Hawai'i businesses find no consensus on gambling
By Johnny Brannon
Advertiser Staff Writer
As lobbying heats up at the Capitol between advocates and proponents of legalized gambling in advance of the legislative session, Hawai'i's business community remains split on the issue and largely on the sidelines of the debate.
Proponents say gambling could help revitalize the state's economy by providing a new lure for tourists. But some in the tourism industry question whether any benefit would be spread throughout the state, and others believe gambling would clash with Hawai'i's image as a safe, laid-back place to relax.
Most business groups and tourism executives have been reluctant to take a public stance on the issue, an indication of how sensitive the subject is and how serious the divisions are.
"We don't have a position, and I'm not sure we will," said Carl Takamura, executive director of the influential Hawai'i Business Roundtable. "People, if they have opinions, have very strong positions, so it would be difficult for us to come to a consensus."
In fact, no segment of the business community appears solidly behind legalized gambling or willing to make a strong push in favor of it, Takamura said. The issue is not limited solely to economic concerns, but encompasses religious and cultural feelings and beliefs.
"I don't think everybody's looking at it strictly from a business perspective," Takamura said. "All kinds of personal views also come into play. It's an amazingly diverse range."
The Hawai'i Bankers Association is among the handful of business groups that have taken a public position on gambling. The group polled its nine member banks last month and reaffirmed its long-standing opposition, said Executive Director Rodney Shinkawa.
Bankers fear gambling could cause borrowers to default on loans, and bring other financial and social problems, he said.
Two major gambling proposals are being discussed with legislators. Sun International Hotels wants to build a luxury resort and casino at Ko Olina in West O'ahu. And an investment group from Detroit wants to build two standalone casinos, one at Ko Olina and one in Waikiki.
David Carey, president and chief executive officer of Outrigger Hotels and Resorts, said limited gambling could benefit tourism if it were accepted by the community, strictly regulated and not marketed as Honolulu's main attraction.
"It would be nice to have as an additional activity, but it shouldn't be the driver," Carey said. "If it were done right and handled well, it could be a good thing. But so far the state hasn't really demonstrated an ability for that."
Outrigger, Hawai'i's largest local hotel company, is pursuing a $300 million redevelopment plan for its Waikiki properties. Carey said Sun's $1 billion plan for Ko Olina certainly could be a financial boost for that area, but its value for tourism overall could be limited unless a second casino were allowed at Waikiki.
Carey said there should be no more than two casinos allowed, and that they should not be patterned after the huge, glitzy resorts of Las Vegas.
Sun has said it would have to downsize or even abandon its plan for Ko Olina if more than one casino were allowed, because competition would dilute the customer base.
Other key hotel companies say gambling would harm Hawai'i's image as a relaxing place to honeymoon, spend time with family, enjoy the outdoors or seek physical rejuvenation.
"I don't see how gambling can perpetuate or enhance any of that," said Keith Vieira, a senior vice president for Starwood Hotels and Resorts in Hawai'i. "I don't think it's the right product for what we represent. It's not what we are as a destination."
Sun lobbyist Jim Boersema agreed that the business community was divided on the issue, with little hope opponents could be persuaded to change their minds — which is why it makes sense to try gambling for a time and see whether benefits outweigh concerns.
"You're never going to get an answer, so let's try one casino," he said. "Otherwise we'll talk forever, and we've got people on welfare who need jobs and aren't going to be on welfare forever. We've got schools that can't wait forever" for tax money that gambling could provide.
Legal mechanisms to allow gambling could include a 10-year "sunset clause" that would force the state to revisit the issue and decide whether gambling should be allowed to continue, Boersema said.
The Hawai'i Hotel Association is polling its members and could become more active in the debate if feelings are strong, said President Murray Towill.
"Once we get results, we'll try to find out where we should go," he said.
The Hawai'i Tourism Authority surveyed tourism groups on the issue last month and found support for gambling very limited. The majority surveyed declined to take a position, said board member Millie Kim.
"There hasn't been one real push one way or the other," said Kim, who represents the Big Island.
Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.
