Sunday, February 3, 2002
The odds that this year's Legislature will legalize gambling may be off the board, but don't bet on the issue going away.
Casino owners say Hawaii
is a winner and they're
determined to get in the gameBy Lee Catterall
lcatterall@starbulletin.comA Bahamas company that builds and operates casino resorts has set its sights on Hawaii as its premier location. "They're looking at the long term," said Jim Boersema, a Honolulu public-relations agent who represents Sun International Resorts, which proposes building a $1 billion resort with a casino at Ko Olina on Oahu's Leeward Coast.
John Radcliffe, who has been lobbying for a Detroit group that seeks to open stand-alone casinos in Waikiki and Ko Olina, agrees the pro-gambling effort this year is only the beginning.
Dorothy Bobilin, who heads the Hawaii Coalition Against Legalized Gambling, warns that allowing any gambling in the islands will be the proverbial foot in the door, leading to more casinos and other forms of gambling. "There's no way you would limit it," Bobilin asserts. "I think it's a moot question, because it has never happened that way anywhere."
Opponents of legalizing gambling contend it would result in crime by compulsive gamblers, boost welfare rolls, create domestic problems, lure the mafia and Japan's yakuza, attract prostitution, require more law enforcement and trash Hawaii's attempt to attract families that they consider the backbone of the state's tourist industry. A Star-Bulletin and KITV-4 poll a year ago showed that 40 percent of respondents would not support legalized gambling.
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Boersema disagrees with the opponents and sees Sun's proposal as a "test" to determine, "after a couple of years, whether it is a problem or not a problem." None of the states that have legalized gambling, he points out, have backtracked to any large degree."If the negatives outweigh the benefits," he says, "these people would take some sort of action to do something. The people in those states are just as savvy, just as concerned about their communities, as we are."
Sun International owns the 2,300-room Atlantis Resort and Casino in the Bahamas, operates resort hotels on the Indian Ocean islands of Mauritius and Maldives and in the United Arab Emirates, and has developed a casino resort for the Mohegan Indian tribe in Connecticut.
The Detroit group, including owners of the MotorCity casino, is urging the Hawaii Legislature to authorize two casinos that would cater mostly to guests of nearby hotels.
Bobilin contends that the negative social, and ultimately economic, consequences would be even greater than the benefits. "For every dollar we would get in tax money," she says, "it's going to cost us $3 in economic and social costs." Much of that, she says, would come from the downfall of problem and pathological gamblers, who outnumber gambling industry employees nationally 22 to one.
Gamblers who are unable to control their urge to bet and those who share some traits but don't reach the same threshold account for 2.7 percent to 5.4 percent of the nation's adult population, according to research done for the congressional National Gambling Impact Study Commission, which issued a 1999 report heralded by advocates on both sides of the issue. (Most studies are discredited by one side as biased toward the other.)
The prevalence of such gamblers, however, doubled in areas within 50 miles of gambling facilities, according to the report, and they account for 15 percent of dollars lost gambling. The National Opinion Research Center at the University of Chicago reported that more than 13 percent of casinos' customers met the criteria.
The center estimated the yearly societal cost to be $1,200 per pathological gambler and $715 per problem gambler, including job loss, unemployment and welfare benefits, poor physical and mental health and treatment.
Boersema brushes that off: "Every society throughout history has got at-risk people. We know they're there. You're never going to get rid of them. People who want to gamble in Hawaii already can do it all they want on the Internet or taking trips or maybe there's illegal stuff."
Radcliffe adds, "The anti-gambling people say it leads to divorce and brutalization of women and almost anything scary. There are social consequences to everything."
State gambling laws provide for treating problem and pathological gamblers and for related research, and bills before the Hawaii Legislature are similar. However, the $20 million allocated by states for such purposes amounts to only one-tenth of 1 percent of what they receive in tax revenue from gambling.
Bobilin is also concerned about regulation of casinos, which she says has been "ineffective and corrupt" elsewhere, and about crime related to gambling.
One-third of the problem and pathological gamblers have been arrested, compared with 4 percent of non-gamblers. Beyond that, however, the commission found that "tracing the relationship between crime and gambling has proven difficult." Views that crime rates rise around legalized gambling "are troubling and demand greater research, clarity and knowledge."
Boersema bristles at the suggestion of corruption. "The biggest gambling company in the whole country is Hilton (through its Park Place entertainment division)," he says. "Hilton, MGM, these companies are Fortune 500 stock-exchange companies. They're not run by the mafia. Sun is a stock-exchange company. There are no gangsters in it."
Radcliffe says that crime might even decrease because of the economic boost that gambling could provide. He says economists hired by the Detroit group estimated that its proposed casinos would bring in $435 million a year, $700 million when jobs and business around the casinos are included.
Boersema says Sun estimates that its Ko Olina resort and casino would generate $70 million to $100 million in annual tax revenue for Hawaii, creating 5,000 jobs directly and up to double that many indirectly. He says the resort could be the "economic engine" to turn Kapolei from a bedroom community to the "second city" that has long been planned. Seven hotels were planned for Ko Olina a decade ago, but only one has been built and ground was broken only recently for construction of a second.
The congressional study found that casinos had given an economic boost to depressed areas plagued with joblessness and under-employment, and it heard praise of gambling from the mayors of Atlantic City and cities in Indiana, Iowa, Illinois and Mississippi.
The commission had doubts, however, about the supposed casino-inspired "Mississippi Miracle," finding that the unemployment rate in that state had declined by about the same rate as the national average from 1992 to 1998, while the mainland was in the midst of a prosperity.
Elsewhere, some small-business owners told the commission about their loss of businesses when casinos came to town. One said that in Atlantic City, only 66 of the 311 taverns and restaurants that existed in 1978, when the first casino opened, remained 19 years later.
Boersema said his opponents unfairly point to Atlantic City or Las Vegas in sounding the alarm about the down side of gambling. "Those are gambling destination cities," he says. "That's not what we would want in Hawaii at all. It's absolutely the wrong thing for Hawaii. Nobody's going to fly here to gamble. Hardly anybody flies to the Bahamas to gamble."
For that reason, Boersema says, he doubts that one or two casinos would result in proliferation of gambling. "I really think that if you have two casinos on this island, they're going to make money," he says. "If you have five casinos on this island, they're all going to lose money."
Nor, he says, would it change any image Hawaii might enjoy as a vacation spot for families -- an image that both Boersema and Radcliffe say is false. At Sun's Atlantis resort, Boersema says, a survey found that only 7 percent of the guests listed gambling as a reason for coming to the Bahamas; 52 percent said they had children under 12.
He says; "Walk down Kalakaua at night and tell me how many kids you see. Go to my client Mauna Lani on the Big Island or Hilton Waikoloa or Princeville, tell me how many kids you see. We're a destination for retired people, young couples. We're not a family destination."
"Hawaii's not much of a place for families now," Radcliffe agrees. "If you want to take your family someplace, take them to Vegas. There's a lot more stuff for kids to do. Here we've got the ocean and the beach."
A state survey last year found that two-thirds of the visitors to Hawaii from the mainland were accompanied by spouses and one-fourth by children. Nearly 40 percent of Japanese visitors were with their spouses and 39 percent brought their children. Their activities -- in order of popularity -- included shopping, sightseeing, swimming or snorkeling, visiting historical spots or cultural attractions and attending nighttime entertainment.
Whatever the Legislature does, Boersema says his client will not throw in the towel. "I asked them this, and they said, 'Look, we're resort builders. Hawaii is the magic name in the travel industry. If we could bring a great resort here, that would be our flagship resort."
