Surprise! Smoking Bans Have Unintended Consequences

Things are different outside of New York. A fun Friday night might just be a session of smoking and playing video poker at a bar (in States like South Dakota, Oregon and Montana). And video poker (also known as video lotto) is a big deal in  states like these – bringing in hundreds of millions of dollars of annual revenue for these states.

Well, a smoking ban for South Dakota bars went into effect on Nov. 2, and now, some lawmakers are already talking about modifying the ban. Since the smoking bans went into effect, people are doing much less of what they used to. The State’s video lottery revenue is down more than $2.3 million – or 19.2 percent – in the first three weeks after the ban went into effect (compared with the same period last year).

The ban has already caused some bars to close. Some bars are even going as far as building outdoor patios to accommodate smokers – hoping that the designated space will encourage people to stay.

In Montana, a smoking ban that began in Oct. 1, 2009, caused an 18 percent drop ($12 million) that has remained steady since, said Rick Ask, administrator of the state’s Gambling Control Division. “There was an expectation that there would be a drop, and then some expectation that we would see some of it come back,” Ask said. But even regular customers  step outside bars or casinos to smoke; then they don’t go back in, bar owners report. That explains why the revenue streams aren’t coming back either.

Robert F. Brown, of Montana, says that the only thing he has quit is spending. “It has curtailed our social life tremendously,” Brown, 73, said on behalf of him and his wife. “We’d go out every Friday and Saturday night to our local neighborhood bar and spend $40 or $50. Now, we don’t do it nearly as much.”

There’s a lesson in this for all states wishing to restrict smoking further or to impose more oppressive taxes: Smokers are important consumers and voters too – if states restrict our ability to smoke, smokers may simply stop spending. Those that stand to lose are the states themselves and more importantly small businesses (the B&M shops).

Image by Aaron Jacobs via Flickr using Creative Commons License

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