HB2762 HD1

SECTION 1. The legislature finds that the downstream economic and social benefits of integrated resort development have been demonstrated globally in diverse locations such as Macau, Singapore, the Bahamas, and many states in the United States. In addition to enhancing existing tourism and infrastructure, an integrated resort that includes limited casino gaming will increase state revenue from a new wagering tax along with traditional sources like the general excise tax and transient accommodations tax. Evidence from over two hundred individual gaming facilities on federal trust lands in twenty-nine states demonstrates significant economic activity through:

(1) Expenditures by casinos and their suppliers;

(2) Job creation in the integrated resort and new businesses stimulated by increases in tourism, state government, education, and suppliers to the integrated resort;

(3) Wages paid to employees of the integrated resort and all impacted businesses;

(4) Taxes on all taxable economic activity; and

(5) Direct gaming-related payments to the state and local governments.

The legislature further finds that as a global tourism destination, Hawaii would realize similar economic and social benefits through operation and licensing of a single integrated resort that includes limited casino gaming on lands under the control of the office of Hawaiian affairs. For example, 2015 estimates for travel spending for the State were $21,700,000,000. By comparison, 2015 estimates for travel spending for the State of North Carolina were $22,800,000,000. In 2014, North Carolina, a state with only two tribally-operated gaming facilities, realized:

(1) $1,330,000,000 in sales tied to gaming;

(2) 11,730 jobs directly related to gaming, resulting in $530,000,000 in salaries, wages, bonuses, tips, and benefits from those jobs; and

(3) $205,000,000 in tax revenue and direct payments from tribal governments to federal, state, and local government.

Impacts from integrated resort development, particularly on tribal lands, depend on several factors and market conditions. However, the opportunity and potential for increased revenue to the office of Hawaiian affairs and the State will provide Native Hawaiians and other residents economic growth never before seen in the State. The limited authorization of casino gaming would help the office of Hawaiian affairs in its mission to better the conditions of Native Hawaiians by ensuring that the office is the primary beneficiary of the gaming operation through a lease agreement with the licensee and through direct collection of a percentage of the state tax payments on gross gaming revenue.

The purpose of this Act is to authorize limited casino gaming in the form of a single integrated resort property on lands under the control of the office of Hawaiian affairs designated for commercial use on the island of Oahu, excluding lands west of Ko Olina.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

casino gaming

§ -1 Limited casino gaming authorized. Casino gaming and a system of wagering incorporated therein are authorized only to the extent that they are conducted in accordance with this chapter. In case of any conflict between this chapter and any other law regarding casino gaming, this chapter shall prevail. This chapter and the rules adopted by the commission shall apply to all persons who are licensed or otherwise participate in gaming as allowed under this chapter.

§ ‑2 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Agent" means any person who is employed by any agency of the State other than the commission who is assigned to perform full-time services on behalf of or for the benefit of the commission regardless of the title or position held by that person.

"Applicant" means any person who applies for a license under this chapter.

"Casino gaming", "limited casino gaming", or "casino gaming operation" means the operation of games conducted pursuant to this chapter as part of an integrated resort with a gaming license authorized by the commission.

"Chairperson" means the chairperson of the Hawaii gaming commission.

"Commission" means the Hawaii gaming commission.

"Conflict of interest" means a situation in which the private interest of a member, employee, or agent of the commission may influence the judgment of the member, employee, or agent in the performance of the member's, employee's, or agent's public duty under this chapter. "Conflict of interest" includes but is not limited to:

(1) Any conduct that would lead a reasonable person, knowing all of the circumstances, to conclude that the member, employee, or agent of the commission is biased against or in favor of an applicant;

(2) Acceptance of any form of compensation other than from the commission for any services rendered as part of the official duties of the member, employee, or agent of the commission; or

(3) Participation in any business being transacted with or before the commission in which the member, employee, or agent of the commission or the member's, employee's, or agent's parent, spouse, or child has a financial interest.

"Executive director" means the executive director of the commission.

"Financial interest" or "financially interested" means any interest in investments, awarding of contracts, grants, loans, purchases, leases, sales, or similar matters under consideration or consummated by the commission or holding a one per cent or more ownership interest in an applicant or a licensee. For purposes of this definition, a member, employee, or agent of the commission shall be considered to have a financial interest in a matter under consideration if:

(1) The individual owns one per cent or more of any class of outstanding securities that are issued by a party to the matter under consideration or consummated by the commission; or

(2) The individual is employed by or is an independent contractor for a party to the matter under consideration by the commission.

"Gambling" means the playing of a game by a patron of a casino gaming operation.

"Game" means a banking or percentage game played with cards, dice, tiles, or dominoes or an electronic, electrical, gaming device, or mechanical device or machine played for money, property, checks, or any other representative of value that has been approved by the commission.

"Gaming" means dealing, operating, carrying on, conducting, maintaining, or exposing any game for pay.

"Gaming device" or "gaming equipment" means an electronic, electrical, or mechanical device or machine used in connection with gaming or a game.

"Gaming license" means the license issued by the commission that allows the gaming licensee to operate an integrated resort.

"Gaming licensee" means a person or entity who holds a gaming license from the Hawaii gaming commission.

"Gross gaming revenue" means the total of:

(1) Cash received or retained as winnings by a gaming licensee; and

(2) Compensation received for conducting any game in which a gaming licensee is not party to a wager.

"Individual" means a natural person.

"Integrated resort" means a destination resort property that offers a wide variety of leisure and entertainment products besides casino gaming, including but not limited to restaurants, convention services, golf or other outdoor activities, pools and spas, retail, aquariums, theme parks, movie and live theaters, museums, and sporting events.

"Managerial employee" means a person who holds a policy making position with the commission or any licensee under this chapter.

"Occupational license" means a license issued by the commission to a person to perform an occupation relating to casino gaming in the State that the commission has identified as an occupation that requires a license.

"Office" means the office of Hawaiian affairs.

"Person" means an individual, association, partnership, estate, trust, corporation, limited liability company, or other legal entity.

"Supplier" means a person that the commission has identified under rules adopted by the commission as requiring a license to provide goods or services regarding the realty, construction, maintenance, or business of a proposed or existing integrated resort on a regular or continuing basis, including security businesses, manufacturers, distributors, persons who service gaming devices or gaming equipment, garbage haulers, maintenance companies, food purveyors, and construction companies.

"Supplier's license" means a license that authorizes a supplier to furnish any equipment, devices, supplies, or services to a licensed integrated resort permitted under this chapter.

"Wagerer" means a person who gambles as authorized under this chapter.

§ ‑3 Hawaii gaming commission. (a) There is established the Hawaii gaming commission, which shall be a body corporate and a public instrumentality of the State, for the purpose of implementing this chapter. The commission shall be placed within the office for administrative purposes only. The office shall not direct or exert authority over the day-to-day operations or functions of the commission. The commission shall consist of five members as follows:

(1) One member of the office, to be appointed by the administrator of the office; and

(2) Four members to be appointed by the governor subject to the advice and consent of the senate under section 26-34; provided that:

(A) At least one of the members shall have knowledge, experience, and expertise in the area of native Hawaiian cultural practices;

(B) One member shall have experience in corporate finance and securities;

(D) One member shall have experience in legal and policy issues related to gaming; and

(E) One member may have professional experience in gaming regulatory administration or gaming industry management.

Appointments of initial commission members shall be made within one year of the effective date of this Act. The commission shall select a chairperson from among its members by a two‑thirds vote.

(b) No person shall be appointed as a member of the commission or continue to be a member of the commission if the person:

(1) Is an elected state official;

(2) Is licensed by the commission pursuant to this chapter or is an official of, has a financial interest in, or has a financial relationship with, any casino gaming operation subject to the jurisdiction of the commission pursuant to this chapter;

(3) Is related to any individual within the second degree of consanguinity or affinity who is licensed by the commission pursuant to this chapter; or

(4) Has been under indictment for, convicted of, pled guilty or nolo contendere to, or forfeited bail for a felony or a misdemeanor involving gambling or fraud under:

(A) The laws of this State, any other state, or the United States within the ten years prior to appointment; or

(B) A local ordinance in a state involving gambling or fraud that substantially corresponds to a misdemeanor in that state within the ten years prior to appointment.

(c) The term of a commission member shall be four years or until a successor is appointed. Each commission member shall be eligible for reappointment; provided that no commission member shall serve more than eight years. Vacancies in the commission shall be filled for the unexpired term in the same manner as the original appointments; provided that the governor shall have ninety days following the occurrence of a vacancy to appoint a successor member. An individual appointed to fill a vacancy shall serve only for the duration of the unexpired term. The governor may remove a commission member for cause if the commission member:

(1) Is guilty of malfeasance in office;

(2) Substantially neglects the duties of a commission member;

(3) Is unable to discharge the powers and duties of the commission member's office;

(4) Commits gross misconduct; or

(5) Is convicted of a felony.

(d) Each member of the commission shall be a resident of the State and, while serving on the commission, shall not:

(1) Hold or be a candidate for federal, state, or county elected office;

(2) Hold an appointed office in a federal, state, or county government, except for the representative from the office of Hawaiian affairs; or

(3) Serve as an official in a political party.

(e) The commission, subject to chapter 92, shall hold at least one meeting in each quarter of the State's fiscal year. The commission shall hold its initial meeting within one year of the effective date of this Act. Special meetings may be called by the chairperson or any three members upon seventy-two hours written notice to each member. Three members shall constitute a quorum to conduct business. Any action to vote or make a final determination shall require a majority vote of all members to which the commission is entitled. The commission shall keep a complete and accurate record of all its meetings.

(f) The commission members shall serve on a part-time basis. For each hour engaged in the official duties of the commission, each member of the commission shall be paid an hourly wage based on the hourly wage paid to the administrator of the office; provided that compensation shall not exceed eighty per cent of the total regular working hours in a month. Members shall not be entitled to any vacation, sick leave, or other benefits except as provided in this section. All members shall receive their necessary expenses for travel and incidentals that shall be paid from appropriations provided the commission for such purposes.

(g) Before assuming the duties of office, each member of the commission shall take an oath that the member shall faithfully execute the duties of office according to the laws of the State.

(h) The commission shall appoint an individual to serve as the executive director of the commission, who shall be subject to the commission's supervision. The commission shall appoint an interim executive director within ten days of the commission's initial meeting who shall be exempt from paragraphs (3) and (4) such that the interim executive director may be a current public employee or regulatory official from a similar body in another state who temporarily undertakes the role of interim executive director. The executive director shall:

(1) Hold office at the will of the commission;

(2) Be exempt from chapters 76 and 89;

(3) Devote full time to the duties of the commission;

(4) Hold no other office or employment;

(5) Perform any and all duties that the commission assigns; and

(6) Receive an annual salary at an amount set by the commission and be reimbursed for expenses actually and necessarily incurred in the performance of the executive director's duties.

(i) Except as otherwise provided by law, the executive director may:

(1) Hire assistants, other officers, and employees, who shall be exempt from chapters 76 and 89 and who shall serve at the will of the executive director; and

(2) Appoint committees and consultants necessary to carry out the functions and duties of the commission under this chapter; provided that no person shall be hired or appointed under this subsection who:

(A) Is an elected state official;

(B) Is licensed by the commission pursuant to this chapter or is an official of, has a financial interest in, or has a financial relationship with, any casino gaming operation subject to the jurisdiction of the commission pursuant to this chapter;

(C) Is related to any individual within the second degree of consanguinity or affinity who is licensed by the commission pursuant to this chapter; or

(D) Has been under indictment for, convicted of, pled guilty or nolo contendere to, or forfeited bail for a felony or misdemeanor concerning gambling or fraud under:

(i) The laws of this State, any other state, or the United States within the last ten years; or

(ii) A local ordinance in any state involving gambling or fraud that substantially corresponds to a misdemeanor in that state within the ten years prior to employment.

(j) The salaries of employees hired pursuant to subsection (i) shall be set by the executive director.

(k) The commission shall adopt rules in accordance with chapter 91 establishing a code of ethics for its employees that shall include restrictions on which employees are prohibited from participating in or wagering on any casino gaming or casino gaming operation subject to the jurisdiction of the commission. The code of ethics shall be separate from and in addition to any standards of conduct set forth pursuant to chapter 84.

§ ‑4 Records; staff. The executive director shall keep records of all proceedings of the commission and shall preserve all records, books, documents, and other papers belonging to the commission or entrusted to the commission's care in accordance with document retention policies of the state archives.

§ ‑5 Powers of the commission. (a) The commission shall have all powers necessary to supervise all casino gaming operations fully and effectively in the State, including the power to:

(1) Administer, regulate, and enforce the system of casino gaming established by this chapter. The commission's jurisdiction shall extend to every person, association, corporation, partnership, trust, and any other entity with a financial interest in or holding a license under this chapter, or that is required under this chapter to hold a license in casino gaming operations in the State;

(2) Issue a gaming license to operate an integrated resort pursuant to this chapter;

(3) Determine the types and numbers of occupational licenses and supplier's licenses to be issued under this chapter;

(4) Adopt standards for the licensing of all persons under this chapter subject to the qualification and standards set forth in this chapter; issue licenses; and establish and collect fees for these licenses;

(5) Provide for the collection of all taxes imposed pursuant to this chapter and collect, receive, expend, and account for all revenues derived from casino gaming;

(6) Enter at any time without a warrant and without notice a gaming licensee; the premises, offices, integrated resort, or other places of business of a gaming or supplier's licensee, where evidence of the compliance or noncompliance with this chapter or rules adopted under this chapter is likely to be found; provided that entry is authorized to:

(A) Inspect and examine all premises wherein casino gaming or the business of gaming or the business of a supplier is conducted, or where any records of the activities are prepared;

(B) Inspect, examine, audit, impound, seize, assume physical control of, or summarily remove from the premises all books; ledgers; documents; writings; photocopies or correspondence records; videotapes, including electronically or digitally stored records; money receptacles, other containers, and their contents; equipment in which the records are stored; or other gaming related equipment and supplies on or around the premises including counting rooms;

(C) Inspect the person and inspect, examine, and seize personal effects present in an integrated resort licensed under this chapter or any holder of a licensed integrated resort; and

(D) Investigate and deter alleged violations of this chapter or rules adopted under this chapter;

(7) Investigate alleged violations of this chapter or rules adopted under this chapter and take appropriate disciplinary action against a gaming licensee or a holder of an occupational license or supplier's license for a violation, or institute appropriate legal action for enforcement, or both;

(8) Be present, through its inspectors and agents, any time casino gaming operations are conducted in an integrated resort for the purpose of certifying the gaming licensee's revenue, receiving complaints from the public, and conducting other investigations into the conduct of the casino gaming and maintenance of the equipment as the commission may deem necessary and proper from time to time;

(9) Adopt appropriate standards for an integrated resort and gaming devices;

(10) Require that records, including financial or other statements of a gaming licensee, under this chapter be kept in the manner prescribed by the commission and that a licensee involved in the ownership or management of casino gaming operations submit to the commission:

(A) An annual balance sheet and profit and loss statement;

(B) A list of the stockholders or other persons having a five per cent or greater beneficial interest in the gaming activities of the licensee; and

(11) Conduct hearings, issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, and other pertinent documents, and administer oaths and affirmations to the witnesses, when, in the judgment of the commission, it is necessary to administer or enforce this chapter. The executive director or the executive director's designee may issue subpoenas and administer oaths and affirmations to witnesses;

(12) Eject or exclude, or authorize the ejection or exclusion of, any individual from an integrated resort where the individual is in violation of this chapter or where the individual's conduct or reputation is such that the individual's presence within the integrated resort, in the opinion of the commission, may call into question the honesty and integrity of the casino gaming operation or interfere with the orderly conduct thereof or any other action that, in the opinion of the commission, is a detriment or impediment to the casino gaming operation; provided that the propriety of that ejection or exclusion shall be subject to subsequent hearing and determination by the commission as prescribed by rules;

(13) Permit a gaming licensee of a casino gaming operation to use a wagering system whereby wagerers' money may be converted to tokens, electronic cards, or chips that shall be used only for wagering within the integrated resort;

(14) Suspend, revoke, or restrict licenses or require the removal of a licensee or an employee of a licensee for a violation of this chapter or rule or for engaging in a fraudulent practice;

(15) Impose and collect fines against a licensee for each violation of this chapter or any rule adopted by the commission or for any other action that, in the commission's discretion, is a detriment or impediment to casino gaming operations;

(16) Establish minimum levels of insurance to be maintained by a licensee;

(17) Employ, in addition to persons hired under section ‑3(i), any personnel who may be necessary to carry out its duties under this chapter;

(18) Delegate the execution of any of its powers for the purpose of administering and enforcing this chapter; and

(19) Adopt rules pursuant to chapter 91 to implement this chapter;

(b) Rules adopted under this chapter may include but are not limited to rules that:

(1) Govern, restrict, approve, or regulate casino gaming authorized by this chapter;

(2) Promote the safety, security, and integrity of casino gaming authorized by this chapter;

(3) License and regulate, consistent with the qualifications and standards set forth in this chapter, persons participating in or involved with casino gaming authorized by this chapter; and

(4) Authorize any other action that may be reasonable or appropriate to enforce this chapter and rules adopted under this chapter.

§ ‑6 Member, employee, or agent of the commission; conduct generally. (a) By January 31 of each year, each member of the commission shall prepare and file with the commission a disclosure form in which the member shall:

(1) Affirm that the member or the member's spouse, parent, child, or child's spouse is not a member of the board of directors of, financially interested in, or employed by a licensee or applicant;

(2) Affirm that the member continues to meet all other criteria for commission membership under this chapter or the rules adopted by the commission;

(3) Disclose any legal or beneficial interest in any real property that is or may be directly or indirectly involved with casino gaming operations authorized by this chapter; and

(4) Disclose any other information that may be required to ensure that the integrity of the commission and its work is maintained.

(b) By January 31 of each year, the executive director shall prepare and file with the commission a disclosure form in which the executive director shall:

(1) Affirm the absence of financial interests prohibited by this chapter;

(2) Disclose any legal or beneficial interest in any real property that is or may be directly or indirectly involved with gaming or casino gaming operations authorized by this chapter;

(3) Disclose whether the employee or the employee's spouse, parent, child, or child's spouse is financially interested in or employed by a supplier's licensee, or an applicant for a supplier's license, under this chapter; and

(4) Disclose any other information that may be required to ensure that the integrity of the commission and its work is maintained.

(c) A new or current employee or agent of the commission shall obtain written permission from the executive director before continuing outside employment held at the time the employee begins to work for the commission. Permission shall be denied, or permission previously granted shall be revoked, if the nature of the work is considered to be a conflict of interest or creates a possible conflict of interest with the commission or otherwise interferes with the duties of the employee or agent of the commission.

(d) An employee or agent of the commission granted permission for outside employment shall not conduct any business or perform any activities, including solicitation, related to outside employment on premises used by the commission or during the employee's working hours for the commission.

(e) As used in this section:

"Outside employment" includes the following:

(1) Operation of a proprietorship;

(2) Participation in a partnership or group business enterprise; or

(3) Performance as a director or corporate officer of any for-profit corporation or banking or credit institution.

§ ‑7 Authorization of limited gaming. Casino gaming shall only be allowed in one integrated resort on lands under the control of the office designated for commercial use on the island of Oahu, excluding lands west of Ko Olina. Any application for a gaming license to operate the integrated resort shall include a development plan for the integrated resort.

§ ‑8 Gaming license; application; fee. (a) The application for a gaming license under this chapter shall be made under oath on forms required by this chapter and shall include all of the following:

(1) The name, business address, telephone number, social security number, and, where applicable, federal tax identification number of the applicant;

(2) The identity of any business in which the applicant has an equity interest of more than five per cent, including, if applicable, the state of incorporation or registration. If the applicant is a corporation, partnership, or other business entity, the applicant shall identify any other corporation, partnership, or other business entity in which it has an equity interest of more than five per cent, including, if applicable, the state of incorporation or registration;

(3) An explanation of whether the applicant has developed and opened a new land-based casino within a jurisdiction in the United States that previously did not allow gaming, including a description of the casino, the casino's gross revenue, and the amount of revenue the casino has generated for state and local governments within that jurisdiction;

(4) A statement of whether the applicant has been indicted for, convicted of, pled guilty or nolo contendere to, or forfeited bail for any felony or for a misdemeanor involving gambling, theft, or fraud. The statement shall include the date, name, and location of the court, arresting agency, prosecuting agency, case caption, docket number, the offense, the disposition, and location and length of incarceration;

(5) A statement of whether the applicant has ever been granted any license or certificate issued by a licensing authority in the State, or any other jurisdiction, that has been restricted, revoked, or not renewed. The statement shall describe the facts and circumstances concerning that restriction, revocation, or nonrenewal, including the licensing authority involved, the date each action was taken, and the reason for each action;

(6) A statement of whether the applicant, within the last ten years, has filed or had filed against the applicant a civil or administrative action or proceeding in bankruptcy;

(7) A statement of whether the applicant, within the last five tax years, has been adjudicated by a court or tribunal to have failed to pay any final amount of any income, sales, or gross receipts tax due and payable under federal, state, or local law, after exhaustion of all inter-agency appeals processes. This statement shall identify the amount of the tax, type of tax, time periods involved, and resolution;

(8) A statement listing the names and titles of all public officials or officers of any unit of state government or county government in the jurisdiction in which the integrated resort is to be located and the spouses, parents, and children of those public officials or officers who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of or hold any debt instrument issued by, or hold or have an interest in any contractual or service relationship with the applicant. As used in this paragraph, "public officials or public officers" does not include a person who would be listed solely because of the person's state or federal military service;

(9) The name and business telephone number of any attorney, counsel, or any other person representing an applicant in matters before the commission;

(10) A description of the applicant's history of, or plan for, community involvement or investment in the area where the integrated resort will be located, particularly noting any experience working with native or indigenous communities;

(11) A description of any proposed or approved integrated resort, including the economic benefit to the community, especially native or indigenous communities, anticipated or actual number of employees, any statement from an applicant regarding compliance with federal and state affirmative action guidelines, projected or actual admissions, projected or actual gross receipts, and scientific market research, if any; and

(12) A clarification of the legal operation of casino games of chance or games of other forms.

(b) Information provided on the application shall be used as the basis for a thorough background investigation that the commission shall conduct with respect to each applicant; provided that any financial information submitted by each applicant shall be kept confidential by the commission and shall not be subject to disclosure under chapter 92F. An incomplete application shall be cause for denial of consideration by the commission and forfeiture of the non-refundable deposit.

(c) Applicants shall submit with their application a plan for training Native Hawaiians for jobs that are available at the integrated resort. The plan shall take into consideration the need to provide training to low-income individuals to enable those individuals to qualify for jobs that will be created at the integrated resort.

(d) A nonrefundable application fee of $1,000,000 shall be paid to the commission by an applicant at the time of filing to defray the costs associated with an applicant's background investigation conducted by the commission. If the costs of the investigation exceed $1,000,000, the applicant shall pay the additional amount to the commission.

§ ‑9 Criteria for award of the gaming license; transfer of license prohibited. (a) The commission shall issue one gaming license to operate an integrated resort to the applicant that has paid the application fee required under section ‑8, is eligible and suitable to receive a gaming license under this chapter and the rules adopted by the commission, and best satisfies all of the following criteria:

(1) The applicant has submitted a development plan for the integrated resort that provides the greatest likelihood that the applicant's facility will provide the maximum revenue to the office to help the office carry out its mission to improve the well-being of Native Hawaiians, including generating jobs and providing economic benefits;

(2) The applicant has a history of, or a bona fide plan for, community involvement or investment in the area in which the integrated resort will be located, particularly noting any experience working with native or indigenous communities;

(3) The applicant has the financial ability to purchase and maintain adequate liability and casualty insurance and provide an adequate surety bond;

(4) The applicant has provided data identifying the applicant's sources of capital and demonstrating that the applicant has adequate capital to develop, construct, operate, and maintain the proposed integrated resort;

(5) The applicant has adequate capitalization to develop, construct, operate, and maintain for the duration of the license, the proposed integrated resort in accordance with the requirements of this chapter and rules adopted by the commission and to responsibly pay off its secured and unsecured debts in accordance with its financing agreement and other contractual obligations;

(6) The applicant has not been indicted for, convicted of, pled guilty or nolo contendere to, or forfeited bail for any felony or for a misdemeanor involving gambling, theft, or fraud;

(7) The applicant has not filed or had filed against it a proceeding for bankruptcy within the last ten years;

(8) The extent to which an applicant has been, within the last five tax years, adjudicated by a court or tribunal to have failed to pay any final amount of income, sales, or gross receipts tax due and payable under federal, state, or local law, after exhaustion of all inter-agency appeals processes;

(9) The extent to which the applicant meets other standards for the issuance of a gaming license that the commission may adopt by rule;

(10) To ensure the continued integrity of Hawaii collegiate athletics, neither the applicant, nor any parent or subsidiary of the applicant permits wagering on Hawaii collegiate athletics in Hawaii or any other jurisdiction in which they hold a license;

(11) The adequacy of the applicant's plan for creating partnerships with the university of Hawaii and existing educational institutions for training Native Hawaiians for jobs, including management positions, that are available at the integrated resort and the extent to which the plan considers the need to provide training to low-income individuals to enable those individuals to qualify for jobs that will be created at the integrated resort; and

(12) The caliber of the proposed integrated resort, including the proposed integrated resort's aesthetic appearance, amount of economic benefit to the community, especially native or indigenous communities, anticipated or actual number of employees, compliance with federal and state affirmative action guidelines, and projected or actual gross receipts.

(b) An applicant shall be ineligible to receive a gaming license if the applicant or any employee of the applicant:

(1) Has been convicted of a felony under the laws of this State, any other state, or the United States;

(2) Has been convicted of any violation under part III, chapter 712, or substantially similar laws of another jurisdiction;

(3) Knowingly submitted an application for a license under this chapter that contains false information;

(4) Is a member or employee of the commission;

(5) Has had a license to own or operate casino gaming operations or other gaming revoked in this State or any other jurisdiction; or

(6) Is not, or has not consented to be, subject to the laws and jurisdiction of the State.

(c) To demonstrate financial ability, the applicant may include the economic resources available directly or indirectly to the gaming license applicant.

(d) Simultaneous with an applicant's submission of an application, each applicant that is a natural person shall submit to the commission on fingerprint cards issued by the Federal Bureau of Investigation or in digital format two sets of fingerprints for each applicant.

(e) The commission shall establish a process to facilitate and expedite the approval of the necessary licenses and permits for the integrated resort. The commission may establish its own procedures for the issuance of liquor licenses for any gaming licensee; provided that a gaming licensee shall not be subject to any requirement of the Honolulu liquor commission as to the approval of forms of live or professional music, dancing, and entertainment; provided further that all other state laws and county ordinances relating to liquor are satisfied.

(f) Once issued, the gaming license shall be nontransferable and shall be valid only for the individual or person in whose name the gaming license was issued and for the operation of the integrated resort on lands under the control of the office designated for commercial use on the island of Oahu, excluding lands west of Ko Olina.

§ ‑10 Purpose of the gaming license. The gaming licensee shall have the following obligations:

(1) Ensure the proper operation and conduct of casino gaming;

(2) Manage and conduct casino gaming that is licensed by the commission;

(3) Operate and conduct casino gaming in a fair and honest manner without criminal influence;

(4) Employ staff who have the appropriate qualifications; and

(5) Safeguard and ensure the office's and State's interests in land lease and tax revenue from the operation of the integrated resort.

§ ‑11 Applicability of state law. (a) The integrated resort property and gaming licensee shall be exclusively governed by the laws of the State.

(b) The gaming licensee shall recognize and accept the exclusive jurisdiction of the court of the State in case of any potential dispute or conflict of interests.

(c) The gaming licensee shall comply with applicable laws of the State and shall waive the right to apply regulations of a place other than the State that exempt the licensee from performing obligations or acts that must be performed or are imposed.

§ ‑12 Participation in the operation of gambling in other jurisdictions. (a) The gaming licensee shall inform the commission of its participation in the operation of casino games of chance or games of other forms in any other jurisdictions, including participation in the operation through a management contract, or of such intent. If the gaming licensee is aware that any of its directors or controlling shareholders, or any shareholder that directly or indirectly holds the equivalent of five per cent or more of its share capital, has the intent to participate in the operation of casino games or games of other forms of chance in any other jurisdictions, the licensee shall inform the commission immediately.

(b) For the purpose of this section, the gaming licensee shall submit to the commission or procure to obtain and submit to the commission, as the case may be, any documents, information, or materials that may be requested, except those that are considered confidential by law.

§ ‑13 Supplier's licenses. (a) No person shall furnish equipment, devices, or supplies to the gaming licensee under this chapter unless the person has first obtained a supplier's license pursuant to this section. The commission may issue a supplier's license to any person, firm, or corporation upon:

(1) Payment of a nonrefundable application fee as set by the commission;

(2) A determination by the commission that the applicant is eligible for a supplier's license; and

(3) Payment by the applicant of a license fee, the amount to be set by the commission and adjusted to market conditions from time to time.

Supplier's licenses shall be renewable annually upon payment of the annual license fee and a determination by the commission that the supplier's licensee continues to meet all of the requirements of this chapter.

(b) A supplier's licensee may sell or lease, or contract to sell or lease, gaming equipment and supplies to any licensee involved in the ownership or management of casino gaming operations.

(c) Casino gaming supplies and equipment shall not be distributed unless supplies and equipment conform to standards adopted by rules of the commission.

(d) A person, firm, or corporation shall be ineligible to receive a supplier's license if:

(1) The person has been convicted of a felony under the laws of this State, any other state, or the United States;

(2) The person has been convicted of any violation under part III, chapter 712, or substantially similar laws of another jurisdiction;

(3) The person has knowingly submitted an application for a license under this chapter that contains false information;

(4) The person is a member of the commission;

(5) The firm or corporation is one in which a person described in paragraph (1), (2), or (3) is an officer, director, or managerial employee;

(6) The firm or corporation employs a person described in paragraph (1), (2), (3), or (4) that participates in the management or operation of casino gaming authorized under this chapter; or

(7) The license of the person, firm, or corporation issued under this chapter, or a license to own or operate casino gaming facilities in any other jurisdiction, has been revoked.

(e) A supplier shall:

(1) Furnish to the commission a list of all equipment, devices, and supplies offered for sale or lease in connection with casino gaming authorized under this chapter;

(2) Keep books and records for the furnishing of equipment, devices, and supplies to casino gaming operations separate and distinct from any other business that the supplier might operate;

(3) File quarterly returns with the commission listing all sales and leases;

(4) Permanently affix its name to all its equipment, devices, and supplies used for casino gaming operations; and

(5) File an annual report with the commission listing its inventories of casino gaming equipment, devices, and supplies.

(f) Any person who knowingly makes a false statement on an application for a supplier's license shall be guilty of a misdemeanor.

§ ‑14 Occupationa1 1icense. (a) The commission may issue an occupational license to an applicant upon:

(1) Payment of a nonrefundable application fee set by the commission;

(2) Determination by the commission that the applicant is eligible for an occupational license; and

(3) Payment of an annual license fee in an amount set by the commission.

(b) To be eligible for an occupational license, an applicant shall:

(1) Be at least twenty-one years of age if the applicant performs any function involved in casino gaming by patrons; provided that any applicant seeking an occupational license for a non-gaming function shall be at least eighteen years of age;

(2) Not have been convicted of a felony offense in any jurisdiction or a crime involving dishonesty or moral turpitude; and

(3) Have met standards for the holding of an occupational license as provided in rules adopted by the commission, including background inquiries and other requirements.

(c) Each application for an occupational license shall be on forms prescribed by the commission and shall contain all information required by the commission. The application shall state whether the applicant:

(1) Has been issued prior gaming-related licenses in any jurisdiction;

(2) Has been licensed in any other jurisdiction under any other name and, if so, the name and the applicant's age at the time; and

(3) Has had a permit or license issued from any other jurisdiction suspended, restricted, or revoked and, if so, for what period of time.

(d) Each applicant shall submit with the application two sets of the applicant's fingerprints. The commission shall charge each applicant a fee to defray the costs associated with the search and classification of fingerprints obtained by the commission with respect to the application.

(e) The commission may refuse to grant an occupational license to any person:

(1) Who is unqualified to perform the duties required;

(2) Who fails to disclose or falsely states any information called for in the application;

(3) Who has been found guilty of a violation of this chapter or whose prior casino gaming‑related license or application has been suspended, restricted, revoked, or denied for just cause in any other jurisdiction; or

(4) For any other just cause.

(f) The commission may suspend, revoke, or restrict any occupational licensee for:

(1) Any violation of this chapter;

(2) Any violation of the rules of the commission;

(3) Any cause that, if known to the commission, would have disqualified the applicant from receiving an occupational license;

(4) Default in the payment of any obligation or debt due to the State or the county; or

(5) Any other just cause.

(g) A person who knowingly makes a false statement on an application for an occupational license shall be guilty of a misdemeanor.

(h) Any license issued pursuant to this section shall be valid for a period of one year from the date of issuance and shall be renewable annually upon payment of the annual license fee and a determination by the commission that the occupational licensee continues to meet all of the requirements of this chapter.

§ ‑15 Temporary supplier's and occupational licenses. (a) Upon written request of a person applying for a supplier's or occupational license under this chapter, the executive director shall issue a temporary license to the applicant and allow the applicant to undertake employment with, conduct business transactions with, and provide goods and services to licensees, gaming license applicants, and holders of certificates of suitability; provided that all of the following requirements are met:

(1) The applicant has submitted to the commission a completed application, an application fee, and all required disclosure forms and other required written documentation and materials;

(2) Preliminary review of the application and a criminal history record check by the executive director or commission staff does not reveal that the applicant or the applicant's key persons, local and regional managerial employees or sales and service representatives, or substantial owners have been convicted of a felony or misdemeanor that would require denial of the application or may otherwise be ineligible, unqualified, or unsuitable to be licensed under this chapter; and

(3) There is no other apparent deficiency in the application that may require denial of the application.

(b) A temporary license issued under this section shall be valid for no more than one hundred eighty days but may be renewed upon expiration by the executive director.

(c) An applicant who receives a temporary license under this section may undertake employment with or supply a gaming licensee, gaming license applicants, and holders of certificates of suitability with goods and services subject to this chapter until a license is issued by the commission pursuant to the applicant's application or until the temporary license expires or is suspended or revoked. During the period of validity of the temporary license, the applicant shall comply with this chapter and rules adopted by the commission.

(d) If the temporary license expires, is not renewed, is suspended or revoked, or otherwise terminates, the executive director shall immediately forward the applicant's application to the commission for action after first providing a reasonable time for the applicant to correct any apparent deficiency in its application.

§ ‑16 Annual report. The commission shall submit an annual report to the governor, legislature, and office no later than sixty days before the close of each fiscal year and shall submit any additional reports that the governor, legislature, or office requests. The annual report shall include:

(1) A statement of receipts and disbursements related to the integrated resort pursuant to this chapter;

(2) Actions taken by the commission; and

(3) Any additional information and recommendations that the commission may deem valuable or that the governor, legislature, or board of trustees of the office may request.

§ ‑17 Hearings by the commission. (a) Upon order of the commission, one of the commission members or a hearings officer designated by the commission may conduct any hearing provided for under this chapter related to casino gaming, or by commission rule, and may recommend findings and decisions to the commission. The record made at the time of the hearing shall be reviewed by the commission, or a majority of commission members, and the findings and decisions of the majority of the members to which the commission is entitled shall constitute the order of the commission in that case.

(b) Any party aggrieved by an action of the commission denying, suspending, revoking, restricting, or refusing to renew a license under this chapter may request in writing a hearing before the commission within five days after service of notice of the action of the commission. Notice of the actions of the commission shall be served either by personal delivery or by certified mail, postage prepaid, to the aggrieved party. Notice served by certified mail shall be deemed complete on the business day following the date of the mailing. The commission shall conduct all requested hearings promptly and in reasonable order.

§ ‑18 Conduct of casino gaming. Casino gaming may be conducted by the gaming licensee, subject to the following:

(1) The site of the integrated resort shall be restricted to lands under the control of the office designated for commercial use on the island of Oahu, excluding lands west of Ko Olina;

(2) The term of the gaming license shall be forty years and shall be renewable for additional twenty-year terms; provided that:

(A) The integrated resort met or exceeded its commitment to provide lease payments and revenue to the office to help the office carry out its mission to improve the well-being of Native Hawaiians, including generating jobs and providing economic benefits;

(B) The gaming licensee's actions have not caused the gaming license under this chapter to be suspended or revoked; and

(3) The integrated resort may operate twenty-four-hours per day, three-hundred-sixty-five-days a year, subject to market conditions;

(4) The gaming license shall not include authorization to engage in the following gaming activities:

(A) Online or mobile gaming; and

(B) Games of chance or any other gaming, betting, or gambling activities on ships or planes;

(5) Minimum and maximum wagers on games shall be set by the gaming licensee with guidance and oversight through rules adopted by the commission;

(6) The commission's agents may enter and inspect the integrated resort at any time for the purpose of determining whether the gaming licensee is in compliance with this chapter and rules adopted by the commission;

(7) Commission employees shall have the right to be present in an integrated resort under the control of the gaming licensee;

(8) Gaming equipment and supplies customarily used in conducting casino gaming shall be purchased or leased only from suppliers licensed under this chapter;

(9) Persons licensed under this chapter shall allow no form of wagering on games except as allowed by this chapter;

(10) Wagers may be received only from a person who is physically present in an integrated resort. No person who is physically present in an integrated resort shall place or attempt to place a wager on behalf of another person who is not physically present in the integrated resort;

(11) No person under twenty-one years of age shall be allowed in an area of the integrated resort where casino gaming is being conducted, except for a person at least eighteen years of age who is an employee of the integrated resort. No employee under twenty-one years of age shall perform any function involved in casino gaming by patrons. No person under twenty-one years of age shall be allowed to make a wager under this chapter;

(12) All tokens, chips, or electronic cards used to make wagers shall only be purchased from the gaming licensee within the integrated resort. The tokens, chips, or electronic cards shall be used while within the integrated resort only for the purpose of making wagers on authorized games;

(13) Prior to commencing casino gaming operations at the integrated resort, the gaming licensee shall enter into a development agreement with the office, which shall include at least the following terms:

(A) The selected gaming licensee agrees to invest at least $200,000,000 to develop and construct an integrated resort on the site selected by the office;

(B) The selected gaming licensee agrees to create partnerships with local educational institutions to train Native Hawaiians for jobs that are available at the integrated resort;

(C) The gaming licensee agrees that neither the gaming licensee, nor any parent or subsidiary of the gaming licensee, will allow wagering on Hawaii collegiate athletics regardless of its legality in other jurisdictions where the licensee operates;

(D) All revenue under the development agreement shall be deposited into the casino gaming special fund established by section 10- ; and

(E) The gaming licensee and the State agree that, other than the one gaming license issued under this chapter, the State shall not authorize any additional gaming in the State during the initial forty-year gaming license period; and

(14) Casino gaming shall be conducted in accordance with all rules adopted by the commission.

§ ‑19 Wagering tax; rate; disposition. A wagering tax shall be imposed on the gross gaming revenues of the gaming licensee at the rate of forty-five per cent. Tax revenues collected under this section shall be divided as follows:

(1) per cent deposited into the casino gaming special fund established by section 10- ;

(2) per cent deposited into the state general fund; and

(3) per cent deposited into the state gaming fund established under section -20.

§ ‑20 State gaming fund; disposition of taxes collected. There is established within the state treasury the state gaming fund to be administered by the commission into which shall be deposited all fees, taxes, and fines collected under this chapter. Moneys from the state gaming fund may be used to fund:

(1) A compulsive gamblers program and public security at the integrated resort;

(2) Training for Native Hawaiians for jobs that are available at the integrated resort, to be provided by local educational institutions;

(3) Road or other improvements to address any traffic issues as a result of the integrated resort; and

(4) Administrative expenses of the commission.

§ ‑21 Legislative oversight. After the first full fiscal year of operation, the state auditor shall conduct a program and financial audit of the commission. Thereafter, the auditor shall conduct a program and financial audit every four years after the initial audit is completed.

§ ‑22 Disclosure of information. The commission, upon written request from any person, shall provide the following information concerning the applicant or licensee; the applicant's or licensee's products, services, or casino gambling operations; and the applicant's or licensee's business holdings if the commission has the information in its possession:

(1) The name, business address, and business telephone number;

(2) An identification of any applicant or licensee including, if an applicant or licensee is not an individual, its state of incorporation or registration, and its corporate officers;

(3) The name and business telephone number of any attorney, counsel, lobbyist, or any other person representing an applicant or licensee in matters before the commission; and

(4) A description of the product or service to be supplied by, or occupation to be engaged in by, a licensee."

SECTION 3. Chapter 10, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§10- Casino gaming special fund. (a) There is created in the state treasury the casino gaming special fund to be administered by the office into which shall be deposited:

(1) Revenue from the development agreement executed between the gaming licensee and the office pursuant to section -18;

(2) A portion of the wagering tax imposed on casino gaming licensees pursuant to section -19;

(3) Any moneys appropriated by the legislature to the special fund; and

(4) The interest or return on investments earned from moneys in the special fund.

All moneys in the special fund shall be used to fulfill the purposes of this chapter.

(b) If the special fund is terminated, all funds shall be transferred to the general fund; provided that all unexpended or unencumbered balances shall be disbursed in accordance with any requirements set by funding sources and for purposes consistent with this chapter."

SECTION 4. Chapter 712, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

"§712- Casino gaming; exempted. This part shall not apply to casino gaming as authorized under chapter ."

SECTION 5. There is appropriated out of the general fund the sum of $5,000,000 or so much thereof as may be necessary for fiscal year 2024-2025 to be deposited into the casino gaming special fund.

SECTION 6. There is appropriated out of the casino gaming special fund the sum of $5,000,000 or so much thereof as may be necessary for fiscal year 2024-2025 for the purpose of funding the operations of the Hawaii gaming commission; provided that:

(1) The gaming licensee shall reimburse the amount appropriated by remitting $5,000,000 to the office of Hawaiian affairs no later than the first day on which the casino opens for operation; and

(2) The gaming licensee's application fee under section -8(e), Hawaii Revised Statutes, shall be applied as a credit against the $5,000,000 amount due under this section.

The sum appropriated shall be expended by the office of Hawaiian affairs for the purposes of this Act.

SECTION 7. In accordance with section 9 of article VII of the Hawaii State Constitution and sections 37‑91 and 37‑93, Hawaii Revised Statutes, the legislature has determined that the appropriations contained in H.B. No. , will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. In addition, the appropriation contained in this Act will cause the general fund expenditure ceiling for fiscal year 2024‑2025 to be further exceeded by $ or per cent. The combined total amount of general fund appropriations contained in only these two Acts will cause the state general fund expenditure ceiling for fiscal year 2024‑2025 to be exceeded by $ or per cent. The reasons for exceeding the general fund expenditure ceiling are that:

(1) The appropriation made in this Act is necessary to serve the public interest; and

(2) The appropriation made in this Act meets the needs addressed by this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 3000.

HOUSE OF REPRESENTATIVES	H.B. NO.	2762
THIRTY-SECOND LEGISLATURE, 2024		H.D. 1
STATE OF HAWAII