Smoke signals from Churchill Downs Inc.

One nugget in Churchill Downs Inc.’s recent quarterly earnings report about a New Orleans smoking ban brought back memories of the snuffing out of smoking inside at the Louisville-based company’s namesake track.

Wikimedia Commons
Wikimedia Commons

In the earnings report, Churchill noted that the New Orleans City Council in January approved a smoking ban in bars and other public places, including casinos. The ban, which impacts the company’s Fair Grounds Race Course & Slots, took effect in April.

“The smoking ban had a negative impact on our business, financial condition and results of operations during the three months ended June 30, 2015,” Churchill said in the report. “During the third quarter of 2015, we expect to offer our patrons at Fair Grounds Slots an outdoor smoking patio to mitigate the unfavorable impact of the smoking ban.”

Slots revenues for the three-month period fell $500,000, and Churchill said competitors not covered by the ban gained market share. Earnings before taxes and other accounting factors fell $200,000 for Fair Grounds and Churchill’s Louisiana video poker operations.

Those details triggered the memory of Churchill’s ill-fated effort to avoid Louisville’s smoking ban at the Central Avenue track. The Louisville Metro Council passed a smoking ban that exempted Churchill Downs. Churchill supported the exemption, saying it would be at a competitive disadvantage with Indiana casinos that allowed smoking.

A Jefferson Circuit Court judge, in a case brought by businesses that weren’t exempted, threw out the exemption.

“While it is true that horse racing is an important industry in the state, so is the hospitality industry,” Judge Denise Clayton (now on the Kentucky Court of Appeals) wrote in the 2007 decision as reported by The Associated Press. “To hold one out as important above the other, is simply not a rational basis for exemption.”


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