"This is a very bold move ... and one I think the casino will be able to carve out a niche for itself," said Rep. John Mayo, a Democrat from Clarksdale. "I am surprised and will look forward to the results."
Mayo said he has spoken with a casino employee who left Mississippi and went to another casino out of state where there's no smoking.
"He told me they have not seen a drop in business, and he also said they have fewer employee complaints and absences due to smoking-related illnesses," Mayo said.
The Palace Casino Resort is undergoing a $50 million expansion and renovation. When it reopens June 14, the casino, hotel, restaurants and sports bar will all be smoke-free.
Smoking will be permitted outside the main casino in a $1 million lounge, said general manager Keith Crosby. The lounge, formerly an outdoor patio, is located near the gaming floor, and features its own air-conditioning and heating system. There will be no gambling in the lounge.
"We looked at ... the impact on our guests, the impact on our associates and also the physical plant. And we thought that all three suggested that we take this action," Crosby said. "And, you know, being a leader comes with a little risk, but we're willing to take it."
Mississippi's chief gaming regulator called the decision a novel idea.
Gaming Commission executive director Larry Gregory said the Palace decision gives gamblers a choice and the free market will determine if Palace made the right one.
Some casinos that opened in the 1990s set aside rooms for nonsmokers off the main casino floor. Some still have nonsmoking gaming areas.
Many casinos use high-tech ventilation systems, "smoke-eaters" and deodorizers.
The American Gaming Association said 12 states with commercial casinos have some restrictions on smoking, mostly in nongaming areas. Colorado, Illinois, Maryland and South Dakota ban smoking everywhere on casino properties. Mississippi and Indiana don't have smoking restrictions.
AGA spokeswoman Holly Wetzel says the association believes each company will address indoor air quality.
"Our industry is neither pro-smoking nor anti-smoking, but we realize that balancing the needs of these two distinct sets of patrons, as well as those of our employees who don't smoke, is of paramount importance," Wetzel said. "And it's our job to ensure that, when they visit our casinos, both these populations have an experience that meets or exceeds their expectations."
Wetzel said a recent study conducted by the University of Nevada-Reno found that 20 percent of casino patrons smoke.
"And we've seen the economic impact of bans," she said. "Casinos in Windsor, Canada, certainly were negatively impacted by the smoking ban in Ontario, and Detroit's casinos benefited as a result."
A 2006 Mississippi law bans smoking inside all publicly owned buildings in the state. Private businesses, which include casinos, are not addressed in the law and are unlikely to be by legislators or regulators.
Areas with casinos that have adopted local smoking prohibitions have specifically exempted gambling houses.
In 2008, a study commissioned by the Mississippi Gulf Coast Convention and Visitors Bureau suggested that when it comes to developing a new tourist destination, most respondents say they would prefer a smoke-free casino.
Officials said then that the study was unlikely to give a boost to any smoking ban proposal. That was because casinos where bans existed had lost money. Atlantic City's casinos tried it for one month, but with the sluggish economy, city officials repealed the ban.