Bill places gambling, Hawaiian Homes budget on the table for discussion

HONOLULU—On February 9, the House Committee on Judiciary passed an amended version of a bill that would authorize the Hawaiian Homes Commission to build and operate casino gaming facilities on Hawaiian Home Lands under the condition that revenue from these gaming operations be reinvested into the State’s general fund and Department of Hawaiian Home Lands (DHHL) Trust Fund.

Under House Bill 2759, the Hawaii Gaming Commission would be created to regulate casino gaming operations.

The bill calls for 80 percent of income created to go toward the DHHL trust and 20 percent to go into the State general fund.

The amendments made to the bill clarify that the Hawaiian Home Lands Gaming and Hawaiian Home Lands Commissions would be required to do beneficiary consultation before a casino and resort gaming facility is built. 

“As this bill moves forward, we want to make sure that there aren’t a lot of resort casinos on Hawaiian Home Lands, but possibly one or two, with the consent of the beneficiaries, if that is their will,” said House Committee on Hawaiian Affairs chair Rep. Mele Carroll, who introduced HB 2759.

Carroll heard testimony in her committee last week.

“I support this legislation because it will help everyone in Hawaii, but most importantly the poe kanaka,” said Kale Gumapac, Alakai for Kanaka Council Moku O Keawe, in testimony. “We have the worst health, highest numbers in prisons, homelessness, welfare, housing, education and social issues. I believe [HB 2759] will help to fix these problems as well as reduce the financial responsibility of the State.”

DHHL testified that they have only been able to put between 500 to 1,000 beneficiaries on the waitlist for land per year. Although the state has provided $30 million each year in their budget as a result of 1995’s Act 14, which addressed a $600 million dollar settlement due to native Hawaiians, DHHL said that their waitlist has tripled to nearly 25,000 applicants. That $30 million per year, however, has only been allocated by the State for five more years.

“I’m worried that once the $30 million allocation goes away in 2015, DHHL will not be able to meet their obligation [to native Hawaiian beneficiaries] and therefore, the State will have to look for other means of making up the $30 million including raising taxes,” Carroll said. “While I’m not attached to the idea of gaming, DHHL testified that they don’t have an aggressive plan to create revenues to fulfill Article XII section 1 of the Hawaii State Constitution, which says that the State has a fiduciary responsibility to provide adequate funding to place native Hawaiians on their lands. The properties that DHHL have leased out to non-native Hawaiians for commercial purposes are not enough. [Hawaiian Homes Commission chair] Kaulana Park has estimated that the DHHL operating budget is $18 million dollars, whereas their current revenues from commercial leases are generating only $12 million.”

John Radcliffe, President of Capitol Consultants of Hawaii, LLP, testified in support of the bill. He described how casinos built by the Pottawatami tribe in Wisconsin provide a successful model for Hawaii.

“Native tribes own the casinos and profit from that ownership, but many thousands of non-Native Americans are employed in them, or service them in some way,” Radcliffe said. “The rising tide of wealth and health for the Native Americans in Wisconsin has brought the rest of the population up as well.”

Others who spoke on the Wisconsin example stated that unemployment rates decreased over 45 percent and tribe members were able to restore much of their land ownership.

“Like the native American Indians in America, there are tribes that have been successful in their efforts of gaming and reinvest their revenues to take care of their affordable housing shortages, health and human services programs, education, management of natural resources, and native business entrepreneur programs,” Maui resident David Kamai stated in testimony.

Supporters of the bill also included in their testimony the decade-long case of Kalima vs. DHHL, saying that there were many on the waitlist since 1959 that did not receive an opportunity to get onto the lands in their lifetime. On November 2009, First Circuit Judge Eden Elizabeth Hifo ruled that the DHHL is required to place Native Hawaiians on lands set aside for them by the federal government in a prompt and efficient manner. Hifo’s decision meant that the State could owe unspecified millions of dollars in damage to more than 2,700 Hawaiians who have been waiting for land.

“I am open to anyone’s suggestions in creating revenues for DHHL because right now, no one has stepped up to the plate and offered solutions to this devastating situation,” Carroll said. “The discussion is good, and if this bill doesn’t get out and no other alternatives are offered, we may need to consider raising taxes as a solution to DHHL’s dilemma. At this time, everything is on the table for discussion.”

Despite foreseeable funding concerns, opposition to HB 2759 includes DHHL and the Hawaiian Homes Commission.

“While we appreciate the author’s intent to provide financial support to DHHL, this type of activity is a departure from our current activities to generate revenue from our non-homestead lands,” said Hawaiian Homes Commission chair Kaulana Park in testimony. “DHHL is concerned about the potential disadvantages associated with gaming like negative impacts to local businesses, difficulties with and cost of regulation, and social costs which may unintentionally cause a negative impact to our beneficiaries and the state.”

Other groups concerned about negative social impacts of gambling include the Honolulu Police Department, Hawaii Family Forum, and the Hawaii Coalition Against Legalized Gambling, which includes over 40 local organizations.

“In keeping with our conviction of sustaining and enriching communities, we strongly oppose all forms of gambling,” said Susan Dowsett, Major of the HPD’s Narcotics/Vice Divisions, in testimony. “We are convinced that gambling exploits those who can least afford it and undermines community values. Socioeconomic costs include unemployment benefits, welfare benefits, physical and mental health problems, theft, embezzlement, bankruptcy, suicide, child abuse and neglect, domestic abuse, divorce, incarceration, work absences, and homelessness.”

Hawaii resident John Karbens testified that it was difficult to support HB 2759 without having information on the percentage of tax on gross revenues that will be assessed on a casino (which affects gambler payouts), the location and hours of any proposed casinos, and the costs for the construction and enforcement of crimes associated with gambling.

HB 2759 moves on to be heard by the House Committee on Finance.