Hawaii casino plan stalls in House, alive in Senate

The chances of Hawaii waiving its prohibition on legalized gambling to allow a resort casino to help get more than 28,000 Native Hawaiians onto their ancestral lands dimmed considerably Friday when a House bill stalled in committee.

State Rep. Sean Quinlan, chairman of the House Economic Development Committee, deferred House Bill 359 without a vote.

The proposal has divided the Native Hawaiian community and the Hawaiian Home Lands Commission on whether an Oahu casino is the proper way to generate revenue to get Hawaiians into homes and onto land.

A companion bill, Senate Bill 1321, remains alive and is scheduled to be heard Thursday in the Senate Hawaiian Affairs Committee.

“It’s an emotional issue for me, honestly,” Quinlan told the Honolulu Star-Advertiser following his decision to defer HB 359. “It really wasn’t about a casino, ultimately. It was fundamentally about the wait-listers. We’ve decided time and time again to not properly fund DHHL. … But perhaps the casino wasn’t the right way.”

He nevertheless applauded DHHL for coming up with a concept “that was bold and imaginative.”

The Hawaiian Home Lands program was created a century ago to return Hawaiians with 50% Native Hawaiian blood to their native lands though farming, aquaculture, pasturelands and housing, but has a wait list that includes some beneficiaries who have been on it for decades.

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

Under both the House and Senate bills, a “wagering tax” of 45% would be imposed on all gross gaming revenues from the casino. 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.

Quinlan’s decision followed testimony from the Honolulu Police Department and prosecutor’s office and others opposed to HB 359 — and sometimes passionate testimony from Tyler Gomes, deputy to DHHL Chairman William Aila.

Gomes told the House committee that a DHHL casino could be different from ones in Las Vegas, and social ills could be mitigated.

DHHL came up with the idea for a casino in October when the state’s ongoing economic problems because of COVID-19 made it obvious that DHHL will not be getting the funds necessary to make a bigger dent in the wait list.

A 58-page draft bill then went before the Hawaiian Home Lands Commission just before Christmas — on the eve of the legislative session — and the commission approved the concept by a 5-4 vote.

ON FRIDAY, Gomes told Quinlan’s committee that a resort casino “is the only solution out there that currently exists to solve the $4.5 billion gap, the 28,000 Native Hawaiians living and dying on the wait list as we wait for an idea that’s not coming.”

DHHL has been working to cut costs and generate revenue, but Gomes told the Star-Advertiser that there is no other idea like a casino to raise millions of dollars in a hurry.

If anything, DHHL’s proposal has brought renewed attention to the lack of funding and the demand for Hawaiian home lands, so Gomes said he was not “disappointed” by Rep. Quinlan’s deferral.

“It was an opportunity to reframe the discussion of how do we fund the department properly,” Gomes told the Star-Advertiser. “We’ve got more people talking about this 100-year funding issue.”

Just as the issue of a casino has divided the Native Hawaiian community, Gomes said he received texts and phone calls Friday that both supported and criticized his decision.

In a statement, Aila, chairman of the Hawaiian Homes Commission, thanked DHHL staff for “bringing forth such a bold and innovative idea to address the devastating budget shortfall that this Department faces year after year. While the committee’s deferral of HB 359 was not an ideal outcome, we look forward to the future with hope. The accompanying Senate bill will be heard next week, and we thank the Legislature across the board for allowing this conversation to come to the table. As we have previously commented, there are currently no other proposals to this scale that would close the gap of our funding shortfalls.”

Hawaii and Utah are the only states that prohibit all forms of legal gambling.

Legalizing gaming in Hawaii remains opposed by Hawaii’s top elected officials, including Gov. David Ige, state Senate President Ron Kouchi and House Speaker Scott Saiki.

But Saiki and Kouchi introduced the DHHL casino bills in their respective chambers at DHHL’s request to have a debate on gambling, in general, and specifically raise the question of how to come up with the money necessary to help clear the DHHL backlog.

OTHER GAMBLING bills remain alive in this year’s legislative session, including:

>> SB 853, SB 561 and HB 363, which would allow for a state lottery.

>> 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.”

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