Those who promote smoking bans are always quick to say that smoking bans are good for the economy and don't hurt businesses. Their studies show that they are correct. What they fail to mention is that their studies include many businesses that haven't allowed smoking for years. Of course smoking bans will likely have a postive impact on these businesses and paint an overall rosy picture. However, the small corner bar, with 70% of its customers being smokers, suffers greatly from a smoking ban.
Charities Hurt by Smoking Bans
In March of 2008,
a study was done by the Minnesota Gambling Control Board, and this study clearly indicates the negative effect of the Minnesota smoking ban on charitable gambling. According to the study, in October through Decmber 2007, gross receipts from charitable gambling were down a whopping
12.8% from the same period in 2006.
This represents the most significant drop since charitable gambling was regulated in 1985.
It must be noted that charitable gambling has been in decline over the last several years, but based upon many factors, the study reports, "The state-wide ban accounts for 7.5 to 8.0 percentage points of the 12.8 percent state-wide reduction in the fourth quarter of 2007." The study also concluded that, "Although the business cycle and gasoline prices each have large and significant impacts on legalized gambling, smoking bans have a strong independent impact. The unusually large decline in gross receipts following the local smoking bans (where they affected bars) was not just a result of simultaneous changes in other economic variables" and that "Smoking bans appear to cause a permanent drop in lawful gambling. The lack of a rebound in gross receipts in St. Paul is similar to what has been seen in other cities with smoking bans in bars."
What's interesting, however, is that in the "recommendations" section of the study, there is no mention of modifying or repealing the Minnesota statewide smoking ban, in spite of the fact the study clearly indicates that repealing the smoking ban would result in an increase of charitable gambling receipts.
Taverns Hurt by Smoking Bans
There have been no formal studies of taverns' revenues after the smoking ban. However, BtBMN does have the following testimony from small bar owners:
Nine Mile Bar is located in Grand Rapids, MN. It was established in 1893 and the current owner (Kathy) is a third generation bar owner. Since the smoking ban was enacted her profits have been cut in half (~30,000 down to ~15,000). She has had to cut hours of employees and lay some off. Her one employee of 28 years was cut from 26 hours to 10 hours a week. Her cook went from 4 days a week down to 2 days a week. She had to lay off both of her waitresses and now has no waitresses. She also laid off her janitor. Her 70 year old mom and 16 year old son volunteer to help...they work for tips only. One of her distributors (Dick Distributing-Bud) said that liquor sales to bars are down 50% in the area but that the White Oak Casino (Deer River) has tripled their liquor sales since Oct. 1. The Coke & Pepsi sales reps no longer come around because they got laid off...all Kathy' s orders must be phoned in now. Another one of Kathy's distributors (Miller rep) said they used to have 2 trucks each carrying 700 cases a beer deliver to the area pre-ban and now they only have 1 truck carrying 100-200 cases of beer.
In Kathy's words, "I have been around a long time but I have never seen anything like this".
-- Kathy, Nine Mile Bar, Grand Rapids
"We are very similar to a “Cheers”. Our daytime bartender has been there for 10 years; she is 65 years old single woman and has been bartending for 30 years. She relies on her tips for her phone bill, rent and food. We had to cut her hours because lack of business. Our other bartender is a single mom of 2 little girls, and while her hours are still the same, her tips have dropped $150.00 per week. I am a mother of a 17 month old girl, and my tips have dropped $100.00 per week. I count on my tips to buy diapers, food, clothes and my mortgage. We have all been affected by the ban. We have had to open later, cut hours and if we aren’t busy at night, we have to close. Our business has gone down by a third since the ban took effect. We also have charitable gambling in our bar. The organization is the Vietnam Vets of America. They usually every year give away 3 scholarships to students in the area and they have had to cut back to only 2 now. Our alcohol and liquor sales have dramatically decreased. Our sales tax is at the lowest it’s ever been. Our charitable gambling isn’t donating as much anymore. This has really hurt our business and we hope that you can see that the ban has affected so many people and it’s hard..."
-- Crystal Bentson, Buggs Bar, South Saint Paul
"This is just a short summary of the losses my business has had since the smoking ban went into effect. Since October 1st we are down at least 50% a month. The pull tabs are down 80%. I have owned the Bird's Nest for 20 years and had hoped to leave it to my son and retire this winter. With the business so bad I really have nothing to leave him. We are trying many different specials to get people in but they just don't stay. I have remortgaged my home in hopes of hanging on until things turn around but it sure looks grim. My place was worth $600,000 now I don't have a viable business to even sell. The smoking ban must be looked at for all the small bars, it has hurt all of us."
-- Birdie Johnson, The Bird's Nest, Garrison
"This ban has put a financial burden on me and my business since it took affect on October 1st of last year. Right now we are down 30% in sales in the bar since the ban went into effect. I have a mortgage of over $5,200.00 a month. I have not been able to cut myself a check since last October, and I have put my own money into the business. After we pay labor and everything else our checking account is in the red. I do not know how long I can go on this way without closing the doors. We live in a very rural place in northern MN and we only draw from the people that live in the area of about 1200 people...I think this is against my constitutional rights. This is my business and they do not have the right to tell me how to run my business..."
-- Tom Marinaro, Tank's Bar & Restaurant, Babbitt
"The Border Bar-n-Grill is located just a "stones throw" from the Wisconsin border. Some people come into this bar and are not even sure if they are in Minnesota or Wisconsin. We have watched many people walk out when they realize they cannot smoke, and then realize how close they are to the smoking bars across the river. Some look sheepish and apologize when they leave without making any purchases, and some just walk right out. We hear time and time again how unfair people think this is. Our sales are down over 40% since the smoking ban went into effect. We have a beautiful, empty bar-- The bars across the river are busier than they have ever been. Several have gone on record saying how impressed they are at how good their businesses are doing... The non-smokers are gone too. They walk into an empty bar, see that nothing is going on, and then cross the river to go to the bars where the people and fun are. They are NOT sitting in empty bars enjoying the smoke-free enivorment!"
-- Stacy Irwin, The Border Bar-n-Grill, Taylors Falls
"I am a non smoker...I gotta tell you that..but as a business owner this is killing us...we are going to have a real hard time making the mortgage payment this week end...I will end up writing a check and hope like hell I can cover it...damn...I am sure you folks have felt the same way. We have had to switch food vendors because we longer have the money to pay at the time of delivery. The vendor we switched to has 30 day net. We are dying on the vine here. We are behind in taxes and had to let help go."
-- Kay Stevens, Ann Lake Bar & Grill, Ann Lake
"We are a third generation bar and have been in business for 30 years. Since the smoking ban went into effect my business has suffered greatly. Since October 1st 2007, I have put $10,000.00 of my retirement savings into my business just to stay open, our sales have been down 30% to 40% and my wife Karen and I have not taken a pay check since the smoking ban went tnto effect. We are a border town with Wisconson just accross the river (where they can Drink, Smoke and Gamble). We also have to compete with Treasure Island Casino only 20 miles away (where they also can Drink, Smoke, and Gamble)..."
-- Brian Walker, Old Bank Bar & Grill, Lake City
"My numbers are down 36 percent from last year to this year October to December. I have had to cut hours for my 4 employees and 3 of us are single mothers. We are closing early like 5 nights a week. I have had to borrow money from family, the bank, and cash in my life insurance policies to keep the doors open. My heat and electric bills are huge due to my doors always being open. I have not seen regular customers in months... We wont survive much longer and i have 2 beautiful little girls to feed. I have never been on welfare, I have operated my bar for 11 years and have always managed to provide for them quite well... who is there to help my family? Where is my alternative? Who gave me a Choice? I guess the hardworking tax payers of our great state won't mind taking care of my family for awhile, cause it won't be long and we won't have another alternative, please help us!"
-- Lisa Anderson, Mike's Uptown Liquor, Hill City
"I run a small Karaoke & DJ company based out of Rosemount. I currently have 3 nights a week at my local American Legion... My Thursday night business used to be mediocre, BINGO brought in a number of people before BINGO who'd sit. Then after BINGO I would generally get quite a few people who would come into the bar and hang out for an hour or two prior to leaving. In addition, the breaks that take place during Bingo used to see a large crowd coming into the bar, usually lining up at the pull-tabs. We can no longer tell in the bar proper when there's a Bingo break. We don't see hardly any traffic coming across and the Bingo crowd is suffering. My karaoke show now consists of a core group of regulars and I'm not seeing hardly any traffic coming from the Bingo into the bar when it's over. Additionally, there's been problems for some time getting standard wages for karaoke shows... We still have the expense of keeping the library current, patrons want to sing what they hear on the radio, these discs run between $15 - $30 each, plus the wear and tear on equipment... I've already been warned by the commander of my Legion that I can pretty much count on Thursdays being taken away for the summer this year because the ban is adding to slow sales. This very well could cause my van to be lost since it's my 3 nights a week that are paying my van payment... There are so many industries that are suffering in addition to the bars that it's not even funny..."
-- Thomas Funari, DiverTunes DJ & Karaoke, Rosemount