House committee approves bill for shipboard gambling

Saturday, Feb. 12, 2000 | 9:58 a.m.

Despite its passage in the committee, the bill is considered a longshot to win passage from the full Legislature and the governor has said he opposes any effort to legalize gambling.

The bill would allow up to four ships to operate offshore casinos and would require casino operators to pay 12 percent taxes on their revenues, said Rep. Jerry Chang, the committee chairman.

Casino operators would pay the state a nonrefundable, upfront tax of $10 million a year, and that would exempt them from paying taxes on their first $83.3 million of revenue, since that would be covered by the $10 million payment, said Chang, D-South Hilo.

"If we have $10 million up front from each operator, and there's four operators, that's $40 million up front," he said. "There's a $10 admission charge that will go into that state gaming fund.

"If you base that on the amount of people that's already leaving Hawaii to go to Vegas a month, that's 40,000, that's $400,000 per month going into the coffers."

The state gaming fund would move 96 percent of the money into a special fund for education, 2 percent to a fund to provide help with gambling addictions and 2 percent to cover administrative costs.

None of the DOE's present budget would be affected by the bill, and money from gambling would only supplement money the state already pays to the department, Chang said.

The money would be used for school repairs and maintenance, allow for the start of a voluntary classes for 4-year-olds waiting to enter kindergarten and would provide a free University of Hawaii scholarship to any isle high school student who maintains a 3.0 grade-point average throughout high school.

"People can send their kids to school," Chang said. "This will give the youngster in high school the opportunity to look ahead and say, 'There is hope for me.' And the parents will be on them to make sure they study and get a 3.0 so that they can have a free college education."

Judy Rantala of the Hawaii Coalition Against Legalized Gambling isn't overly concerned about the bill making it out of the committee, since she believes there aren't enough votes to pass it out of the full House.

It's wrong for the state to fund the education of its children with gambling money, Rantala said.

"Is that the way we want to promote education?" she asked. "To tell our kids who are coming through are schools that we are going to gamble on their future?"

Rantala also was skeptical of claims that lawmakers would only use the money to supplement current education funding, saying such claims in other states have not held true.

"Money that goes to education gets withdrawn by the legislatures and there are some states in which only gambling is supporting education," she said. "I don't believe we, in the state of Hawaii, have the type of leadership now, and I fear in the future, that is going to stick to that kind of a provision, even if it is in there.

"It's too tempting to take the money out and use it for something else."

The bill now heads to a vote next week on the House floor and, if it passes there, it moves to the House Judiciary Committee, where Chang hopes gaming industry officials will provide input on whether they would be interested in working under the conditions laid out in the bill.

"Right now, we don't know," he said. "We've never met with any of them. We really need to get across the table with the industry, and find out if it is feasible."