State senators propose legalized gambling

A pair of state Senate bills hope to legalize gambling in Hawaii in order to provide funding for necessary programs statewide.

Senate Bill 850 — which was carried over from the 2019 legislative session — and Senate Bill 2669 were both proposed by Maui Sen. Gilbert Keith-Agaran and co-sponsored by Kona Sen. Dru Kanuha.

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The two bills are functionally identical and would establish a Hawaii Lottery and Gaming Corporation to oversee a legal gambling industry throughout the state.

Such gambling would include legal wagering on games of chance — such as a lottery or card games — free-to-play games and sweepstakes offered outside of Hawaii to attract visitors to the state, and no more than two gaming events per year to further attract visitors.

Presently, Hawaii is one of only two states in the U.S. to have an outright ban on all forms of gambling, along with Utah. All other states permit legal gambling in some form or another, whether that be charitable games, state lotteries or other games.

“We should remember that there’s already a lot of people in the state participating in gambling,” Keith-Agaran said. “The fact that we have direct flights to Las Vegas on every island should be emblematic of that.”

Keith-Agaran acknowledged that legalizing gambling has its pros and cons: Opponents often point to gambling’s addictive tendencies and the harm those tendencies can do to lower-income people. However, he went on, it also presents a potential source of revenue for a perpetually cash-strapped state.

“What we don’t want to do is rely on it,” Keith-Agaran said. “But I’m interested in finding funding for things like medical services in rural areas. Either we fund it with this, or we have to find the money somewhere else.”

In particular, the corporation would disburse 25% of all gambling proceeds to fill Department of Education shortfalls, and another 20% for DOE capital improvements. Another 20% would be allocated for University of Hawaii capital improvements.

Another 10% of the gaming proceeds would be granted to scholarship and loan-repayment programs for medical students who commit to practicing medicine in Hawaii for 10 years; another 10% would go toward the UH John A. Burns School of Medicine family practice rural residency program.

The remaining 15% of proceeds would be divided equally between watershed protection, administration costs and programs to reduce problem gambling.

Kona Sen. Dru Kanuha said the bills represent a “good effort” to generate revenue for programs that are consistently short on funding. The bills, he said, have a more thorough structure than similar attempts at gambling legalization that failed to succeed in the past.

“There are always different perspectives when considering new industries, and we’re on the right path with every measure and discussion we have regarding generating revenues and not increasing taxes on residents in Hawaii,” Kanuha said in an email.

Keith-Agaran said much of the opposition to gambling legalization has come from moral standpoints, but other concerns have been raised by representatives of the tourism industry.

“Visitor dollars are finite,” Keith-Agaran said, explaining that dollars that go to a casino could have instead supported local businesses and services.

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However, he continued, he hopes the bills will spark a serious conversation about the potential benefits of legalized gambling.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.

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