April 13 (Bloomberg) -- An anti-smoking law that New Jersey starts enforcing Saturday is causing tempers to rise at Lorenzo's, a Trenton landmark where politicians and the well- connected gather for cigars and steaks.

A party of men stormed out last month after owner Armando Frallicciardi Jr. asked patrons to refrain from smoking on Friday and Saturday nights in anticipation of the new law.

``You're dealing with a lot of egos,'' says Frallicciardi, an occasional cigar smoker who says the ban will cost his 84-year- old restaurant $36,000 in annual revenue. ``Cigars are associated with power, and we've been a place where the powerful have gathered for years.''

The New Jersey Restaurant Association, which represents about 1,200 owners of the state's 23,000 eating and drinking establishments, was part of a group that last month sued to overturn the ban. Their request was denied today by a judge in U.S. District Court in Trenton, the capital of New Jersey.

The group argued that the state put them at a competitive disadvantage by exempting Atlantic City casinos from the law signed by former Governor Richard Codey in January. The association said it didn't have an estimate for how much business would be lost.

Political Opposition

The ban was ``a specialized bill that left out Atlantic City,'' said State Assemblyman Joe Cryan, a Democrat from Union and a non-smoker who frequents Lorenzo's. ``I voted against it, and I still think it's wrong.'' His family owns Cryan's restaurant in South Orange and plans a rally against the law.

California, Connecticut and New York are among nine states that ban smoking in most workplaces, restaurants and bars to prevent tobacco-related illnesses, according to the American Lung Association. In addition to New Jersey, Colorado, Montana, Utah and Washington, D.C., have passed laws banning smoking that haven't yet gone into effect.

The New Jersey law also exempts establishments that get at least 15 percent of their revenue from tobacco. Violators are subject to fines of as much as $1,000.

Banning smoking from the casinos would cost the state $93 million in tax revenue in two years and 3,400 jobs, according to a PricewaterhouseCoopers report commissioned by the Casino Association of New Jersey.

Casino Lobby

The state's 12 casinos -- which include Harrah's Entertainment Inc.'s Showboat and Trump Entertainment Resorts Inc.'s Trump Taj Mahal -- attract more than 33 million visitors annually, employ more than 50,000 people and pay more than $350 million in state taxes every year, or about 2 percent of New Jersey's tax revenue.

The restaurant trade group says it would support a ban that included casinos and cigar bars, said association President Deborah Dowdell. At least four legislators have proposed bills that would remove the casino exemption from the law.

Not every restaurant opposes the ban. Richard Carnevale, whose family has owned The Annex restaurant on Nassau Street in Princeton for almost 56 years, said his eatery, now called Sotto Ristorante, is smoke-free after a remodeling.

Carnevale, whose restaurant sued to overturn a Princeton smoking ban in 2000, said many people still don't like the idea of ``Big Brother government'' telling them what to do, especially when the casinos are exempted. He said he didn't join in the lawsuit because it's a moot point. ``Eventually Atlantic City will have to fall in line also,'' he said.

No Decline

An analysis by the U.S. Centers for Disease Control and Prevention and the Texas Department of Health found no decline in revenue in El Paso, population 564,000, when it enacted restrictions on smoking in 2002. The CDC said the finding was consistent with other large cities that instituted bans.

Al Bucchi, a non-smoker and legislative chairman for the Veterans of Foreign Wars of New Jersey, said there are mixed emotions about a ban.

``There's quite a few that are glad and you've got those people that the reason they go to the club is to smoke,'' he said. ``That VFW canteen was the last bastion of freedom for a lot of them because they can't smoke at home.''

The state health department yesterday released a list of guidelines for the ban as part of an advertising campaign to educate the public on the new law. The campaign, funded by a $380,000 donation from the Robert Wood Johnson Foundation, includes radio, Internet, direct mail, billboard and print ads.

The guidelines revealed that the law includes a ban on smoking within 25 feet of the opening to a smoke-free indoor area, which will put a dent in restaurants' plans to create outdoor smoking areas for customers.

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net.

Last Updated: April 13, 2006 13:58 EDT