Thursday, January 25, 2001
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Posted on: Thursday, January 25, 2001

Developer wants approval to build casino at Ko 'Olina

By Kevin Dayton and Tanya Bricking
Advertiser Staff Writers

When Gov. Ben Cayetano traveled to the Bahamas last year, he met with executives from an international hotel and casino company that is now proposing a new 1,500-room resort at Ko Olina that would include gambling.

The gambling proposal by Sun International Hotels Ltd. appears to have little hope of approval by the state Legislature this year. Although Cayetano said yesterday he is willing to listen to the plan, he has long opposed casinos in Hawaii and isn’t promising to support Sun’s proposal.

Cayetano was in the Bahamas Dec. 9-13 visiting the Atlantis Resort, a facility owned by Sun International that boasts the largest aquarium in the world. Kim Murakawa, Cayetano’s press secretary, said the governor’s main purpose for the trip was to visit the aquarium, but Cayetano was informed at the time that Sun would propose a development in Hawaii.

Cayetano was accompanied on the taxpayer-financed trip by his former chief of staff, Charles Toguchi, who is now a lobbyist for Sun, and by public relations executive Jim Boersma, who has represented Sun for about a year.

Boersma said the governor, Toguchi and he had dinner with Sun executives, but that as far as Boersma knows, Cayetano did not discuss gambling with the executives.

Sun is proposing two bills that would allow developers to compete for a license for a single casino in west Oahu. The operations would be overseen by a gaming commission and pay a wagering tax of 12 percent to the state.

Under the bills, the state would be guaranteed a minimum take of $32 million to $42 million a year for the first three years, with $30 to $40 million going into a scholarship program for college-bound students who maintain grades of a B-minus or better, Boersma said.

The proposal will be introduced in the Senate by Senate President Robert Bunda, D-22nd (Wahiawa, Waialua, Sunset Beach), and in the House by Rep. Nathan Suzuki, D-31st (Salt Lake, Moanalua).

State lawmakers have rejected one gambling proposal after another in the last decade, most recently killing a measure last February that would have legalized shipboard gambling.

Most lawmakers said they remain opposed to all forms of gambling. In a survey of legislators by The Advertiser last month, 41 of the 51 members of the House said they oppose legalizing casino gambling, as did 19 of 25 state senators.

Only two of the state’s 76 representatives and senators said they would vote to legalize casino gambling. One is Suzuki, and the other is House Tourism Committee Chairman Jerry Chang, D-2nd (South Hilo) who has agreed to hold a hearing to consider Suzuki’s bill.

Key legislators opposed

Key leaders such as House Judiciary and Hawaiian Affairs Committee Chairman Eric Hamakawa, D-3rd (South Hilo, Puna) and House Finance Committee Chairman Dwight Takamine, D-1st (Hamakua, North Kohala) have historically opposed gambling. Hamakawa joined in a petition drive among House members in 1998 to end all discussion of gambling that year.

A gambling measure likely would have to clear both the Finance and Judiciary committees.

In the Senate, Senate Judiciary Committee Chairman Brian Kanno, D-20th (Ewa, Makakilo, Kapolei) and Senate Ways and Means Committee Chairman Brian Taniguchi, D-11th (McCully, Moiliili, Manoa) both indicated in the Advertiser survey they oppose legalizing casino gambling.

Taniguchi said yesterday he believes there are other ways to finance college scholarships, and "personally, I would have some very serious concerns about passing casino gambling. I think it would have an adverse impact on Hawaii, and I think it would change Hawaii as we know it."

Boersma said the Sun resort would provide 5,000 to 6,000 permanent jobs, making Sun one of the largest private employers in the Islands.

The gambling would be an "amenity" in the larger resort with other attractions, Boersma said, adding that less than 30 percent of Sun’s revenue is from gaming.

"If it’s done right, it can be positive for Hawaii," Boersma said. "Overall for me, the positives outweigh the negatives, and I think if people are open-minded and look at it, they’ll come to the same conclusion."

Boersma said a media campaign will kick off with newspaper advertisements at the end of this week to make a case for the gambling proposal.

Ko Olina denies involvement

No one at Ko Olina has talked to anyone about a casino at the resort, said Sheila Donnelly-Theroux, whose Sheila Donnelly & Associates company speaks for Ko Olina.

Ko Olina originally was conceived as a $3 billion resort project with condominiums, single-family homes, hotels and stores fronting manmade lagoons.

Financing for Ko Olina collapsed in the early 1990s as Japanese backers of the project ran into difficulty, and only a fraction of the project was completed.

"Nobody at Ko Olina is part of any group or has talked to anybody about a casino," she said.

Gambling popular in Isles

Only Hawaii, Utah and Tennessee prohibit gambling of any kind. But gambling is still popular among Hawaii’s residents. An average of 644 people in Hawaii fly to Las Vegas every day.

Dorothy Bobilin, president of Hawaii’s Coalition Against Legalized Gambling, said a casino would "open the floodgates" for other forms of gambling.

She said her opposition is based on more than moral ground, that it focuses on social and economic problems she said gambling could bring.

"Look at the ripple effect of the Kahapeas and Sias in the world," she said of former Honolulu housing official Michael Kahapea, a high-stakes gambler who stole nearly $6 million in city money for his Las Vegas gambling adventures, and bankrupt local financier Sukamto Sia, who left millions of dollars in gambling debts.

If a gambling bill develops out of talk of a casino proposal, it will mean a battle in the Legislature, Bobilin said.

"We will fight that. We will get our troops out," she said. "This will be war."

There is no free lunch’

The problem for the anti-gambling group is that lobbyists have a lot more money to develop a public relations campaign to sell people on the idea of a casino, said Ira Rohter, associate professor of political science at the University of Hawaii as well as a Green Party member and gambling opponent.

"It’s one of those things based on the myth of revenues coming in," he said. "· It looks like free money. It turns out there are a lot of social costs. · There is no free lunch, you know?"

If it were up to a popular vote, Eddie Okamura said, he believes gambling would be legal in Hawaii. Okamura, owner of Kamaile Magazine shop in Waikiki, sells football forecast sheets popular with sports bettors. He favors legalized gambling and says many Waikiki hotels already have enough space in their lobbies to accommodate casinos.

"It’s always been close," Okamura said. "But it just never happened because of the politicians."

If casinos came to Hawaii, retired psychiatrist Bernice Coleman says she’d spend her gambling money here. The Waialae woman now goes to Las Vegas three or four times a year to spend about $1,000 a day gambling.

A local casino would be convenient, she said, but she sees the latest proposal going nowhere, and the idea of it becoming a reality is a bet she wouldn’t make.

Advertiser staff writer Dan Nakaso contributed to this report.

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