Operators hoping they've seen bottom
In conversations with licensed location operators and gaming machine vendors in mid-November, apparently not much has changed since early results of the full implementation of the Montana Clean Indoor Air Act were reported in the Montana Tavern Times last month.
Indications then – the third week of the smoking ban – were, in general: rural locations were faring better than urban; widely diversified businesses were holding up better than those more narrowly focused; food, beverage and entertainment departments were down or up marginally or holding steady, while gaming revenues were taking the biggest hit; a few pre-ban marginal operations were looking shaky; quite a few locations have taken measures to accommodate smokers outdoors; and that there are specific exceptions to all the generalizations.
Other early mitigating circumstances – a cold weather snap, a poor economy, flu epidemic in the headlines, a traditionally slow season anyway – were identified by some operators as possibly contributing to the downturn.
Gaming
During the seventh week of the full ban, Amusement Services route operator Tim Carson said his gaming revenue was still down 15 to 16 percent compared to September, but that he thought there may have been a slight uptick in week 7.
"There may be some recovery," he said. "Everyone is feeling some pain. Right now, if we could come back 2 to 4 percent, I'd be happy. We're hoping we've seen the bottom. At this point everyone needs to be sure every decision we make will produce a return."
Heidi Schmalz, CFO, and Steve Arntzen, COO, of Century Gaming, a route company in Montana that services about 4,200 devices, reported they had hopefully seen the bottom in week 6 of the ban.
The company reported revenues were down 7.46 percent in the first full business week after the ban (Oct. 2-9), down 14.97 percent in week 2, down 16.73 in week 3, and now down 15.54 percent in week 4, 16.26 percent in week 5 and finally 15.37 percent in week 6 (Nov. 7-13).
Schmalz said, "I think we've seen bottom. Last week was as good as its been since the second week. I'm hopeful. I'm trying to be optimistic."
Arntzen said, "It seems we're bouncing around the bottom, down somewhere between 15 and 16 percent. If so, we got there in a hurry but it hasn't moved much. That's where we work up from.
"But the drop has been much sharper in the west than the east; in fact, much worse in northwest Montana and the least in the southeast.”
What will cause a rebound?
"Probably general economic conditions" are the most important factor, Arntzen says. "We all need some good economic news. People need to have some more discretionary income.
"And somehow we need to replenish our (lost) customer base. We've got to get the word out; give people reasons to come in and try our entertainment, let them know it is different than it used to be, that we have new products and new angles on old products. They need to find out how entertaining it is."
Bar Business
Bonnie Miller of Millers Crossing in Helena told the Tavern Times her business remained largely unaffected, but then Miller's went smoke free about 16 months before the deadline.
"We all knew it was coming; everyone slid right into it," she said. "Most of my customers are the kind who don't smoke at work, at home, in their cars or around their kids, so it wasn't that big of an adjustment. We are also pretty diversified: a little food, beverage, entertainment and gaming. Our gaming is actually up a little but we also upgraded some of our machines."
She acknowledged that at a recent county tavern association meeting, most in attendance said their business was down. "But most said they thought it would turnaround, if we're left alone now," she said.
Miller said she really has nowhere to create a comfortable outdoor shelter for smokers so they have been relegated to the sidewalk in front.
"I think it will all mesh if they leave it like it is. We're living with it now, we're all behind it, and that may seem hard to believe for the powers that be. Maybe they want to make an issue where there isn't one. They could make it a big deal, cause contention, if they keep pushing. Let's give everyone a chance to adjust. I just hope no one gets crazy."
From the opposite pole, Diana Hahn, proprietor of the Watering Hole Saloon in Reed Point, called the Tavern Times after last month's report was published and said the story told there was far too rosy. She said the ban was "killing" her business.
The Times spoke with her again before the December deadline and about six weeks after the ban took effect. Hahn said things had deteriorated even further since our initial discussion four weeks into the ban.
She works the business full time and has another full time bartender/cook and a part-timer.
"I'm going to have to cut back their hours," she said, "and probably lay one off pretty soon. I'm going to try to make it until the end of the year. We built this bar 35 years ago and I just can't run it myself anymore; I'm just too old."
The Tavern Times talked with several other licensees at a Montana Tavern Association board meeting in Helena, Nov. 17. First was Jupe Compton of the Palace Bar in Havre.
Compton:
The Palace went smoke-free Oct. 1. The business has beverage service and gaming, no food.
We're up and down a little. Gaming is down very definitely, maybe 20 percent or so. Beverage is about the same. Customers think it’s BS, but they are complying. All bars in this area are in compliance, too, as far as I know.
Because of the real estate, I can't do much in the way of setting up an outdoor customer area. I just put out two butt collectors.
Mary Jane Heisler and her husband, Tom, run Big John's and Classic 50s in Great Falls. Both establishments went smoke-free Oct. 1.
Heisler:
Machine play is down 20 to 25 percent. At Classic 50s, the bar businesses has increased. We haven't done anything different but it's good. The food business is up there, too, but I don't know why. Bingo (at Big John's) is down, and it's hard to replace lost bingo customers because younger people don't play.
We haven't taken any measures to accommodate customers outdoors. As far as I know, every licensed business in the Great Falls area is in compliance.
Tanya Harper owns and operates the Pioneer Bar and TNT Casino in Cut Bank. Her business went smoke-free Oct. 1.
Harper:
It hasn't been too bad. It was a little bit at first. The bar and food were up, but gambling was down. But it seems the gambling is coming back up.
Kris Jupka, with her husband Ron, runs Doc's OK Corral in Lewistown and the Mining Company Saloon and Casino in Anaconda. Both places went smoke-free Oct. 1.
Jupka:
The Anaconda business was affected more than our business in Lewistown. Gambling was down a little in Lewistown, maybe 5 percent, but gambling was off by about 20 percent in Anaconda. The bar income has been steady in both places.
We did build outdoor customer areas at both places, in fact two in Lewistown – one off the bar and one off the casino. They have two walls and heaters. We have gotten no problems from local officials.
We really hope to see a rebound, especially in Anaconda. It's the smoking ban and economy. But the declines have flattened and maybe we've seen a little uptick.
We visited with JoAnn Fuller, owner of the Timber Bar in Big Timber and where smoking was allowed until Oct. 1. This business has beverage, food and gaming.
Fuller:
We're doing pretty good. We've had a very good hunting season. We're not really up, but not down, either. But you have to consider, one year ago they laid off 450 people at the mine. If you look back about two years, it's about par. You also have to consider the competition: a local steakhouse just closed.
We're really happy with the way things are going. We can't do anything to accommodate smokers outdoors because of the real estate. They're just stepping out back and so far our neighbor hasn't complained, but we're policing the heck out of it. I think everyone around here is in compliance.
Across Helena is Nickels Gaming Parlour owned and operated by Bob Gilbert. He's run a "hopping joint" for most of a decade but told the Times Nov. 19 things right now are as slow as they've ever been.
Gilbert:
My gaming Machine drop is down 25 percent. My girls are going home earlier; we're no longer fully staffed after 11 p.m. So they're down about three hours, and of course they aren't getting the tips during those hours and with reduced customer volumes, tips have suffered further. At times is just the bartender, the swamper and me.
Nickel's is a “casino,” with about three-fourths of its income derived from gaming with the balance mostly from the bar and a small remainder from some fried bar food.
Outside we had posted on our readerboard: "Smoking customers please come back." Everyone's touchy. In fact, I just turned down the guy selling ads for Carroll College. I've never had to do that before.
Don't get me wrong. I know we're never going back (to smoking). But I just spent $10,000 on new carpets, paint, a real deep cleaning .... Now I'm looking to start cutting more expense.