The Italian boss insists that the 21-year-old striker's tobacco habit is not his problem but feels that it would be better if he quit smoking, having given up trying to force the youngster into giving up.
"It's not my problem," Mancini told the Daily Mirror. "If Mario wants to smoke, it's his problem.
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"If he wants my opinion, it is better that he quits, but if he smokes 10 cigarettes a day and scores two goals every game, then that's better."Balotelli sat in the stands during Manchester City's midweek trip to Spain to face Real Madrid in the Champions League, despite being fit and travelling with the squad to the Spanish capital.
However, Mancini denied claims that the forward sat out the fixture because of a breach of club discipline relating to a late night out, revealing that it had merely been a case of squad rotation.
"Mario was upset, but that's normal. I don't think there can be a player who doesn't play and is happy," he continued, "but when you have five games in 20 days, like we do, you should pay attention to the consequences.
"It's better that one important player, like Mario or James Milner, goes to the stand. When you have a full squad it's very difficult.
"If you want to go through in all competitions, it is important that you have players who understand this situation."