LOCAL AND STATEWIDE SMOKE-FREE LAWS IN NEBRASKA: THE EFFECTS ON KENO ESTABLISHMENTS

I. INTRODUCTION A dramatic shift from smoke-friendly to smoke-free environments has occurred in the United States since the 1980s due to the enactment of local and statewide smoking bans. As of April 2011, 23 states and more than 450 municipalities have a law in effect that requires workplaces, restaurants, and freestanding bars to be 100% smoke free (American Nonsmokers' Rights Foundation 2011). The impetus for smoke-free environments came in 1964 when the first Surgeon General Report, Smoking and Health, was released: it held smoking responsible for a 70% increase in the mortality rate of smokers over non-smokers (National Institutes of Health, Department of Health & Human Services, U.S. National Library of Medicine 2011a). Subsequent Surgeon General Reports continued to report on the effect of smoking on smokers, as well as on non-smokers, thus transforming the issue of smoking from one of individual and consumer choice to one of public health. It was evidence of the latter effect that set in motion the regulatory movement against second-hand smoke (National Institutes of Health, Department of Health & Human Services, U.S. National Library of Medicine 2011b). Proponents of smoke-free environments cite public health benefits and argue there is only mixed evidence that smoke-free laws reduce aggregate economic activity in restaurants and bars (Scollo and Lal 2008). Other researchers, however, point out that indoor smoke does not constitute an externality; and that the impact of smoke-free laws on establishment sales and profits depends on establishment characteristics, especially the share of patrons who are smokers (Dunham and Marlow 2000, 2003). Pakko (2008b) finds that, prior to the enactment of smoke-free laws in Columbus, Missouri, only 18% of "eating places only" establishments permitted indoor smoking, whereas 56% of "eating and drinking places" and 71% of "drinking places--alcoholic beverages" establishments permitted indoor smoking. (1) He, therefore, disaggregates the data by restaurant and bar subsector to examine if the Columbia, Missouri smoking ban had different effects on restaurants and bars and finds the effect on establishment revenue is increasingly negative for those establishments that are more likely to be frequented by smokers. (2) Adams and Cotti (2007) also find evidence that smoking bans harm bar activity more than restaurant activity. (3) Given smoking is as much a part of the atmosphere or culture of gaming venues as it is of bars, in the absence of smoke-free laws, we would expect the proportion of gaming venues with smoke-friendly policies to be similar, if not higher, than those observed in bars. Hence, research on the effect of smoking bans in the gaming sector is relevant for sorting out the differential impacts of smoking bans within the sectors of the hospitality industry. In more recent years, gaming venues also have been required to go smoke free. As of April 2011, 16 states have enacted 100% smoke-free laws for state regulated gaming (American Nonsmokers' Rights Foundation 2011). Gaming venues include casinos, racinos, (4) racetracks, and establishments where bingo and keno are played, as well as where video lottery terminals and pull tabs are located. The gaming literature is relatively sparse, focusing on only racino gaming in Delaware and casino gaming in Illinois, and overwhelmingly finds a negative impact of smoking bans (Garrett and Pakko 2009; Pakko 2006, 2008a; Thalheimer and Ali 2008). (5) The purpose of this article is to examine the effect of a smoking ban on keno gaming in Nebraska. Keno is a lottery or bingo style game in which a player first selects up to 20 of 80 numbers on a paper ticket. Then, from the same pool of 80 numbers, a selection device randomly selects up to 20 numbers. The winners are determined by how many of the numbers selected on the ticket match the randomly drawn numbers. Nebraska is a state that offers keno gaming in restaurants and bars, and in which municipal and statewide smoking bans were introduced at different times. …