Kapolei Casino Proposal Narrowly Wins Hawaiian Homes Commission Approval

Posted on: December 23, 2020, 11:28h. 

Last updated on: December 23, 2020, 12:02h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

An effort by the Department of Hawaiian Home Lands (DHHL) to bring an integrated resort to the city of Kapolei on the island of Oahu scored its first victory Tuesday. It eked out a win before the Hawaiian Homes Commission (HHC).

Kapolei Casino
Hawaii Gov. David Ige. He’ll have a say on a casino plan after the Hawaiian Homes Commission (HHC) voted in favor of the idea. (Image: KHON2)

By a 5-4 vote, the commission passed a DHHL proposal seeking to build a gaming venue on Hawaiian Home Lands property zoned for commercial use. The HHC approval is the first step in what’s likely to be a lengthy, opposition-filled road to bring a casino to the stridently anti-gambling Aloha State.

The plan emerged last week, with DHHL saying it’s grappling with strained finances due to the coronavirus pandemic. It added that it needs to raise $6 billion to properly serve the more than 28,000 native Hawaiians that depend on the agency for housing.

The limited authorization of casino gaming would address the dire financial state of the department (DHHL) by ensuring the department is the primary beneficiary of the gaming operation through a lease agreement with the licensee and through direct collection of state tax payments on gross gaming revenue (GGR),” according to draft legislation submitted by the department to HHC.

The draft also calls for the establishment of the Hawaiian Gaming Commission, while providing details on a gaming license, related fees, and how that permit could be awarded.

Long Odds Remain

While gaining HHC approval is necessary and a step in the right direction, there are no assurances a casino will come to life in Hawaii. After all, the Aloha State is one of two – Utah is the other – that have no regulated gambling of any form. Hawaii doesn’t even have a lottery, underscoring the state’s long-held stance against gambling in any form.

With the HHC win, DHHL advances the integrated resort pitch to Gov. David Ige’s (D) legislative packet for 2021. The aforementioned legislative draft will be reviewed by Attorney General Clare Connors (D) and the Department of Budget & Finance.

Assuming Ige signs off on it, which is a big ask, the plan will move on to the state legislature, where it will certainly face opposition. Last week, Sen. Mike Gabbard (D-Kapolei, Makakilo, parts of Ewa, Kalaeloa, and Waipahu) said a casino in Kapolei or anywhere else in Hawaii is a bad idea, and that if the proposal comes to the floor, he plans to introduce legislation against it.

The state is dominated politically by Democrats. But Gabbard says the issue of preventing casinos and regulated gaming enjoys bipartisan support.

Making Its Case

In the draft bill, DHHL says that in 2015, Hawaii’s tourism industry generated $21.7 billion in economic activity, almost on par with the $22.8 billion in North Carolina. The department says the Tar Heel State got the benefit of $1.33 billion in gaming-related sales and $530 million in salaries, tips, and wages, despite being home to just two tribal casinos.

On that note, the department’s proposal could face tribal issues of its own, because the federal government doesn’t treat Native Hawaiians the same way it does Native Americans.

DHHL’s proposal doesn’t mention if the casino would be commercial or tribal.