1.14.2011
By Greg Wiles
...Hawaii is one of two states (Utah being the other) where some form of gambling isn’t allowed. More and more states have looked at expanding gambling as the recession punched a hole in their tax revenues.
Illinois is pushing for slot machines at racetracks to deal with a budget deficit, while questions have popped up about expanding gambling in Florida, Minnesota and elsewhere.
Legislators look at it as an easier way to raise revenues than increasing income or sales taxes, while opponents say the social and legal problems aren’t worth the budget fix. According to the American Gaming Association figures, commercial casinos generated $5.59 billion in taxes for state and local governments in 2009.
The question of starting a lottery, building a racing track or sanctioning casinos have been perennial issues at Hawaii’s state legislature with opponents winning annually over the efforts.
But this year the issue may receive more than a passing look given a glaring budget gap that’s been forecast. A study shows a casino could take a substantial bite out of the forecast deficit.
State projections show there’s a yawning $410.1 million hole between revenues and expenses during the coming fiscal year that begins in July.
In the following fiscal year – the one starting July 2012 and ending in June 2013 – legislators and Gov. Neil Abercrombie must come up with a way to close a $361.8 million chasm.
“There’s no doubt about it being an economic value,” said John Radcliffe, a former teacher who has held a number of union executive and private consulting positions and is now one of the Hawaii’s top lobbyists. Among his clients are gaming interests who’d like to see a casino in or near Waikiki.
“I know there are members of the legislature who are no longer opposed to it as they have been in the past.”
There are other reasons to believe gambling may receive more attention after the legislature starts up on Jan. 19.
Several legislators who opposed wagering have moved on, including former Senate President Colleen Hanabusa, now serving in the U.S. Congress, and Sen. Dwight Takamine, who has been nominated to head the state Department of Labor and Industrial Relations.
New Gov. Neil Abercrombie has voiced support for a lottery in the past, though has amended that position to say he doesn’t see a need for gambling to be explored at this time. Abercrombie spokeswoman Donalyn Dela Cruz said gambling hasn’t been on the table as discussions take place on what to do about the budget.
During Abercrombie’s campaign he released a position statement saying he was opposed to casino gambling and a state lottery because he believed there would not be a positive result for local residents.
“Neil is open to the possibility of joining existing multi-state lotteries if they would be willing to offer Hawaii specific prizes,” the position statement said.
“However, Neil does not believe that gambling in any form needs to be explored right now.”
Radcliffe, who has served as consultant to prior governors and helped with Abercrombie’s past campaigns and his recent transition team, is hoping Abercrombie reconsiders.
“I don’t believe the Governor has a moral objection to gaming,” said Radcliffe. “His objections to gaming have more to do with whether or not it’s good policy.”
Radcliffe points to other factors, including rising discourse about the ability of state government to function and provide services given cuts that have occurred. Some legislators don’t see a way to cut big numbers from the budget.
Moreover, there’s the long-time argument that Hawaii is exporting some residents’ hard-earned cash to Las Vegas casinos and other Mainland states where gambling is allowed. Vegas is one of the top destinations for Hawaii travelers, with special vacation packages and charter flights.
Radcliffe contends Hawaii loses hundreds of millions of dollars to gambling enterprises on the Mainland annually.
A study done last year for Radcliffe’s client, a casino group from Detroit owed by the Ilitch family of Little Caesars Pizza fame, estimates a single, free-standing casino could bring in $86.2 million during its first year, when a gaming fee, employee income taxes, indirect patron spending and related taxes are considered.
The study also includes a projection showing there would be 5.87 million visits to a casino, with 2.83 million of those coming from Hawaii residents. Roughly 623,000 of the visits would come from incremental tourism business, or people who will vacation here because of the casino availability.
The number of jobs created at a casino and off-site is estimated at 9,377. When a multiplier effect is used, the number jumps to 14,065.
Radcliffe said a casino might prove to be the answer for millions in operating losses racked up by the Hawaii Convention Center if the site could be converted into a gaming facility. Moreover, tax revenue from the operation could provide a funding source for Native Hawaiian programs such as the Department of Hawaiian Home Lands... (Complete Story)
The model they've been pushing for a decade is similar to that Detroit voters approved in the mid 1990s and would end up with a single casino located desirably on Waikiki Beach and governed by a gambling control board or gaming commission.
The Detroiters Radcliffe represents (a syndicate organized by controversial wheeler-dealer Michael Malik and Mrs. Marian Ilitch) were among those behind the 1990s effort that got voter approval to develop and operate three Las Vegas-style gambling halls in downtown Detroit. Voters there were told the casinos would provide new revenues to improve a city that was struggling. Ten years later, and by most standards and accounts, Detroit is now the worst big city in North America. And while most Detroiters are worse off, those behind the gambling syndicate are worth a whole lot more.
The gambling study they reference in this article was first commissioned by the Detroiters in 2000 when they started lobbying for commercial gambling in Hawaii. Jake Miklojcik, author of the study, is among the Detroiters' stable of consultants and third party advocates who often shows up wherever they are. Do a Google search and you'll see him involved where they are pushing gambling.
