Tuesday, January 22, 2002

Moderate chance for
gambling in isles, study finds

Deutsche Bank says 9 states are debating gambling this year

By Richard Borreca

A new national study says Hawaii is one of nine states that are considering the gambling issue this year.

Hawaii, Maryland and Ohio are all rated as having a "moderate" chance of expanded gambling in 2002, according to a Deutsche Bank study. Florida, which has a highly successful lottery, Kansas and New Hampshire are ranked as "low."

New York, Kentucky and Pennsylvania are all rated as having a "high" chance, the study says.

Hawaii is the only one of the nine that does not now allow gambling, casinos or lotteries.

Meanwhile, the Michigan-based Ilitch group has been lobbying local community and labor groups, saying two casinos on Oahu would generate an additional $43 million in state taxes annually.

John Radcliffe, lobbyist for the Michigan group, has been showing a video presentation to the Building Trades Council, Hotel Workers, AFL-CIO and the Hawaii Government Employees Association but so far has been unable to secure any public commitments of support.

"The interest is high, but the willingness to take the risk and say OK is not nearly as high," he said.

He estimates that if the state permitted two casinos to operate on Oahu, they would generate $435 million, and the owners would be willing to give the state a minimum of 10 percent of the net earnings in tax payments.

Sun International Resorts, which is pitching a $1 billion development at Ko Olina, has also been meeting with community groups and tourism officials, according to a spokesman for the group.

Jim Boersema said Sun calculates the Ko Olina development would bring in new taxes of $85 million a year, including general excise, property, income and a special casino revenue tax.

"We are projecting a minimum 5,000 direct jobs at the resort and another (9,000) to 10,000 indirect jobs," Boersema said.

Both gambling proposals, however, have lacked a strong show of support in the Legislature and were hurt earlier this month when U.S. Sen. Daniel Inouye came out against any form of legalized gambling in Hawaii.

Deutsche Bank researchers Mark Mutkoski, Joel Simkins and Joshua Attie note there is wide acceptance of gambling in Hawaii, as long as it happens somewhere else.

It notes that Boyd Gaming Corp. makes a good profit by catering to people from Hawaii.

"We estimate that as much as 75 percent of the occupied room nights at Boyd's Downtown Properties come from Hawaiian customers," the report adds.

The report concludes that Hawaii is suffering from the post-Sept. 11 recession but still may not want to be drawn into a quick-fix solution such as gambling.

"Despite the perversely favorable backdrop for approval in 2002," the report said, "we believe that Hawaiians hold a NIMBY (not in my back yard) attitude and are still more comfortable flying to Las Vegas to gamble, rather than having casinos in their own state.

"We believe that politicians may not be willing to take a knee-jerk approach towards gaming in an election year," the report concluded.

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