Two groups back local gambling
| • | Casino backers prepare big push at Legislature |
By Johnny Brannon
Advertiser Staff Writer
The two main groups that want to legalize gambling in Hawai'i include major casino and hotel developers from the Bahamas, Japan, and Detroit.
Sun International Hotels Ltd., wants to build a $1 billion resort and casino within the Ko Olina resort and residential community on O'ahu's Leeward Coast, a plan it first described last year. Sun and a Japanese investment group are financing a pro-gambling lobbying group called the Coalition for Economic Diversity.
The second group, comprised of Michigan investors who have set up a company called Hawai'i Entertainment, wants to build casinos in Ko Olina and Waikiki.
Sun is based in the Bahamas and owns the 2,300-room Atlantis Resort and Casino, that country's largest hotel property. Through subsidiaries, Sun also partially owns hotels and resorts in the Maldives, Mauritius and Dubai, and it developed the Mohegan Sun Casino Resort in Connecticut.
Headed by South African Solomon Kerzner, the $1.3 billion company recently launched an Internet gambling subsidiary based on the Isle of Man, an independent British protectorate.
But Sun's earnings plunged with the tourism slump that followed the Sept. 11 terrorist attacks. The company lost $11.7 million in the quarter that ended in November, compared to the $12.4 million profit it earned during the same period last year.
State ethics commission records show that Sun and TSA International, a Japanese investment group, each contributed $100,000 this year to a group lobbying for gambling in Hawai'i, the Coalition for Economic Diversity. TSA International was one of Ko Olina's original investors in the late 1980s. It later developed the Grand Hyatt Wailea Resort on Maui and has invested in other hotels on Kaua'i and the Big Island.
Sun said its plan did not include other investors, but that it had not ruled others out.
"We've always been open to a local partner, but at this point we don't have one and we're not in talks," said Howard Karawan, Sun's executive vice president for marketing.
'Grassroots support'
The Coalition for Economic Diversity is headed by Jack Seigle, a Honolulu campaign consultant and public-relations executive. It spent most of the money on lobbyists, a poll, an economic impact study, and expert testimony before the Legislature, according to a report filed with the state campaign spending commission.
The group also spent $13,000 on T-shirts and "organizing grassroots support," and donated $1,000 to a foundation that is renovating Washington Place, the governor's home, the report shows.
Gov. Ben Cayetano visited Atlantis last year with the group's chief lobbyist, Jim Boersema, and met with Sun executives. But Cayetano said the trip's main purpose was to inspect the resort's enormous aquarium.
Boersema said neither Sun nor TSA had provided any more money to his group since they gave the initial $200,000. He declined to disclose what other businesses or individuals make up the coalition, but said it included business owners, union officials, members of neighborhood boards and others who support gambling.
They may become more visible soon, but some are leery of publicity. Boersema said he received abusive and threatening phone calls when his involvement in the group became known.
Waikiki potential target
The Michigan group is headed by two investors in a Detroit casino called MotorCity, Marian Ilitch and Mike Malik. They are forming a partnership called Hawai'i Entertainment and have invited local investors to join them, said Tom Shields, who heads a Michigan public relations firm that represents MotorCity and Hawai'i Entertainment.
Hawai'i Entertainment hopes to build two casinos here, one at Ko Olina — separate from Sun's proposal — and one in Waikiki, Shields said. The plan differs from Sun's in that the casinos would stand alone, while Sun's casino would be one component of a larger resort.
Ilitch is the wife of Mike Ilitch, owner the Detroit Tigers baseball team and the Detroit Red Wings hockey team, as well as the Little Caesars pizza chain and other businesses. Malik is a developer and longtime consultant for Michigan casinos owned by Indian tribes.
Shields' company, Marketing Resource Group Inc., has also represented tribal casinos and was one of the key forces behind two ballot measures through which voters legalized gambling in Detroit. Both were partly financed by Malik and investors.
Shields' firm has set up a group called Holomua Hawai'i to seek public support for gambling here, and spent about $11,000 to hire lobbyists Frederick Hirayama, Nick Medeiros and John Radcliffe from January to April, the latest period for which state ethics commission disclosure reports are available.
The company has also begun gathering petition signatures to demonstrate what it says is growing public enthusiasm to legalize gambling in Hawai'i. Shields declined to say how many signatures had been gathered, but indicated they would be made public if the Legislature considers a gambling bill next year.
A third gambling proposal, by Hollywood Casino Corp., stalled this year after the Dallas-based firm spent more than $200,000 on lobbying for a dockside floating casino here.
The company backed off when local officials made it clear they were more interested in supporting construction of a land-based casino, Hollywood said. The $570 million company operates hotels and dockside casinos in Illinois and Mississippi and a land-based casino in Louisiana.
Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.
