After several public hearings and heated discussions from both sides, council members voted Tuesday night to take the ordinance off the table.
The proposal would have banned smoking in public places including bars, restaurants and the casino.
It will now continue to be up to individual businesses to decided whether or not to be smoke free.
The debate from both sides was once again heated before it went to a vote and for the first time the general manager from the St. Jo Frontier Casino made his voice heard.
"If this measure was to pass in St. Joe, this would probably be the first casino that would be no smoking in the state of Missouri and it would be the last one," said St. Jo Frontier Casino General Manager Craig Travers.
Supporters of the ban urged council members to stay the course.
"I urge you not to back pedal on this issue," said Mary Attebury with Clean Air St. Joe. "It's a health issue."
Council members say they don't know what will happen down the road, but they have no plans to revisit the issue any time soon.