The operators of the Top Ten Bingo in Poulton Road say the Government ban, which started on July 1, had an immediate effect – but things are getting worse with the colder weather.
The ban means smokers who once enjoyed a cigarette in the hall must now go out into the cold – and many customers just don't want to do it.
Manager Craig Lambert is optimistic he can turn things around, but he admits the bingo hall will be in danger of closing down if the trend cannot be halted.
He said that in November last year the hall was seeing 1,500 customers through the door a week - now it is down to an average of 900.
Mr Lambert said: "The Government has been very inflexible with the law. In some Continental countries, bar managers can pay a little extra to allow smoking at the bar, but not here.
"Smokers are being treated like lepers and many pubs will also feel the affects this winter."
After the original Fleetwood Pier set-up closed, the bingo hall still known as 'Barneys' became the town's only bingo operation.
Mr Lambert said that if the Top Ten did close, it would have a devastating social effect on its customers, many of whom are older, single ladies.
He said: "Bingo offers them a chance to get out and talk to people – without it many of them will become more isolated."
Housed in the former Victoria cinema, the bingo hall opened in 1967.