Could this activist shareholder proposal finally clear the air inside Bally’s casinos?

Smoke emanates from a cigarette inside an ashtray by a slot machine at Bally's Twin River Lincoln. (Christopher Shea/Rhode Island Current)

Bills seeking to end the exemption from the state’s indoor smoking ban at Rhode Island’s two casinos have never made it out of committee at the State House. But a Michigan nonprofit hospital network thinks there is a better place to take the fight to ban smoking at all Bally’s-owned casinos across the country. 

The company’s annual shareholders meeting.

Item number four on the agenda for Bally’s Corporation’s May 16 virtual annual meeting asks the company’s Board of Directors to commission a report on the potential financial benefits of going smoke-free at its properties. The company owns and manages 15 casinos across 10 states, a New York golf course, and a Colorado horse racetrack.

The request comes from Trinity Health, which owns 440 shares of Bally’s stock — representing 0.001% of the more than 40 million shares issued by the Rhode Island-based casino giant. The health care nonprofit has used its shareholder status to pursue public health initiatives for the past two decades to fight for improving food and nutrition, reducing gun violence, and diminishing references to smoking in film and television. 

Trinity Health is headquartered in Livonia, Michigan, but Bally’s shareholder packet gives a Bronx, N.Y, address for the nonprofit health system because that is where Cathy Rowan, Trinity’s director of socially responsible investments, is based.

“This is an important issue for us — we promote health and wellness,” said Rowan. “Hearing about the conditions that casino workers undergo is really concerning.”

Trinity’s proposal would set a deadline of six months for the board to publish the report on the financial impact of adopting a smoke-free policy. The proposal is filed in collaboration with the American Nonsmokers’ Rights Foundation, based in Berkley, California, Rowan said. 

Bally’s eight-member Board of Directors unanimously recommends shareholders vote against Trinity Health’s measure, calling it “unwarranted and unreasonable.” Corporate spokesperson Diane Spiers declined to specify the board’s opposition.

“Bally’s opposition statement is located on page 51 of the Proxy Statement,” Spiers said via email.

“The company is committed to providing a first-class entertainment experience to both its smoking and non-smoking customers, and compliance with local smoking laws ensures that customers have access to comparable gaming experiences with all other casinos in each market,” the Bally’s Board of Directors wrote in the company’s proxy statement published April 5.

Rowan said she was not surprised by Bally’s stance but noted that Trinity Health has been successful about a third of the time through shareholder action. The nonprofit listed over 135 shareholder advocacy engagements “with great success” on its 2022 annual information return filed with the IRS. They included getting discount retailer Five Below to manage its use of chemicals, Unilever to agree to stop marketing food and beverage products to children under the age of 16, and PDC Energy to agree to end its routine flaring of methane.

Even if Trinity Health’s proposal could be considered a longshot, Rowan said it would be a success just to get the issue on peoples’ minds moving forward. 

“We’ll see how the shareholders of Bally’s vote on it,” she said.

Trinity Health’s proposal will also be up for a vote by shareholders of Las Vegas-based Boyd Gaming during its annual meeting May 9. Rowan said Trinity Health’s coalition also submitted an identical measure to Caesars Entertainment, based in Reno, Nevada, which has not yet scheduled its shareholder meeting.

The front entrance to Bally’s Tiverton casino. (Christopher Shea/Rhode Island Current)

​​A novel approach to a growing trend

“It’s definitely a novel approach,” said Patrick Kelly, a professor of accountancy at Providence College who studies gambling, adding he’s never seen a casino’s shareholder try to make such a change at the investor level.

Trinity Health’s proposal is consistent with national trends to get smoking out of casinos, Kelly said.

Nine states ban smoking inside of casinos with live dealer table games, according to the Centers for Disease Control and Prevention — including neighboring Massachusetts and Maine. The list of smoke-free states also includes Delaware and Illinois, both of which include Bally’s properties. 

Connecticut’s two tribal-run casinos, Foxwoods and Mohegan Sun, also prohibit indoor smoking.

That leaves Rhode Island uniquely positioned in southern New England to draw casino consumers who want to smoke. 

“If a state thinks it can get an advantage over another one by taking a particular action, they’ll do it,” Kelly said. “Folks that want to smoke in a prohibited state may end up going where smoking is allowed.”

Bill DelSanto, a table dealer at Bally’s Twin River Casino in Lincoln, said that hasn’t been what he’s heard from gamblers.

“In fact, we have many smokers who come to our tables telling us they prefer it to be nonsmoking,” he said. “They preferred to take a break outside.”

DelSanto was referring to when smoking was temporarily banned at Bally’s Lincoln and Tiverton casinos when they first reopened after being closed due to the COVID-19 pandemic. Bally’s lifted those rules in March 2022.

“Which is a shame because we did fine for well over a year,” DelSanto said.

Lawmakers in New Jersey made indoor smoking illegal in 2006, but casinos remained exempt. Bills that would end smoking in the state’s casinos have been introduced in every two-year session since then, but did not get any hearings until the previous session, which ended in early January. 

Atlantic City imposed a municipal ban on smoking in casinos for four weeks in 2008, which led to a 19.5% decline in casino winnings, Kelly said.

“Even casino workers were in opposition to each other,” Kelly said.

But that split doesn’t appear to be the case with Rhode Island’s casino staff. Leigh Gilbert, an organizer for Table Game Dealers Laborers Local 711 said the union has encouraged any and all workers with Bally’s stock to vote in favor of Trinity Health’s proposal.

“I don’t know how many people are actively participating [in the shareholder meeting], but I would say a majority of our membership would love to see smoking go,” Gilbert said.

Table Game Dealers Laborers Local 711 includes roughly 500 members.

What’s being done at the state level?

Rep. Teresa Tanzi, a South Kingstown Democrat who has long championed an indoor smoking ban in Rhode Island’s casinos, praised the independent action taken by Trinity Health and American Nonsmokers’ Rights Foundation.

“It’s brilliant,” she said. “We’re so far behind the times.”

Since 2021, Tanzi has sponsored a bill that would end the casino exemption. But unlike prior attempts, Tanzi’s latest push is a bill that would ban smoking but include a $1 million budget allocation for Bally’s to market its new no smoking policy. 

“This way they can offset any potential loss that might be incurred,” she said.

Companion legislation is sponsored in the Senate by Sen. V. Susan Sosnowski, a South Kingstown Democrat. Both bills were referred to their chamber’s respective finance committees, but have yet to be scheduled for a hearing. Tanzi said she’s disappointed by anti-smoking legislation getting stalled, but not shocked.

“I can’t imagine that it’s going to come to the floor any time soon,” she said. “Everybody understands the issue — if people were allowed to vote their conscience, this would pass.”

In its shareholder proposal, Trinity Health cited potential risks in Bally’s keeping its indoor smoking policies, including higher employee health insurance premiums, higher maintenance costs, and deterring visitors who don’t want to deal with potential carcinogens. 

“Shareholders have no guidance as to the costs Bally’s is bearing for continuing to allow indoor smoking, nor has the Company disclosed the social and environmental costs and risks imposed on its stakeholders,” the proposal states.

A roulette wheel inside the 40,000 square-foot gaming space and food hall Bally’s opened at its Twin River Lincoln casino in 2023. (Christopher Shea/Rhode Island Current)

Workers want to go smoke-free

Bally’s union workers say they welcome any attempt to create a smoke-free workplace.

Wendy Wiley, a table game dealer at Bally’s Twin River with 35 years experience in the industry, said it’s only harmed her breast cancer remission.

“I still have pain in the breast where I’ve had the tumor in,” she said. 

At the recommendation of her oncologist, Wiley now works in the casino’s designated smoke free section on the second floor, which includes only six table games. And to get to the smoke-free section, Wiley still has to navigate through the smoke-filled main floor. 

DelSanto, who said he has never touched a cigarette in his life, said he’s also seen his health decline in his six years working at Bally’s Twin River.

“I wake up each morning with a smoker’s cough,” he said. “You also get kind of tired breathing in the smoke — I definitely don’t have as much energy as I used to have.”

DelSanto said his eyes also itch every day. And that doesn’t account for the psychological toll he said workers face as they continue to breathe in carcinogens.

“It’s a downer for us, we know we’re going into smoke that’s bad for us,” DelSanto said. “There’s no safe space.”

But neither DelSanto or Wiley own shares of Bally’s stock, which prohibits them from taking action at the May 16 meeting. Only shareholders of record as of the close of business on March 20, 2024, are allowed to vote at the company’s annual meeting.

As of Friday, a Bally’s share costs $14.50.

The company plans to release financial results for the first quarter 2024 on May 1.

This story was updated to clarify the CDC’s smoke-free statistic.

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