Hawaii seeks to ban casino advertising, and tax gambling vacations
A Hawaii Senate committee has approved Senate Bill 935, filed by Sen. Stanley Chang which seeks to ban casino advertising in the state. The bill specifically made reference to the state of Nevada, and Boyd Gaming Corp properties – but in moving the bill to the full Senate, it has removed specific reference to Nevada and Boyd Gaming.
The initial bill stated that: ‘for the people of Hawaii, gambling is as popular as it is in the rest of the country, but it remains illegal within its borders. With no local venues or tax for gambling, Hawaii remains a target market for a growing number of jurisdictions where gambling is legal. Hawaii residents generate hundreds of millions of dollars, perhaps billions, in economic activity in other jurisdictions related to gambling, and in return, Hawaii receives no benefit.’
What does Hawaii Senate Bill 935 say?
Other points in the bill include:
- Hawaii residents take 300,000 trips to Las Vegas and other gambling destinations each year, with many residents making multiple trips per year
- In 2011 it was reported that Boyd Gaming earned $600 million from Hawaii annually
- In 2021 Boyd highlighted that Hawaiian customers comprised more than half of the room nights sold at The California, the Fremont and Main Street Station
- The prohibition of that which is legal nearly everywhere else costs Hawaii $1,000,000,000 per year in outgoing dollars and returns none
- Despite its prohibition Hawaii carries an economic burden from gambling
The bill had two main aims which were as follows:
- Prohibit advertisements for Nevada hotels, resorts, or other recreational services that promote casinos or gambling devices licensed by the Nevada Gaming Commission from being broadcast, televised, marketed in printed publications or displays, distributed online, or otherwise communicated by electronic means within the State; and
- Impose a general excise tax on persons engaged in the arrangement, provision, or sale within the State of vacation packages or other recreational services that promote gambling or gambling devices that is not prohibited by state law of thirty per cent of gross income due to that activity.
Hawaii is one of two states in the United States of America with no legalized gambling or lottery. It has consistently dismissed bills looking to legalize gambling of some sort, including Hawaii online sports betting and general casino. Instead of looking to legalize and generate state revenue from tax on gambling activities, the bill seeks to implement a tax on those that choose to indulge in gambling in different states.
Committee Chairman Jarrett Keohokalole, D-Kane‘ohe, said an entire section of the bill would be eliminated and a new section added that would establish a tax on trips to gambling destinations to fund the treatment of Hawaii residents with gambling addictions. Although the Senate’s Committee on Commerce and Consumer Protection voted 3-1 in favor of forwarding SB 935 to the full Senate, many recommended striking the bill as they believe it would not withstand a constitutional challenge and scrutiny under the First Amendment.
Boyd Gaming also provided written comment urging the committee to reject the bill and ordering correction to the aforementioned financials. The comment said: “SB935 will hurt the local economy and negatively impact local businesses and employees in the Hawaii advertising, hospitality, and airlines industries. Vacations Hawaii has various business partnerships and contracts with local advertisers and Hawaiian Airlines. These partners are local companies that employ thousands of Hawaii residents and generate significant impact to the state’s economy. SB 935 would likely force Vacations Hawaii to cancel these partnerships with local companies that are still recovering from the economic impacts of the COVID-19 pandemic, resulting in negative economic consequences.”
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