A draft legislative proposal that would authorize the development of a casino in the city of Kapolei, Hawaii was approved on Tuesday, December 22, 2020, in a 5-4 vote by the Hawaiian Homes Commission.

Earlier in the month, the Department of Hawaiian Home Lands (DHHL) announced that in an effort to address a “staggering budget shortfall” made worse by the ongoing COVID-19 pandemic, it intended to seek support for an integrated resort that includes “limited casino gaming” in Kapolei, Island of Oahu, on the “Hawaiian homelands designated for commercial use,” according to the agenda item (pdf).

Further review:

Once submitted, the draft legislative proposal will be reviewed by the Department of the Attorney General, the Department of Budget & Finance and Democratic Governor David Ige for their consideration.

If the governor decides to make the draft legislation part of his packet, the proposal, which also establishes the Hawaii Gaming Commission, would then progress to the Hawaii State Legislature for consideration. If, however, Governor Ige chooses not to include the proposal in his packet, the DHHL may seek a legislator to present it.

Governing body:

According to the DHHL, the focus of the initiative is to address the agency’s financial state by ensuring that it [DHHL] is the “primary beneficiary” of the gaming operation. That will be done via a lease agreement with the licensee and direct collection of 80 percent of the state tax payments on gross gaming revenue (GGR).

In addition to a gaming commission, the proposal also details the license, fee and criteria for the award of the gaming license.

In the earlier report, Tyler Iokepa Gomes, who serves as Deputy to the Chairman of the Department of Hawaiian Home Lands,?William Aila, explained that the casino-friendly plan calls for permission to spend $5 million in order to select a licensee that would develop, construct and operate an integrated casino resort on an Oahu?site it selects.

Plan opposition:

The proposal received strong opposition from Hawaii State Senator Mike Gabbard, who presides over District 20 which includes Kapolei, Makakilo, and portions of other towns on Oahu. The senator reportedly encouraged the DHHL to “focus on those kinds of projects to raise revenue which are less controversial and have less of a social impact.”

Possible benefits:?

In its stated case for the proposal, the DHHL offered…

“The downstream economic and social benefits of integrated resort development have been demonstrated globally in diverse locations such as Macau, Singapore, the Bahamas as well as across many states in the U.S.”

The argument continues…

“Evidence from over two hundred individual gaming facilities on federal trust lands in twenty-nine states demonstrates significant economic activity through expenditures by casinos and their suppliers; job creation at the integrated resort and new businesses stimulated by increases in tourism, in State government, in education, and at suppliers to the integrated resort; wages paid to employees of the integrated resort and all impacted businesses; taxes on all taxable economic activity; and direct gaming-related payments to the State and local governments.”

In the U.S., Hawaii and Utah are the only states where gambling is illegal.

This isn’t the first time gambling-related bills will have been considered by Hawaii’s Legislature after in 2017, SB 677, proposing to legalize online casino gambling, poker, and?lottery games,?was (unsuccessfully) introduced.