R.I. treasurer backs shareholder proposal for Bally’s to explore going smoke-free

Casino workers gather at the Rhode Island State House on Thursday, May 9, 2024, to support an indoor smoking ban at Bally's casinos in Lincoln and Tiverton. (Alexander Castro/Rhode Island Current)

A day before Bally Corporation’s annual shareholders meeting, the odds appear stacked against a push by a Michigan-based health care nonprofit to force Rhode Island’s sole casino operator to eventually ban indoor smoking.

But Trinity Health’s proposal asking Bally’s to commission a study of the economic impact of going smoke-free — not just at its Lincoln and Tiverton casinos, but all of its properties nationwide — is receiving a boost from Rhode Island General Treasurer James Diossa.

Diossa’s office confirmed that the proxy voting vendor representing the state at Bally’s virtual annual meeting scheduled for 2 p.m Thursday will support Trinity Health’s proposal.

Rhode Island’s pension system owns 990 shares of Bally’s stock worth roughly $11,000. The state has owned Bally’s stock since September 2021. That amounts to 0.002% of Bally’s 40 million shares.

Bally’s eight-member Board of Directors has come out opposed to the proposal, calling it “unwarranted and unreasonable.” The board, along with Bally’s executive officers, own a combined 11.75 million shares of company stock — representing 28.9% of all shares.

Trinity Health, based in Livonia, Michigan, owns 440 shares of Bally’s stock, or 0.001% of Bally’s shares. Bally’s is one of three publicly owned casino companies Trinity owns stock in that have properties in states without indoor smoking bans. Trinity hopes to use its activist shareholder status to clear the air at properties owned by Bally’s, Boyd Gaming and Caesars Entertainment.

An identical proposal Trinity Health pitched to shareholders of Las Vegas-based Boyd Gaming was voted down by 78% of shareholders at its May 9 annual meeting held online. The final tally was 18.5 million shares in favor and 63.6 million against, according to a Securities and Exchange Commission filing dated May 13. Boyd Gaming’s Board of Directors and executives, who own 28% shares, were opposed.

Cathy Rowan, Trinity’s director of socially responsible investments, didn’t see the vote as a loss at all but a “strong vote” considering it was the first of its kind and will help momentum for making casinos smoke-free.

“Typically, proxy voting advisory firms pay close attention to how a company responds to a proposal that receives a vote of 20% or more,” she said in an email Wednesday afternoon. “I hope that Boyd Gaming will respond with some concrete steps toward meeting the request of our proposal.”

Trinity Health has an identical proposal on the docket for Caesars Entertainment’s annual shareholder meeting scheduled for June 11 in Reno, Nevada. Caesars’ 10-member Board of Directors opposes the proposal.

In support of casino workers

On May 9, the same day as the Boyd Gaming annual meeting, a group of table dealers from Rhode Island’s two casinos joined Rep. Teresa Tanzi, a South Kingstown Democrat, as she delivered a letter to Diossa urging his support ahead of Bally’s annual meeting.

“Bally’s resistance to ending indoor smoking is harming the workers they claim to value and who are instrumental in the company earning billions of dollars in revenue each year,” Tanzi wrote.

Tanzi said in an interview Wednesday Diossa was noncommittal at first, but she received a call the next day from a staffer offering his support.

“It was very unceremonial,” said Tanzi, who has reintroduced legislation that would end the exemption Bally’s two casinos have from the state’s indoor smoking ban.

Diossa’s support for Trinity’s proposal, does not mean he has an official stance on a smoking ban. Treasurer’s Office spokesperson Michelle Moreno-Silva said the state’s shareholder vote is strictly to see what data a potential report could include.

“Before we support any legislation, we would like to look at the facts of the matter,” Moreno-Silva said in an interview Wednesday morning.

Bally’s owns and manages 15 casinos across 10 states, a New York golf course, and a Colorado horse racetrack. So far, Diossa appears to be the only state treasurer backing Trinity Health’s proposal. 

Spokespeople for treasurer’s offices in Illinois, Missouri, and Nevada said neither of their states own any shares of Bally’s stock, thus making them ineligible to vote. Delaware’s State Treasurer’s Office referred Rhode Island Current to the state’s pension office, where an administrator Wednesday afternoon said to fill out a public records request to find out if the state owned shares.

Colorado Deputy State Treasurer Eric Rothaus referred Rhode Island Current to the state’s Public Employees Retirement Association.

Rhode Island Current submitted inquiries with treasurer’s offices in Indiana, Louisiana, Mississippi, and New Jersey — all states where Bally’s owns casinos. No responses were received as of Wednesday afternoon.

“The pressure is mounting,” Tanzi said. “And the reasons to object are getting thinner and thinner every year.”

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