise.
Winter said the ban would create a competitive disadvantage for Navajo gaming because smoking is allowed at other tribal casinos near the Navajo Reservation.
"We wouldn't mind it if the smoking ban applied to all casinos in New Mexico and Arizona, but it would affect only us," he said.
When Navajo Nation got into gaming, other casinos saw their business drop off by as much as 50 percent - much of it from Navajos who could now gamble closer to home. Winter fears that "if the smoking ban is imposed, those people would go back to the other casinos."
Only one casino in New Mexico currently bans smoking, Taos Mountain Casino. However, casino manager Bob Brooker said it's difficult to say how much the ban has affected business because it's been in place since the casino opened 14 years ago.
Brooker assumes it has affected business "a little," noting that he was working at the casino in Cripple Creek, Colo., when a smoking ban was imposed there and it resulted in a loss of about 30 percent of its customers.
The Blackfeet Indian Nation recently imposed a smoking ban at its casino near Browning, Mont., but officials there said it will take a couple of more months to determine what effect it will have on business.
A recent study of Illinois casinos, where a smoking ban took effect three years ago, found that 24 percent of the state's gamblers are avoiding casinos because of the ban.
The study, performed by the University of Massachusetts Dartmouth Center for Policy Analysis, found that fuel cost seems to be a bigger issue, with 40 percent of gamblers reporting that they've skipped a visit to the casino because of the cost of gas.
Winter estimates that 20 percent of visitors to Fire Rock Navajo Casino smoke, but he predicted that the loss of these customers would decrease profits by 40 percent, based on studies showing that people who smoke tend to gamble more.
Winter said if the enterprise calls off its plans for additional casinos, it would cost the tribe more than $100 million annually in gaming profits, 1,000 permanent jobs and 1,500 construction jobs.
He estimated the loss in potential wages and benefits at $37.4 million.
But for Shelly, the health threat overshadows the money argument.
In a statement he released when first proposing the ban, Shelly said the ban was needed to save Navajo lives.
"As leaders we must create safer environments for our people," he said. "We do not want to expose our Navajo people to further unnecessary, health-related illnesses that can be caused by secondhand smoke."
Since then Shelly has received recognition from national and local public health advocates, and was praised by former U.S. Surgeon General Richard Carmona, who released a landmark study in 2006 on the health impact of secondhand smoke.
Winter cited the use of advanced ventilation technology at Fire Rock and Flowing Waters casinos, although claims that it would eliminate tobacco smoke outside the gaming area have proven to be overstated.
And Shelly has emphasized his concern for Navajos who work in the gaming areas, who are breathing secondhand smoke throughout their shifts, and non-smoking players. Nationally, around 50,000 deaths per year are attributed to secondhand smoke exposure.