Senate Standing Committee on Commerce and Consumer Protection

Good afternoon. We're convening the joint committees on Transportation and Culture in the Arts and Economic Development and tourism on our 1:00pm agenda here in State Capital Conference Room 229. We have three measures up today. We'd like to ask folks to to. Limit your testimony so we have time to get through to everybody.

Make sure everyone has a chance to testify. So we'll be limiting you to no more than two minutes each. Make sure you have your testimony written up and submitted if you haven't done that already. And finally. That is it. All right, let's get started.

Up first is HB450HD3 relating to the Department of Business, Economic Development and Tourism, which transfers the State foundation and Culture and the Arts. The Department of Business, Economic Development and Tourism. And Testifying first on HB 450 is the state foundation on Culture in the Arts.

Thank you.

Up next is the Department of Business, Economic Development and Tourism.

Chair and Members. Bruce Oliviera for the Department of Research. We stand on our testimony [unintelligible].

Thank you. We have also testimony support from DAGS, the Hawaii Arts alliance and two individuals. That's all the testimony that's been submitted. Is there anyone else wishing to testify on HB450 afternoon? Seeing none. Are there any questions? Right. Seeing none. Thank you. Let me turn it over to Chair of Economic Development and Tourism.

Hi. Thank you. Okay, moving on to HP437 relating to out of state offices. First up, Department of Business Economic Development. Thank you. Next up, Melody Calisay testifying for Filipino Chamber of Commerce. In support and Randall John Francisco also testifying support. Anyone else wishing to testify on this measure? Seeing non Members. Any questions?

Yes, Questions for today.

Senator Kim.

Can you introduce yourself?

Mark Ritchie from DBEDT.

Mark, last time we heard this on the Senate Bill, I asked the Director about what other offices you had. Yes. And he said Beijing and Taiwan. That's correct. And that you folks are reevaluating this. Have you done that already? I'm sorry that you are re evaluating these offices and whether or not they're going to continue.

To my knowledge, they're going to continue. We were evaluating one person who was staff in the office in Taiwan and we have. We'll have a new person doing that for us shortly.

So what, what is going to be the ROI on this office?

I think this office the reason. Roxanne comments. We already have good relations with our Beijing office and our Taiwan office and they help cover China, including Hong Kong and then Taiwan. A lot of activities. We do a lot with Japan, South Korea. This would be sort of A new country to try to develop trade with.

We already have a good basis of businesses in Hawaii that are interested in it, the Chamber of Commerce and things. This would be forward looking. The ROI would be to try to increase our exports of Hawaii produced goods to the Philippines as a developing market. They have growth rates over 6% now.

Don't we already do that?

Now we do a little bit, but I think we would if we were to do something like this, we would really then try to develop a more robust program of taking missions over to the Philippines. We bring buyers over like let's say from Taiwan and things. We would start doing a lot more of that.

We could also integrate it into our other export development programs. We have like, you know, $1.0 million in high school.

Let's do that already. So I guess in the scheme of things I'm looking at and the budget and the way things are going, you know, is this the best use of our funds now? We can take this money 200,000 and 175,000 on a reoccurring basis, can't we? Outreach to these, to these countries and so forth.

Better than having to put a man in office. I mean I'm just, you know, everything's nice to have. I understand there's priorities. What are you going to cut in your office budget to, to for this?

Well, understand your point. This is we're forward looking as a developing country. I have all statistics. We have less trade with the Philippines than we do with Japan and some of the other.

We have a lot of countries that we can also develop better trade, right?

Yes. Like Vietnam might be one.

Right. So are you going to put an office there?

No. I mean. Well, that's not a proposed proposal yet.

Yes, but I mean you're saying what I'm saying. So we're going to propose all of these.

I understand this. When we saw Ms. Dale come through, we sort of did our research and things and this, this is forward looking is what I would say. If we really wanted to put an emphasis on time to develop more trade and things with the Philippines there you can make a case for that.

But there's a lot of factors that say yes, this would be a good thing to do but can understand when budgets are tight that you know, we could try to just do that in our regular programs as well.

Well, don't get me wrong, I mean I support having trade with the Philippines and what we can do, but you know, we have to be managed, manage fiscally and I would look at DBED as being the number One agency to be looking at how do we manage things fiscally and how do you prioritize?

Because everything's nice to have. I mean, we introduced what, over a thousand bills and everybody wants their little projects. So we don't have a lot of money to Fund them all. No, understand. I think that as the head of dbit, that you folks are going to prioritize these things because your recommendations is something that we look at.

Right, right. Yeah. I mean, another factor this probably came up as well is we have five sister state relationships in the Philippines. Also the only other country that we have five with is Japan.

So there are just a lot of economic ties and actually just cultural ties and family ties and things that go back and forth between the Philippines and Hawaii. And we were trying to, I think the person or whoever introduced this Bill is trying to like play on that and thanks, but no, I understand your point.

I'll leave that one.

No, and I, I certainly appreciate that. I think that we do have a lot of ties and maybe we need to have ties with places where we don't have a lot of ties, that we need to develop more ties.

So you can make that idea where we sort of will have a convented advantage and could be successful and actually increase Hawaii's exports.

I would hope to, would create a plan to tell us which areas would be most viable, most economical, that we're going to be able to get a good return on investment. Other than looking at, you know, knee jerk reactions to legislation that pops up. From time to time. You got to have a plan.

No, understand that. And probably the best place for that plan is how we use our federal funds for export development. We actually do target, and it's predominantly Japan. In fact, we have trade shows going on in Japan right now, Food acts. We have 12, you know, Hawaii companies in there and we go into many.

Shows in Japan and we have office in Japan.

We do not have an office. We have a lot of people that go back and forth between Japan and here that are.

But again, so, you know, how do you, how do you prioritize one over there? It's difficult. You know, I don't want to say no to the Philippines, I don't want to say no to the Koreans, you know. Right.

It puts us in an awkward position, but it needs to be done from a plan of what is most viable. Strategic, right?

Yes, it needs to be strategic. No, completely valid.

Thank you. Any other questions?

Just to add, some of us recently came and went to Taipei and Taipei has our associations. They're Headquartered as well. Right. And what was interesting, and I can kind of see it with the Philippines in.

In a sense of what's happening in our country, when we were there, in our visits with the Lieutenant Governor as well, discussions was pretty much about China. And we know that China wants to get into Taipei, but they were around during the same time that we were there.

It seemed like the government was having discussions and knowing that what China wants to do with Taipei.

But what happens is it got us educated and our relationship with Taipei and Hawaii and that with regards to the Philippines, and we know what's happening with Philippines and the South Philippines Islands and the ocean around it where they're in conflict right now with China.

And so, you know, it's something that I think other than tourism, the relationship with us and making sure that we as part of the United States, support the arrangements or any government relationship that that particular country probably is looking at us as well for some, you know, the activities that has to do with.

With tourism and the idea that Hawaii will be there for you as well. So I think it's a great idea. But then going forward, then we need to make sure that our committees are brought up to see what your plans are going forward. But the relationship, I think, with Hawaii has always been there.

My dad came from the Philippines as an immigrant. But nonetheless, I think, you know, just being supportive of our Asian countries and the Pacific, I think, is kind of important as well.

And since we're deep, we're always looking at economic angles. This year we're in Taipei. We've had a lot of coffee buyers go back and forth.

And they've already started.

Yes, part of it. They're coming from coffee. Yes.

Yeah. Okay. Thank you. Any other questions for the Committee? Seeing none. Moving on to HB 1391 relating to trade for stop pod, Department of Business Economic Development. Good comments, 1391.

Thank you. Next up, Rita Kama Kimura in opposition, Mary Smart in opposition. Anybody else wishing to testify on this matter? Seeing none. Members, any questions? Senator Kim.

Similar questions on this one. Why is this needed?

We just offered comments on this one.

Yeah, comments and support.

Right. Ireland is a great country. If you're trying to get into the EU, European Union.

Why is it needed? Why is this needed?

I would have to talk with the author of the bill, and I'm not that prepared on all the entropies of what went into this one.

That's why we just saw.

Okay.

How many trade commissions do we already have?

Trade commissions?

Yeah.

I'm not familiar with the terminology, trade commissioning. Yeah. No, that's what it wants to establish. I don't know if we have one.

Well, obviously you don't.

Yeah.

Right. So why don't you. I mean, I'm just trying to make sense of this measure and what you folks are up here as dbid. Do you recommend we do a trade commission or don't you? Do you?

We just offered comments. It's actually opposed, but I think the intent of this bill was to try to cultivate greater economic ties with Europe and using maybe Ireland as sort of an entry point. That's sort of my take on it.

So do we have relationships with Ireland? Do we have sister cities with Ireland?

We do not have any sister state relationships. I'm not familiar with the Sister City Program. We don't have any sister state relationships.

Do you have sister state relationships with any other European country?

Um, No.

No. Okay. I'm just, again.

Actually, I'm sorry. Portugal, Azores and Madeira, islands out the Atlantic. Sorry.

So, why not trade commission, west Portugal. Do you see what I'm saying?

Well yes. No, I understand.

So again, I hope you get back to us on your evaluations on the other two in Taiwan and Beijing as far as that concerned on the last bill. But get back to us. You know, maybe this is a good idea.

Right.

And maybe Ireland is a good idea. I don't know. But as deep, you folks should be doing the research and getting back to us.

Yeah, no, no, definitely. We'll do. We can. We do put out our sister. Or I'm sorry, not sister. We put out a Sister State Report, but also we do State of Hawaii's offices and things. So we can definitely send that to you if you're interested. Just shows you how some offices like that work.

And then on trade commissions, I don't think we have a lot of experience on how that would work structurally, when we use that terminology, as opposed to just a economic relationship or a sister, sister state relationship of some sort.

Well, look forward to getting that report. And I hope the report includes kind of like what our ROI has been and what have been accomplishments and not just give us a listing of the offices.

No. Understood.

Thank you, Chair.

No, yeah. Just to add, though, this bill creates the, the commission, and so I'm sure that, that it will be very difficult if this is a creation of a trade, and this would probably recognize Senator Kim's questions. Do we have a commission or not? But it doesn't seem like we are.

I haven't heard of any trade commission that sort of operates the way this is structured.

Exactly, exactly. And you don't want to compete with President Trump, let him go by Thailand. Okay, thank you.

Irish Prime Minister, I think.

Yes. Yes. He said no. Okay.

Hang on. I'll come back. Please. So, Mark, how hard is it to create one trade commission. What does it entail?

I think it probably just requires some FTE time, but I think you would also, we would want private sector input or people to reserve on the commission. So it's going to take other people's time, volunteer time.

And what I would like to see, normally, like, if somebody wants to establish like a sister state relationship of some sort, we have a whole application process and there's all sorts of validation. Okay. Is there private sector support for something?

Because this has to be kind of more private sector driven because the government can't be driving this whole thing because you're supposed to be trying to create economic ties, and those are private sectors.

So I assume, like in this case, so say, whether it be Filipino ethnic background, Hawaiian background, Portuguese, that each of those sectors would get involved and participate in the trade commission. Is that kind of what you foresee?

Yeah, if you were doing a trade Commission, yes. And also when we're just trying to do economic initiatives, take a mission overseas, you know, we kind of go to the whole Hawaii business community, but some people that already have an affinity and they know the culture and they already have ties there and want to do business there. Yeah, those are the types of people who want to recruit.

Okay, got it. Thank you. Any other questions? Seeing none.

Is there some kind of a trip to Ireland that we can go on to visit? To see if we need a trade commission, if so I volunteer to go.

So we're going to go straight into decision making.

Okay. Where we at?

Okay. Chairs haven't conferred. We're going to go into decision making on the measures before us. Up first is House Bill 450 HD3, relating to the Department of Business, Economic Development and Tourism.

I'd like to recommend moving this forward with amendments. Just making one amendment, which is sort of a housekeeping amendment that I'll explain on page 18, line 9, adding "notwithstanding any law to the contrary or specific direction by the Legislature" to that provision, and that's just as an explanation as we develop works of art and things like that with specific intent.

For I think pursuant to the discussion we just had, where there's international collaboration, for example, and we're either gifting work of art as part of a relationship or something, or other things of that nature, there can be very sensitive cultural and international relations kind of considerations.

So it would allow some direction in those very narrow cases where we need very specific outcomes so we don't blow up the whole world. Other than that, I'll note this has an effective date as it goes on to wham. So any discussion? Any questions? If not, Vice Chair for the vote.

For the Committee on Transportation and Culture and the Arts, the Chair's recommendation on HB450 House Draft 3 to pass with amendments. Chair Lee? Vice Chair votes aye. Senator Elefante? Senator Kanuha? Senator DeCorte? State measures adopted, Mr. Chair.

And then moving on to Economic Development and Tourism. Same request. Members, any questions? Discussion? Seeing none. Vice Chair for the vote. Chair votes aye.

I vote yes. Senator Fukunaga? Senator Kim? Senator Awa? Chair, your recommendation is adopted.

Thank you. Moving on to HB1391, relating to trade. Sorry. Moving on to HB437. 437.

Okay, sorry. Okay. Moving on to HB437, relating to out of state offices. We're gonna pass with an SD1 making any necessary technical amendments and a defective date of July 1, 2050. Discussion? Seeing none. Vice Chair for the vote. Chair votes aye.

I vote yes. Senator Fukunaga? Senator Kim? Senator Awa? Chair, your recommendation is adopted.

Thank you. Committee on Transportation, Culture and Arts, Same recommendation. If there's no discussion, Vice Chair.

For the Committee on Transportation and Culture and the Arts, Chair's recommendation on HB437 House Draft 1 is to pass with amendments with five Members present. Any voting with reservations? Any no votes? Okay. Measure is yes, measure is adopted. Mr. Chair. Thank you.

Then moving on to HB1391 relating to trade. Well, I think this is a very interesting concept where we create trade and establishing Hawaii-Ireland Trade Commission. I'm going to move this on for more discussion with an SD1 making any necessary technical amendments and a defective date as of July 1, 2050. Any discussion? Seeing none.

Vice Chair for the vote Chair votes aye.

Aye vote with reservations. Senator Fukunaga? Senator Kim? Senator Awa? Chair your recommendations are adopted.

Thank you. For the Committee on Transportation, Culture and the Arts, same recommendation there. Any discussion? Seeing none, Vice Chair.

Chair's recommendation on the- this is the Committee on Transportation and Culture and the Arts, Chair's recommendation on HB1391, House Draft 1 to pass with amendments. Chair Lee? Vice Chair votes aye. Senator Elefante? Senator Kanuha? Senator DeCorte? Measures adopted. Mr. Chair.

Thank you. And with that, we're adjourned.

Hello and welcome to hearing with the Senate Community Economic Development and Tourism. Today is March 13, 2025. This is our 1:01pm agenda and we are in conference from 229. The hearing is being streamed live on YouTube. And the unlikely event that we must abruptly end this hearing due to technical difficulties or fire alarms,

The Committee will Reconvene on Tuesday March 18 2025 at 1:02pm in Conference Room 229. This Committee has various agendas to get through today so there will be a one minute time limit for our testifiers. Today's agenda includes two bills. First on the agenda is HB 534 relating to labeling requirements.

First up, testifying on behalf of Department of Land and Natural Resources is Dawn Cheng.

Good afternoon Chair- inaudible.

Thank you. Next up, Brian Miyamoto, Farm Bureau in support. Stephanie Sakamoto. Thank you. Next up, Hunter Hevlin in support. Douglas Perrine in support. Jenny Yagurich in support. Andrew Evans in support. And Uilani Nightpo in support. Anybody else wishing to testify on this measure? Seeing non Members. Any questions?

We had a similar measure right Senate Bill. Did it pass over?

It went. It went over. But yeah, they have.

So is there measures in that Bill that we want to.

No, I think we good with this measure. We need some change. Thank you. Okay, Moving on to HB650. Sorry. Moving on to HB650 related to sea salt products. First up, Department of Business Economic Development Director, Tokioka. Thank you. Next up, Lauren Zirbel testifying for Hawaii Food Industry Association on Zoom.

She's not available on Zoom Chair.

Okay, next up, Brian Miyamoto for Hawaii Farm Bureau in support. Sherman Chamber of Commerce in support. George Joseph on Zoom.

Yes, I do support the Bill. We have been making. We have made tremendous progress with this project and the FDA consultant feel very optimistic about completing this successfully and thank you for your support.

Thank you. Anybody else wishing to testify on this measure? See none. Members, any questions? DBEDT, quick question. So your testimony has stated that UH CTAHR has the expertise to provide the training on colored sea salt. So should they be given the task and money instead of DBEDT?

Yes. Well, if the Legislature wanted to do that, I mean DBEDT would mostly just be administering the contract with CTAHR. Our interest is just to see our sea salt companies to be successful. That's kind of what we want, but this is a technical issue, so yes.

Okay, sounds good. Thank you. Any other questions? Okay. Seeing none, we're going to head straight into decision making. First up, HB 534 relating to labeling requirements. We are going to pass this with SD1 making any necessary technical amendments and a defective date as of July 1st, 2050. Any discussion? Seeing none, vice chair for the vote. Chair votes I.

[roll call]

Chair, your recommendations adopted.

Thank you. Next up, HB 650 relating to sea salt products. We'll also move this out with an SD1 making any necessary technical amendments and a defective date as of July 1st, 2050. Any discussion? Seeing none, vice chair for the vote. Chair votes I.

[roll call]

Chair, your recommendation is adopted.

Thank you. And with that, we are adjourned.

Welcome to the hearing with the Senate Committee on Economic Development, Tourism, on Commerce and Consumer protection. Today is March 13, 2025. This is our 1:02pm agenda and we are in conference room 229. We have one Bill on this agenda, so we will go ahead and get started with HB1308 relating to sports wagering.

First up, Nadine Ando for Department of Commerce and Commerce Consumer Affairs.

Good afternoon, Chairs, Vice Chairs, Members of the committees. Nadine Ando, Director of DCCA and stand on our written testimony in opposition to this measure.

Thank you. Next up, Director of Taxation, Gary Suganuma.

Aloha Chairs, Vice Chairs, Members of the Committees. Winston Wong, Administrative Rules Officer on behalf of the Department of Taxation. The Department of Tax stands on its written testimony, providing comments on the measure. I'll be available for any questions.

Thank you. Next up, Deputy Attorney General.

Good afternoon, Chair DeCoite, Chair Keohokalole, Vice Chairs and Members of the Committee. My name is David Williams, Deputy Attorney General from the Criminal Justice Division.

The Department opposes the Bill because it is concerned that legalized gambling in the form of sports wagering and fantasy sports conducted by business corporations or other money making enterprises on a large scale in Hawaii will increase the risk of adverse social impacts on Hawaii citizens.

We've noted in our testimonies the studies that have shown that legalized gambling has resulted in increased negative economic effects on families, including increased credit card debt, reduced credit, increased bankruptcy, especially in families from the most vulnerable economic households.

Also noted in our testimony are studies that show an increase in domestic violence related to legalized gambling as well as negative effects on youth who are exposed to seeing family Members gamble or youth who are themselves gambling. The Department also is concerned that the Bill appears to legalize fantasy sports contests.

However, it doesn't include it in the regulatory license taxation or criminal penalty provisions as it does with sports wagering. For those reasons, the Department is respectfully opposing the Bill, request that it be deferred. Thank you. And I'm available for questions.

Thank you. Next up, Louis Oliveria with comments. Next up, Christine Denton, Department of the Prosecuting Attorney. I'll switch that out.

Good afternoon, Chairs DeCoite, Chairs Keohokalole, Vice Chairs, Wakai, Vice Chair Fukunaga. We stand in opposition. We did the same research apparently the AG's did. I'm not going to repeat all that. It does concern me.

When you watch pro football now, half the commercials are for gambling and I'm afraid in a couple of years we're going to find we have a whole generation of problem gamblers, typically young men. So I think this would just be opening up a Pandora's Box and we would stand in opposition to to it. Thank you.

Thank You. Next up, Jerome Pacarro, Acting Major Honolulu Police Department. On Zoom.

He's not available on Zoom Chair.

In opposition. Thank you. Next up, Jeremy Lemon testifying for MGM.

Good afternoon, Chairs, Vice Chairs and Members of the Committee. My name is Jeremy Limun, Director of Government Affairs representing BetMGM. And I'm also a Member of the Sports Wagering Working Group together with my colleague Rebecca London with DraftKings who I believe is on zoom.

And I believe that our working group will be presenting its findings soon to the Legislature. But just wanted to thank everyone on this Committee for hearing HB1308. BetMGM is happy to be here to vocalize our strong support.

I have provided your Committee, committees with written testimony with information on what HB1308 would do for revenues, for regulatory compliance, for integrity, and also would invite the Committee to take a look at the testimony that our trade coalition, the Sports Betting alliance has submitted and provides data points and facts refuting some of the messaging points from the opposition with respect to problem gambling and responsibility.

Can you. Your time is up. So we have your written testimony.

Yep, absolutely. And that's. That's it. And happy to answer any of your questions.

Thank you. Next up, Brandon Makaawaawa.

Aloha Chair, Members. The state commissioned a working group to assess sports betting feasibility. This Bill moves forward without waiting for this research that this esteemed body requested. And that is irresponsible, irresponsible policymaking. The study should be completed before any action. Sports betting revenue projections do not hold up. The financial promises tied to sports betting are misleading.

West Virginia, despite legalizing sports betting in 2019, has only generated just over 20 million in tax revenue. And it's beginning over five years ago at the same 10% tax rate that has previously been contemplated. Wyoming, with a small population like Hawaii, brings in just one and a half million per year. These are not isolated cases.

Gaming tax revenue is consistently lower than promised, while the costs remain high. Regulation and oversight carry significant costs. Legalizing gaming is not just about revenue, it is about long term financial responsibility. Regulation, enforcement and compliance require serious investment. Without a well structured plan, oversight costs. Could surpass any financial benefit.

Brandon, you can wrap your testimony.

That's about it. Thank you.

Thank you, Appreciate it. Next up, Cody Sula, Ironworker Stabilization Fund.

Hi, Chair, Chairs, Vice Chairs, Members of the Committee. My name is Cody Sula with the Ironworker Stabilization Fund. We're in strong support of HB1308 and we're in support because we are actually support of anything that can help diversify the economy. Keep some revenue and money in Hawaii to keep our local families home.

There's a lot of issues that come up when people testify regarding sports wagering, but one of the biggest problems that we have is the high cost of living. With the budget cuts coming down from Washington, you know, you guys are looking for areas to keep funding.

We believe that the money with an implemented tax, about 15 to 20% on sports wagering could bring in viable revenue for the state to help programs such as education, infrastructure, and other programs that could help bring relief to our island residents. So when it comes to- I'll wrap up with this.

When it comes to sports wagering, right now there's a whole bunch of illegal online gambling happening. And in the words of our Managing Director, he says that we're keeping the pennies home and watching the dollars fly away, and soon we're going to lose the pennies.

But in this case, when it comes to illegal sports wagering, it's already at zero. Thank you.

Thank you. Next up, Margaret Mead for Hawaii Christian Coalition, in person, in opposition. Llasmin Chaine, Hawaii State Commission on Status of Women in person.

Hi, yes, me for the Hawaii State Commission on Status of Women. I stand on my comments.

Thank you. Next up, Rebecca London testifying for DraftKings on Zoom.

Good afternoon. Chairs and Vice Chairs, Committees on Economic Development and Commerce and Consumer Protection. My name is Rebecca London. I am a Senior Government Affairs Manager for DraftKings. I'm testifying in support of HB1308 today. You have my complete testimony in written form in front of you, and I stand on my remarks that I submitted.

And I welcome any questions that you may have regarding my testimony or anything else that has come up this afternoon. Thanks again for your time.

Thank you. Next up, Les Bernal testifying for Stop Predatory Gambling on Zoom.

Hi, good afternoon. I'm here to testify very briefly. I submitted extensive written comments for the Committee. There's one theme I just want to emphasize with this Committee today that Hawaii is a model for the United States when it comes to predatory gambling.

That the state, today, the people of this state, have experienced better economic mobility out of poverty, you have less wealth inequality, you have more stable families, you have less addiction, you have less domestic violence, you have stronger communities, you have less state budget problems, and you have lower taxes because the state officials over the last 40 years have said no to predatory gambling.

The rest of the country, we have a system of taxation by exploitation. And Hawaii is a model for us. And that's, you know, it's something we're very proud of. And the last thing I would Just say, like, no one can point to a state where this has been successful.

A vote for online sports gambling is a vote for a lottery. It's a vote for casinos. It's a vote for slot machines across your state, because once you open the door, you cannot stop it. Thank you.

Thank you. Next up, Christine Otasai on Zoom.

She's not available on Zoom Chair

Thank you. Boyd Gaming, testifying in opposition. Kathleen Owen, in support. Cole Wogoman, National Council on Problem Gambling, with comments. Dwayne Bautista.

Good afternoon, Chair, Vice Chair and Members of the Committee. My name is Dwayne Bautista. And a quick testimony on why I support House Bill 1308. Hawaii needs new money. I was reading the draft one and draft two of the licensing, and the draft 1 and 2 said 250,000 for the license. Somebody now draft three it's blanked out.

So right there it tells me that maybe that number is too small. We're gonna up it. That's new money right off the bat. If you go, even if it was 250,000 times four operators or license, that's 1 million of new money. And we never even stopped the gaming yet. We did talk about West Virginia. 10%.

At 20 million in five years, that's at 10%. Prior testimony said that 10% was too small for Hawaii. We maybe we go 20%. 20%, that's 40 million. Let's say within five years. 40 million plus the operator fee. That's another million. We had 41 million yet and we didn't even start. That's my testimony.

That's the money that we could use to help education. Okay. And, you know, like I said, help out the state with the education and whatever funds that we shortchanged on. Thank you guys aloha.

Thank you. Next up, Gregory Masakian on Zoom.

Not available on Zoom Chair.

In opposition. Brett Kulbis, also on Zoom.

Good afternoon, Chairs, many Members. My name is Brett Kulbis, 26 year Navy veteran. I live in Eva Beach. I strongly oppose HB1308. While proponents argued the potential economic benefits, the social and community cost far outweigh these benefits. Legalizing sports betting will lead to a surge in gambling addiction. As seen in other states.

It can devastate families and communities, increasing financial hardship, mental health issues and crime rate, and rising race crime rates. Hawaii has no existing infrastructure to address the rising gambling addiction that this Bill would bring. It will turn our islands into a hub of predatory industries that profit at the expenses of our residents.

Additionally, most of the profit will flow out of Hawaii to mainland corporations. Rather than benefiting local communities. DCCA has already expressed concerns about its capacity to regulate this new industry effectively. I urge you to defer HB1308 and prioritize policies that truly protect and uplift our residents. Mahalo.

Thank you. So we have numerous people in opposition, as well as we have about eight other people in support. Is there anybody else willing to testify this motion?

Good afternoon, Madam Chair, Committee Members. My name is Cliff Laboy. I'm with the Iron Workers Union Stabilization Fund. I'm mostly here on behalf of Hawaii Building and Trade Council. We heard all the testimonies on supporting and non supporting. We need to bring new money into the state.

Unless you guys can tell us what you guys got planned to bring, generate new money in the state, this is the only vehicle we see that we should jump on right away and get it started. Granted, we need to put together a task force and committees to look into the system and see what's out there.

But again, I'm here representing 35,000 construction workers, electricians, elevators, operating engineers, plumbers, sheet metals, masons, boilermakers, bricklayers, iron workers, IBEW 1260 and the laborers. They're all trying to see what we can do again to bring new money to the state. That's your job. We hope you guys can come up with a solution.

If you guys want to kill this Bill, show us what you guys got planned to bring new money in the state. We concerned about losing our construction people. Everybody say construction is the big thing now. Yes, it's a big thing. But construction workers only work seven months out of the year compared to state workers and city workers.

Thank you very much.

Anybody else wishing to testify in this measure?

Aloha. Madam Chair, Vice Chair, Members of the Committee. You know, moving forward with this Bill before the study is complete ignores the process lawmakers put in place. True restitution for Hawaii means making decisions based on sound research, not speculation. Let the working group's work finish, review their recommendations and determine the best course of action.

So I want to emphasize the study should be completed first. Pushing ahead before the results are in is premature. Essentially putting the cart before the horse. The revenue projections are misleading. Regulation comes out at a cost which the state and the taxpayers are going to end up doing.

For these reasons, I urge the Committee to reject HB1308. While not opposed to gaming, as we believe there is a great plan that can be achieved. Let the working group conclude and base decisions on real data, not speculation. One year will not make a difference.

Thank you. Anybody else wishing to testify? Please. Thank you.

Hi, good afternoon. Chairman, Vice Chair and Members of the Committee. I oppose this Bill because- I'm Doreen Morimoto and this is personal testimony. I oppose this Bill because it encourages the wrong kind of entertainment. It starts with fun and games, but leads to gambling addiction.

A bet or a wager makes it thrilling and you end up chasing the money. My husband had an addiction to gambling and I lived through his struggle and all his pain. After losing all our assets and being depressed, he had to work three jobs just to get us out of debt and his health was compromised.

I have heard countless of stories of how gambling destroys lives and tear apart families. The house never loses. Where is the profit or the juice money going? Will you be building rehabilitation facilities and hospital that treats all addictions? Please protect our beautiful state. We don't want to live on Devil's Island. Thank you.

Anybody else wishing to testify on this measure? Thank you. Anybody else wishing to testify on this measure? Seeing none. Members, any questions? DCCA please. If this, if this passes, how long would it take to implement the regulatory framework?

I actually don't know. I mean, the complexity of what would be involved to stand something like this up. I looked at one of the things that's required is that we promulgate rules under Chapter 91.

And I was looking at one state, for example, where I went and drew up what the rules were that they had put in just for sports wagering. It was this thick, very, very small print. So there's a lot that's really involved, and I think when.

I don't think anybody here has really set out what would be involved to build something like this from the ground up. Because most of the states where this is legalized have done so through a separate Gaming Commission or, you know, some other kind of separate agency that is charged only with regulating this.

And then sports wagering ends up being a component of what the Commission may be charged with reviewing, including, for example, casino gambling and others. Other gambling activities. So when we look at something that's isolated like this and to have to start up the framework to regulate something, this is all online. This is online sports wagering.

So we're really not, you know, the idea that we're going to have to be able to find the right people to be able to staff something like this and build it from the ground up is something we review as considerably complex and very expensive.

And so in my testimony, what I was trying to point out there was in a- Board Gaming I think testified in one of the hearings in front of the House committees.

And their particular point was when they look at the idea of revenue generation from this activity, they said many other states in comparable size markets to Hawaii that have passed isolated sports wagering legislation have been disappointed in the outcome.

Tax revenues from online sports wagering are often less than anticipated, and revenues are usually not sufficient to fund or sustain regulatory and enforcement oversight and a responsible gaming infrastructure, which are crucial components of any gaming framework.

So this tells me, and this is a body that has looked into how this has been done in other states where this is the only thing that you have for gaming. It just doesn't make economic sense. So I don't know how long it would take.

It would take us a lot of time to start researching it and figure out what kind of personnel we're going to have to hire and look for and what kind of framework has to be done, because we don't currently regulate anything like this.

So under this Bill, the sports wagering is not gambling. Is that because of the exemption from gambling Provision on page 20 of the Bill?

I don't know if I thought it was meant to be so that it doesn't- It's not considered illegal under the criminal yet provision. I mean, so this is the idea is to basically take it out of what's illegal under the criminal code and basically making it legal. And that's their way of doing it.

To say that it's not gambling. But, you know, to say that it's not gambling is really just a misnomer. This is gambling and it's just done online. Anybody can do this. Once you're-

We talk about how the fact that it's currently ongoing anyway in Hawaii. But just the idea that you legalize something like this, this is something everybody can have right on their phone.

They can have an app that just tells them whenever they want, when they're waiting for a bus, they can just go right in and bet on it. And it's going to increase the number of people who are going to feel like this is something they want to engage in for an activity. Okay, thank you. Thank you.

I have a question.

Senator Kim?

So, Nadine, you mentioned there are states that have standalone.

Apparently there are. I mean, I was looking, I was reading Boyd Gaming's testimony.

How many are there?

I don't know.

So you haven't researched it?

I haven't because when this was originally filed as the regulatory Department was with BDEDT, and I know DBEDT has been chairing a working group on this matter. So their research may have indicated specifically.

Okay, but then you, you were preparing for today. Obviously you did your research. You looked up what, what Boyd said or whoever it is you quoted. So when you did that, you didn't bother to look up how many states had standalone and what it took.

Well, what I remember was from looking at the presentation that DBEDT did in the working group, and I didn't bring it with me today, but they had specifically slides indicating that in, I think the testimony is that it's legal in 38 states. And they had broken it down into a number of states where primarily they were in states where they have a separate gaming Commission and there's a specific framework for gaming that's in the- state that doesn't put it within a State Department or regulatory agency.

They have a separate office for that. And, and when I looked at the types of different structures that had been put through in other states that DBEDT had found there were in all instances, sports wagering was just one component of what the Gaming Commission.

I understand that you said that already in your testimony, but you didn't mention when you read the quote that there are other standalones. And so my question was, you know, where are those states and whether or not you research it as you prepared for today.

I'll have to be honest with you. I have not looked into which states are isolated, except I looked at Boyd Gaming's testimony and saw that they have done something. Now, I think they submitted testimony before this Committee.

Well, I'm asking about.

But I did not. I have to be perfectly honest. I'm- I did not do any research for DCCA.

Yeah. So if it goes to DCCA. And then you did say that, you know, there's a lot that go into it and I agree with you. But there are other states who have done it and standalone, as you mentioned. So I would hope that that's something that you at least look into in case with the questions.

And that is something that. Because this is probably not going to go away. Whether this passes today or not, it's not going to go away. So I think that you need to come prepared with some of this information. And you know, because we're going to have to find out and ask what does it take?

And are we looking at those states that have it standalone and not necessarily looking at the others as to what went on and whether that's good or bad, that something has to be determined. And I'm asking you to do that. But certainly looking at-

Well, certainly if this measure Passes. I would certainly look into what states have only an isolated sports wagering program and then try and find out what, how they set that up. I would certainly do that.

Yes, I hope you would do that. Thank you.

Any other questions? Senator Wakai.

For the Attorney General's Office. Your testimony alludes to your anticipation that crime is going to spike if we go down this route. But we already have a lot of crime going on in gambling houses, I think.

HPD Narco Vice says that they estimate there's 60 gambling houses just on Oahu that function every night, pull in like $10,000 in action. We read about it in the paper. Where there's stabbings, there's shootings, there's a lot of violence already associated with gambling. Right.

So it's not as if we're starting with zero, that somehow this is going to introduce some kind of organized crime and violent behavior. It's already here.

That's correct, Senator.

And then earlier the woman mentioned how her husband was addicted to gambling and ruined their families.

And are you aware of any gambling addiction intervention program in the state to help people like her husband?

I am not, Senator.

Right, so this Bill actually funds a program to address those who suffer from gambling addiction. I mean, we have some high profile cases where we saw how gambling addiction ruined people's families. Right. That Mililani Athletics Director stole $400,000 from the athletic boosters to pay off his gambling addiction.

There was no services whatsoever to help him and others in similar situations. So this Bill actually will help the fact that we do have a gambling problem that already exists in Hawaii without sports gambling. And this will pay for programs to help those who are already suffering from that type of addiction, Correct?

Yes, Senator, I agree that the Bill does propose carving out that. But what the concern is the studies that we did cite is specific to sports wagering online. And it's going to open the Pandora's box.

Whoever's illegally gambling now versus if this Bill passes and anyone can do it now on the convenience of their phone is a huge difference between the two. So that's our concern.

But those who are opponents to any type of wagering here act as if like Hawaii, we're starting from zero. And there's is we're introducing those things.

I mean, people we know are, you could change the VPN on your phone to like be I'm in Nigeria and I made the bet out of that state or not, that's that country or another state, for example. So this we're just going to legitimize it, legalize it, and have the opportunity to tax it.

Those who unfortunately get into trouble because of sports wagering, legally or illegally, can have resources and social services in Hawaii that just don't exist. And it just baffles me how the folks that are anti every kind of gambling think that there's nothing going on here. I mean, we all know that that's Hawaii's favorite destination is Las Vegas.

And I mentioned we have gambling houses in our community. We're not starting from zero. There's already prevalence of gambling here and I think this Bill addresses that and I think provides resources to help those who unfortunately fall into addiction.

Understood, Senator, thank you.

Can I follow up on one thing he said?

Senator Kim?

Okay. I don't know how many people here play games on your phones, but I know when I play games on the phone, it always pops up that I can play bingo and I can win money. I mean, I can play solitaire and win money. So I mean.

So I'm not sure what your response is, but it's already there and I'm sure a lot of people are doing it already. It's so easy. And it looks like they're just playing a game of solitaire, but they're gambling, right? Is that considered illegal gambling, solitaire games?

I don't know, Senator. I'm not aware of. I haven't run into those types of apps Personally, so I can't speak to that.

Yeah, I mean, you don't even have to, you don't even have to access it. It comes up and press this button and you can play and win money and they guarantee you your first $50 and stuff. So I mean, I just. You're testifying that it's going to be so easy. I'm just, maybe you need to get educated as to how easy it is already. Okay, that's all I wanted to say.

Thank you. Okay, well, I'm going to go straight into decision making.

You know, I can appreciate the testimony, the concerns, you know, it's all around us and you know, we have a problem with regulating a lot of the stuff I believe in this state and I think we can only help it if we address the concerns head on.

I appreciate the fact of the testimony on both sides and I'm going to move into decision making right now. HB1308 relating to sports wagering. I want to make sure we have a good conversation going forward. I'm going to move this so maybe DCCA can do a little bit more homework as it moves on down.

Can do a comparison on other areas of where this will take us. Maybe it might not be the right fit at the end of the day, but the conversation should be had and we should be addressing this up front.

So I'm going to pass this with an SD1 by replacing DCCA with DBEDT, since DCCA has stated that it may not be suited to regulate this operation. The Senate Bill SB1561 also had DBEDT as a regulatory body. Modified the definition of qualified gaming operator on page four.

So a Hawaii based operator can also be included in the future. And on page 85 include Hawaii or another US jurisdiction and make any necessary technical amendments.I ncorporated in the Committee report the concerns raised by the testifiers regarding any fiscal and tax matters. Also note the concerns that are raised by DOTAX, DCCA and BNF. Any discussion? Senator Kim.

Thank you for your recommendation. You know, there are a lot of concerns regarding this measure and not everything's been answered. I know that any Sunday, if you're watching football, almost everybody's betting on the game. Whether it's $5, $10, $20, I'm not sure what that constitutes.

But almost everybody, I'm sure law enforcement people sitting in this room have betted on games at home as well, with their friends in their offices, all kinds of parlay and 6-5. So it's already there, looking in our face.

However, I would like to propose that we put an amendment in there that part of the proceeds, a percentage of the proceeds, would also go to education K-12. I think that's something that we all want to see.

And I know that if there are profits that come out that's going to benefit the people of Hawaii, that education should be first on this. And I'm sure there's others. I'm sure there's, you know, housing and so forth. But I would like to include that should this matter pass. Thank you.

Thank you. So noted. Any other discussion? Seeing none.

Yep. We will incorporate it as an amendment. Okay. Any discussion? Seeing none. Vice Chair for the vote. Chair votes aye.

Is that an amendment?

I vote yes.

Senator Fukunaga? Senator Kim?

Senator awa? Chair, your recommendations adopted. Thank you.

CPN same recommendation. Passing with amendments. Chair votes aye. Thank you.

Vice Chair also votes with reservations. Senator McKelvey is excused. Senator Richards? Senator Awa? mMeasure is adopted.

Thank you. And with that, we are adjourned.