Critics are chastising the Ontario government's decision to allow smoking rooms to be built inside provincially owned casinos but not bars and restaurants.

The casino plan quietly received the green light as revenues plummet because of the tough, new no-smoking law.

The Smoke Free Ontario Act, which became law last June, prohibits bars and restaurants from providing its patrons with smoking rooms.

Province-owned casinos in Niagara Falls and Windsor have been building such shelters for gamblers who like to smoke.

The ruling Liberal government says it is not being hypocritical, despite cries of using a legal loophole.

Health Promotion Minister Jim Watson says casinos can build smoking shelters because their primary business is gambling, not serving alcohol and food.

Watson added if bars and restaurants were allowed to build the shelters, the establishments might have staff serving to customers in them, endangering their health with second-hand smoke.

Critics say the casinos are in the hospitality industry and should not be allowed the advantage of smoking enclosures.

"One of the purposes of the Smoke-Free Ontario Act is to level the playing field for hospitality owners and proprietors," Michael Perley, of the Ontario Coalition for Action on Tobacco, told CTV News.

"A problem that's arisen is that casinos offer food and drink to their customers, not as their primary purpose, but it's in direct competition with local food and beverage operators."

In a year-end interview with CTV's Ken Shaw last month, Premier Dalton McGuinty admitted the province relies heavily on casino revenues.

"It's kind of painful to admit, but we have developed an addiction to gambling revenues here in Ontario," he said. "If we didn't have those revenues, we'd have to look for them elsewhere."

Opposition parties accuse the Liberals of trying to protect its own dwindling casino revenues at the expense of the private competition.

Mychoice.ca, a tobacco-industry funded lobby group, says there should be no exemptions for the law banning smoking in all indoor public places in Ontario.

Competition from U.S. casinos and the higher Canadian dollar have also affected revenues at Ontario's casinos.

With a report from CTV's Janice Golding