Hawaii gambling bills under serious review

State lawmakers are prepared to have perhaps their most serious discussions about whether to allow some form of legalized gambling in Hawaii in the face of monumental budget shortfalls, a struggling tourism-based economy and the overwhelming challenge of trying to get Native Hawaiians onto state Hawaiian home lands.

The opposition to change Hawaii’s historic distinction as one of only two states — along with Utah — that prohibit all forms of legalized gambling remains strong, including from Gov. David Ige, Senate President Ron Kouchi and House Speaker Scott Saiki.

But Saiki introduced HB 359 in order to debate whether to allow the state Department of Hawaiian Home Lands to operate a single casino resort on unidentified DHHL land west of Ko Olina, which is intended to generate millions of dollars in annual tax revenue to meet its obligation to get Hawaiians off of a wait list and onto their ancestral lands and into homes.

State Sen. Jarrett Keohokalole, Senate majority floor leader and vice chairman of the Senate Hawaiian Affairs Committee, introduced a similar bill on the Senate side on behalf of DHHL.

Keohokalole is not convinced that Hawaii should allow gambling, but wants to hear all sides.

“We should have a discussion whether the casino plan is good, viable policy for the state to consider,” Keohokalole said. “We should talk about whether allowing the Department of Hawaiian Home Lands to do it is the right way to address the wait list. We should talk about alternatives to address the wait list. Given this budget situation, it’s not likely that the department will be likely to expect funding to accomplish that. … My priority is on addressing the wait list.”

At the same time, he said, “we also should have a discussion about gaming in general. We should talk about whether gaming is good policy.”

Hawaiian DHHL beneficiaries are fiercely divided over the DHHL proposal, which would allow a destination resort-casino that would permit 24/7 gambling, liquor, a golf course, aquariums, theme parks and sporting events. Forms of gambling could include cards, dice, tiles, dominoes and electric games intended to generate tax revenue for the Hawaiian Home Lands program. The program was created a century ago to return Hawaiians with 50% Native Hawaiian blood to their native lands though farming, aquaculture, pasture lands and housing.

DHHL has a current wait list of over 28,000 people, including some who have been waiting decades.

DHHL needs over $6 billion for infrastructure costs alone and is projected to take another 100 years to fulfill its mandate at current funding levels.

Last month the Hawaiian Home Lands Commission voted 5-4 to endorse the casino concept.

Under DHHL’s plan, a “wagering tax” of 45% would be imposed on all gross gaming revenues. Out of that, 75% would be directed to the Hawaiian home operating fund, 5% to the Native Hawaiian rehabilitation fund, 15% into the state general fund and 5% into a new state gaming fund.

As usual, several bills have been introduced this legislative session that would allow a wide range of gambling, including:

>> SB 853, SB 561 and HB 363, which would allow for a state lottery. The program would help fund capital improvement projects at public schools and the University of Hawaii system, scholarships and educational loan repayments for medical students who practice in Hawaii for 10 years, along with other programs.

>> HB 457, which would look at the feasibility of various forms of gambling, including offshore gaming, a lottery and whether two casinos in West Oahu could be allowed “without impacting the aloha spirit and causing Hawaii to be viewed as a gambling capital.”

Perhaps the most intriguing is HB 772, which would allow a single, Las Vegas-style casino atop the Hawai‘i Convention Center.

The bill was introduced by Rep. John Mizuno, vice House speaker, who said the casino would be aimed at tourists.

It would circumvent likely opposition from Hawaii hotels by requiring casino customers to stay overnight in an Oahu hotel and pay a daily fee of $20 that would subsidize shuttles to and from Oahu hotels and the casino.

Local residents who want to gamble also would have to stay in an Oahu hotel and pay the fee, keeping some Las Vegas gambling and hotel revenues on Oahu, Mizuno said.

Mizuno believes the state can restrict Las Vegas-style gambling to a single casino, or two, and said concerns about opening up gaming to a Native American tribe in Hawaii are unfounded.

“That’s not true,” Mizuno said.

No Native American tribe owns land in Hawaii “that I know of,” Mizuno said, and the Indian Gaming Regulatory Act passed by Congress allows Native American casinos only on Native American land owned prior to September 1988.

Mizuno has supported other forms of gambling before but now believes a single casino atop the convention center is needed more than ever.

Mizuno believes that all of the gambling bills “are going to hit major opposition” this session.

And he certainly does not expect the idea for a Hawai‘i Convention Center casino to be approved this year.

But his motivation is clear.

As the state faces projected annual budget deficits of $1.4 billion in each of the next four years and the economy continues to suffer under COVID-19, Mizuno said, “We need jobs, jobs, jobs. It’s worth a discussion.”