Tourism and Gaming Working Group

Welcome to the Tourism and Gaming Working Group. This is our fifth meeting, and today is Wednesday, 04/15/2026. It is 11:35 AM, and we are at Conference Room 430 at the State Capitol. We want to start off at the top of our agenda. It's going to be the introduction of members.

Myself, I am the Co-Chair for the working group. Let's start off with our view of the members in Zoom. IT, could we get a better view of who we have in Zoom? It'd be okay if we could have that even bigger.

Thank you everybody for your patience. We're just, oh, perfect. Alright. Let's start the introductions with the members in Zoom, and then we'll introduce all the members here in the room. Do we have any state agencies in Zoom?

Yeah. I'm Jim Dillon. I'm a psychiatrist representing adult mental health in the Department of Health. Thank you.

Thank you. Let's continue on. Who would like to go after Jim?

I will, Chair. This is Darrin Sato, clinical social worker, private practice, private sector. I apologize, my camera is not working on my computer, so my apologies.

It's all good. Thank you.

Hi, Chair. Paul Anderson with BOYD Gaming.

Thank you, Paul.

Good morning. On behalf of FanDuel, Arturo Barajas.

Thank you, Alan.

Mr. Chairman, it's Alan Feldman with the UNLV International Gaming Institute.

Thank you.

Hey, Mr. Chair and fellow members. Kent Caputo with Marnell Company. Sorry I couldn't be there today. I hope everyone's doing well with all the weather and flooding and the like that I've been dealing with here for a while.

Thank you for being here.

Mr. Chairman, it's Kurt Gissane from Aristocrat Gaming.

Alright. Who else? If there's no further members in Zoom who is part of the working group, we're going to move on to the room. Let's start off with our newest member, Representative Tam. Please introduce yourself.

Aloha. My name is Adrian Tam, House District 24, and Chair of the House Tourism Committee.

Michelle Puu from the Attorney General's Office.

Hi, Stanford Carr from Aloha District Partners.

Art Tolentino, Unions.

Jimmy Tokioka.

Brandon Maka'Awa'Awa, Nation of Hawaii.

Gary Suganuma, Department of Taxation.

Tyler Iokepa Gomes, Hawaii Council.

That's everybody in the working group. Thank you for being here. Let's start with our presentation. We have Tres York, Vice President of Government Relations of American Gaming Association.

Tres, are you present?

Yes, I am, Mr. Chairman.

Tres, I want to just share with everybody your bio. Tres is, first, as I mentioned, the Vice President of Government Relations at the American Gaming Association, where he leads the state advocacy and regulatory engagement. Prior to arriving at AGA, Tres served as legislative director for the National Conference of State Legislatures, NCSL, a bipartisan organization that represents all 50 state legislatures across the US. NCSL led advocacy efforts on gaming, financial services, and technology issues, both on Capitol Hill and with federal regulators.

He previously led the political affairs operation for the MIBOR Realtor Association, coordinating their fundraising and candidate endorsement efforts, worked as a legislative staffer for the Indiana House of Representatives and for former US Representative Duke Messer, in both federal and political roles.

Tres was named to the Emerging Leaders of Gaming Forty Under Forty class of 2024. Tres, we look forward to your presentation. I know you're going to also speak on behalf of Chris.

Yes. Yes. Thank you, Mr. Chairman and members of the working group. Thank you for the opportunity for the AGA to provide input regarding state gambling statutes and their associated regulatory frameworks. For those of you who may not know, the AGA is the premier national trade group representing the $329 billion US casino gaming industry.

We have a diverse membership that includes commercial and tribal casino operators, US licensed sportsbook operators, gaming suppliers, and other stakeholders committed to the highest standards of integrity, responsibility, and regulatory compliance. My comments will address the national scope of the gaming industry today and some of the considerations that come with legalizing gaming in any given state. So nationally, the legal gaming industry supports 1,800,000 jobs and directly employs more than 700,000 people across the country, which is more than the postal service or the air transportation sectors.

Direct casino employees account for one in every 33 leisure and hospitality jobs in the United States. And in 2025, gaming revenue in the commercial casino sector in the US, including online products such as sports betting and online casino gaming, where they grew by about 9.2%, was $78.7 billion. When you include tribal gaming revenue, total US gaming revenue in 2025 reached $125 billion.

Collectively, the legal gaming industry, as I mentioned, supports 1,800,000 jobs, over $104 billion in wages and salaries, and more than $52 billion in tax revenue to federal, state, and local governments on an annual basis. Gaming has been embraced by communities across 46 states so far and the District of Columbia, where various forms of regulated gaming are now permitted. So to kind of level set everything, state gambling laws occupy a unique legal position because they balance revenue generation, consumer protection, and the prevention of criminal activity.

As both legal and illegal gambling markets have expanded, particularly through online platforms, state regulation has become increasingly complex and, of course, even more consequential. In some states, gambling is governed by constitutional

provisions and may require constitutional amendments to authorize casinos or sports wagering, and other states require legislative authorization alone. Most states prohibit gambling as a general rule while carving out explicit statutory or constitutional exceptions for authorized activities, which generally commonly include things like a state-operated lottery, regulated casino gaming, pari-mutuel wagering or horse racing, tribal gaming conducted under the Indian Gaming Regulatory Act, limited charitable or social gaming, and then, of course, sports wagering and iGaming or online casinos.

Today, there are 27 states with commercial casinos. There are 30 states with tribal gaming, 40 states with legal sports betting, and eight states so far that have legalized online casino gaming. While the specifics vary from state to state, legal gaming is overseen by a state regulatory agency or state regulatory body such as a gaming commission or a lottery authority.

These agencies are responsible for a whole variety of things such as licensing operators, employees, and vendors, enforcing compliance with statutory and administrative rules, conducting audits and investigations, preventing fraud and money laundering and infiltration by organized crime, and then, of course, ensuring revenue is properly collected and distributed. Licensing standards often require things like background checks, financial suitability reviews, and ongoing compliance reporting. And penalties for noncompliance oftentimes include fines, potential license suspension, or in severe cases, criminal enforcement.

So on the tax front, state revenue generation is often an important consideration around whether to legalize any type of gaming. State revenue from gaming taxes can be allocated in any way that a state legislature sees fit.

Many states use gaming tax revenue to fund education programs or infrastructure improvement projects, public safety initiatives, and other priorities important to the citizens of each particular state. For example, Florida allocates slot machine tax revenue to their Educational Enhancement Trust Fund, which is within the Department of Education. In Illinois, tax revenue is divided between the state's capital projects fund, education assistance fund, school infrastructure fund, and then the casino host community government, among other recipients. Ohio is another example.

They allocate the vast majority of their gaming tax revenue to each of their 88 counties and the host cities where the casinos are located.

In Michigan, gaming tax revenue is deposited into the school aid fund for statewide K through 12 classroom education. So as you can see, a state legislature has full discretion as to where that tax revenue goes depending on what is most important in any given state.

And one important consideration when thinking about gaming tax rates is to ensure that legal operators are able to provide competitive products and odds to consumers who continue to have access to illegal offshore sites that obviously do not pay any state gaming taxes. So on the enforcement front, in states that have chosen to legalize some form or forms of gambling, unauthorized gambling remains subject to civil and criminal penalties.

Typically, states criminalize activities such as unlicensed gambling operations and bookmaking, the use of gambling enterprises to facilitate money laundering, and then certainly any attempts to tamper with gaming devices or outcomes.

And even after legalization, continued effective enforcement depends on coordination between a whole variety of stakeholders, including gaming regulators, state law enforcement, and, of course, federal authorities. One of the other important things that states consider when they're looking at whether or not to legalize gaming is obviously consumer protection. So one of the key factors that policymakers take into account is the reality that in many cases, these activities are already occurring through the illegal offshore market or with other illicit operators.

So we recently estimated at the AGA that Americans wager $674 billion a year with illegal offshore sportsbooks and iGaming sites, as well as through proliferation of unregulated machines across the country. And these unregulated operators provide none of the consumer protections that the legal market does, from developing responsible gaming tools to anti-money laundering compliance and know-your-customer protocols.

State gambling statutes are designed not only to regulate economic activity, but also to protect the public. And while each jurisdiction determines its own responsible gaming regulations, there are many commonalities across all the states. One of the most common elements in states' responsible gaming frameworks includes the ability of players to exclude themselves from either land-based or online gaming or both, for defined periods of time, if not permanently.

Some of the other consumer protection measures include things like minimum age requirements, advertising restrictions, employee training, limitations on the extension of credit or the ability to fund accounts with credit, problem gambling disclosures, and funding for addiction treatment and responsible gaming initiatives. And importantly, consumers currently engaged with offshore sportsbooks are not provided with responsible gaming tools to encourage responsible play.

In contrast, the legal gaming industry is committed to providing a fun and sustainable gaming experience and invests heavily in research and programming, and consumer education to ensure that players have the tools that they need to play the right way even when they don't win. And last year, the legal gaming industry committed $471.8 million to responsible gaming programs, including customer service interactions, consumer-facing education, and responsible gaming education.

The industry also released the first of its kind responsible gaming intervention effectiveness scale, to help provide academics and industry members and others with a research-based tool to evaluate various responsible gaming measures. And additionally, at the AGA, we launched our Play Smart from the Start messaging platform last year that was designed to encourage players to make informed choices and develop habits that keep gaming fun and a form of entertainment.

As we consider the potential future of legal gaming in Hawaii, there are certain broad best practices that can be gleaned from the experiences in other states.

Number one, I would say is clarity, in the sense that statutory definitions and regulatory authority should be unambiguous and made very clear in statute. Number two is consistency. Similar gambling activity should be regulated under comparable standards. Number three, adaptability. Regulatory frameworks should be capable and have the flexibility of responding to technological change.

Number four, transparency and accountability. Regulatory agencies should operate with clear oversight and public reporting. And several issues currently facing regulators and lawmakers across the country illustrate why these principles matter.

There's various issues currently being considered by regulators and lawmakers in the US that demonstrate the types of technological and competitive innovations that a regulator needs to be equipped to deal with, including things like the use of digital currencies and cashless wagering systems, things like distinguishing games of skill from games of chance and sweepstakes games from gambling, regulatory parity between land-based, online, and tribal gaming, and the recent emergence of sports betting on so-called prediction markets.

And many existing statutes were drafted before these issues emerged, kind of creating ambiguity and, in some cases, enforcement gaps that legislatures and regulators are now kind of forced to address.

So to kind of wrap things up in conclusion, I think that as gambling continues to evolve and scale and form, states that choose to legalize gaming must ensure the regulatory and legal frameworks remain clear, remain enforceable, and aligned with contemporary modern risks. Whether or not Hawaii ultimately chooses to authorize any form of gaming, the experiences of the 48 states that have done so can offer valuable lessons in regulatory design and consumer protection.

And so, Mr. Chairman and members, the AGA and myself appreciate the opportunity to share this national perspective with the working group, and

appreciate your time and happy to try to answer any questions. Thank you very much.

Thank you for your presentation. Any questions from members here in the room to start off with? Go ahead.

Mahalo, Tres, for the presentation. Hawaii has a pretty specific setup with geography, with tourism, and no existing framework. If you had to point to the closest real-world comparison, what would it be? And where does that comparison stop being helpful for you, sir?

That's a tough question. Geographically, I'm not sure that there is, obviously, a comparison. And then from a tourism standpoint, Hawaii's tourism industry is obviously one of the driving factors.

And so I don't know if there's a good comparison by any state, but I do think that there are a number of states that can be looked at where the state laws and regulations, specifically on a regulatory flexibility standpoint to allow regulatory agencies to adapt as well as enforcement tools, can be looked at as good blueprints.

For example, one of the states is a state like Michigan where illegal gambling has been a top priority for them, but they also have benefited in Michigan in ways that some other states have not, where their state statutes are extraordinarily clear and well written.

The gaming control board is given clear authority to go after illegal gambling operators, and they have that criminal and civil jurisdiction authority within the agency itself. And they're also funded appropriately. So that's another issue that a number of other states have had, which is a lack of funding or perhaps funding to hire expertise in order to conduct various types of investigations.

Again, I'm focusing in that example on the illegal gambling side of things, but broadly speaking, having clear laws that are written where a clear authority is delineated between what a gaming regulator can do is, I think, particularly clear.

And, again, that applies beyond just the illegal gambling, but it's true with any type of compliance issue, obviously, responsible gaming, any type of consequences for failure to comply, with fines or license revocations, all of those types of things.

I think, again, as I mentioned, clarity is particularly important. And if you look at a state like Michigan, for example, one of the reasons why they have been so effective and have been able to send out an incredible amount of cease and desist letters and have the success against illegal operators is because they have that clear statutory authority in their state law that some other states are struggling with. So I don't, I'm sorry.

That may not entirely answer your question, but I do think that that kind of clarity of purpose in a statute can really affect multiple different layers of the kind of legal gaming structure.

Do you have any follow-up questions then?

Go ahead. Yeah.

Tres, that's okay. I appreciate the answer because, I mean, we've been looking at it too. It's really hard to find a model that compares to Hawaii. But speaking of illegal gambling, there's already illegal and offshore activity in most markets before legislation, including here. Yeah.

From what you've seen, does legalization actually replace that activity, or does a good portion of it tend to stick around?

So that's also a good question. We have seen by the data that we have that legalizing gaming does reduce to some extent the amount of activity going on in the illegal market. We also have conducted a wide array of polling of folks that they have said that it's particularly important to them, in states where there are legal operators to wager with, it's very important for them that they do bet with legal operators as opposed to illegal operators.

One of the challenges that we have faced for a little while now, and it's gotten better to an extent, but there is a kind of an education gap that has been bridged a little bit. But there is still a gap where there is still some consumer confusion as to what operators are actually legal and which are not.

For example, we worked over a period of time with various search engines where it's not so much the case now, but for a long period of time, if you typed into a Google, is Bovada, which is largely regarded as one of the largest illegal offshore sites operating in the US.

Is Bovada legal in the United States? The top search result was some kind of erroneous answer that said, yes, Bovada is legal in 45 out of 50 states except for these five states. And, of course, the answer is actually it's legal in zero states. And so that type of erroneous information, that even if an American player wanted to find out if a site was legal or not, there it did lead to a large amount of confusion.

That has dissipated to some extent online, and state gaming regulators and state attorneys general have also really stepped up their game with issuing press releases and obviously listing out legal operators on the site to try to make sure that Americans do know in any given state the actual licensed operators that are legally operating. But the illegal market is still an enormous problem, as I mentioned.

And so from an enforcement standpoint, states have certainly taken the lead in going after illegal offshore sites. They have been successful in many cases, but ultimately, at the end of the day, where we really need the enforcement to come from is the federal government, where both the resources and the jurisdiction lies with them.

And so we've worked diligently with the FBI, with the Department of Justice, to try to raise the profile of this and try to encourage them or provide them with as much information as we can to go after enforcement.

In the meantime, states are, you know, taking up the slack.

So In the end, yes, we do see there are players that are migrating from the illegal market to the legal market when there is legalization. And then again, importantly, in the polls that we have conducted of American players, it's particularly important for them to bet with legal operators. Sometimes the challenge becomes it's not always clear to them which operators are operating legally and which are not.

For example, and then I'll stop rambling here, but there are some of these, I think they're operating illegally personally, but in some states, you could call them gray market operators, such as these so-called sweepstakes gambling operators, which are essentially operators that provide online casino gaming to the public, but they do so under the guise of a so-called sweepstakes model.

And for the average American, these guys say it's, you know, it's free to play.

We're operating legally, etcetera. Many states have taken an affront to that and have issued cease and desist letters and have passed legislation to explicitly ban these types of activities. But, again, those types of operators are kind of operating in what charitably could be defined as a legal gray area, and that also makes it more difficult for consumers to make a determination as to what is actually legal and licensed and what is not.

So we're going to continue to work diligently to make sure that consumer education and knowledge about the legal options continues to increase. And, again, we're light years from where we were even two or three years ago, but there's still a lot of work to be done.

Thank you. We'll take another question in the room and then we'll go on to Zoom for questions.

I have a question. It's a little farfetched. But you mentioned education for your employees of revenue that's collected from gaming. And it's also listed here, funding for addiction treatment and responsible gambling initiatives. Now, I'll just step aside for a little bit and explain what a bartender does.

A bartender has a customer and the customer is drinking and all of a sudden he feels that this customer might have too many. So the bartender has a responsibility to say, hey, that's enough, why don't you cool off, go home. So how do the dealers or the pit boss employees identify a troubled gambler? And what triggers or initiates the counseling or education for addiction?

Yeah, that's a great question. So employees are trained on a wide variety of topics, specifically at physical casinos, and we actually have a kind of a best practices code of conduct for physical casinos that include a lot of employee training. Obviously, problem gambling is certainly a part of it, where dealers and pit bosses are trained to spot particular types of things. There's obviously financial checks that are often ran.

And to your point, even beyond gambling, obviously, overdrinking is something that bartenders are also trained to spot so that there's not commotion in various things that occur. Additionally, there are a number of other things that employees are trained to do, and specifically one of the big ones is anti-human trafficking. And so, unfortunately, casinos have historically been places where human trafficking has occurred.

And so employees are specifically trained on various types of characteristics to spot in a person, whether it's, you know, power, whether it's darting eyes, whether it's bruising, any types of these kinds of, perhaps what would be considered strange physical conduct, employees are trained to spot these types of things and then engage with someone if they believe that they are in trouble.

And then the other thing that's particularly important on the anti-human trafficking side is that the pipeline between the casino and the casino employees and law enforcement is very strong, but it's also taught to all of the different levels of casino employees.

So if something is seen that is particularly problematic, they know who to go to to spot something to make sure that can be investigated further. And then certainly, if there is something particularly concerning, then the pipeline with law enforcement is automatically activated. And so that process has been particularly streamlined, but it's all kind of part of that training that employees are taught to go through at a casino.

And then the other thing I'll also mention is, from a problem gambling standpoint, obviously casino companies have exclusion lists. And so if anyone is placed on an exclusion list, whether they placed themselves or whether they were placed on there for a variety of reasons by the casino, that person is not allowed to gamble at any property.

So that's another valuable tool that can prevent folks that have been determined to have a problem, again, either by admitting it themselves or they have shown some conduct in the past. That's another tool that is utilized to try to reduce that harmful impact as much as possible.

But again, the training of employees standpoint, it's a wide variety of different issues, and we actually have been working a lot with law enforcement, particularly on the anti-human trafficking side, to try to make sure that that is reduced as much as possible. And those programs, we actually have our anti-human trafficking task force at the AGA that includes all of our members that's very active in that.

And so the training of casino employees is particularly important, and we're going to continue to make sure that the employees and our members obviously make sure that their employees have all the tools that they need to make sure that the properties that they operate are safe places.

Alright. Do you have any follow-ups?

Yeah. Okay. So, I get all the law enforcement. But how does a troubled person enroll into a program, a rehabilitation program?

Through the money funds. Yeah. So each casino property has programs that allow folks that are either spotted or that have admitted that they have a problem to talk to someone, and there's various programs that they can then be provided with information to.

And then, obviously, as I mentioned, the exclusion program, all of those things are available for those folks who either the property believes is betting erratically or if the person themselves, which often occurs more than some folks may think. There are people that realize that they really do have a problem and then seek help when they're kind of on the verge or something.

That happens frequently, and those tools are in place on the ground to give those folks the resources and the information that they need.

Thank you, Tres. Appreciate you.

Absolutely.

We're going to move on to Zoom. Are there any questions from Zoom?

Hello, everyone. This is Bo Bernhard. Can you hear me?

Yep.

Bo, you are representing. Are you a member of the committee?

Go ahead.

Yeah. With apologies, my audio wasn't working earlier. Good morning. And I wanted to just check in, but also speak to some of these issues.

Good morning from Sydney, Australia, actually, where it's really interesting. I'm working with the government here on these very same questions. I really

I'd like to have a good segue. I just want to notify everybody that our Co-Chair, Senator Lynn DeCoite, is here as well. And are there any other members that came in who haven't been introduced? Okay. Alright, Bo. Go ahead.

Yeah. I just was going to speak to a couple of these issues, and I've really enjoyed the presentation. Thank you so so much, Tres. Here in Australia, here in Sydney, I'm here to work on these very same questions. How do we maximize the benefits?

How do we address downsides? And I'm headed from here to Japan, which is a really interesting road trip, because in working with the government in Japan, working with the government in Australia, I'm working directly with, as you know, Hawaii's number one and number three largest international markets for inbound tourists. Both of which, after a lot of thoughtful debate, have decided to move forward with resort-style casinos to drive up tourism and compete for people in this particular neck of the woods.

In fact, Japan is about to decide to build a second resort after going under construction with the Osaka one. So it's an interesting time, certainly, and I really appreciate the work we've done to look at other states for models.

There also are, of course, because Hawaii is a place that has to sort of look left and look right, because it's situated in the middle of the Pacific Ocean, to both east and west and to the marketplaces in both places. And I can speak to the really good questions, and just talk a little bit about what we see here. We talked about helping those who are hurting, in the facilities here in Australia, and it's also going to be the case in Japan.

Every machine has a button that you can push very surreptitiously, very confidentially, and immediately you will be responded to by a responsible gaming ambassador. Both jurisdictions that I'm in this week also have a very kind of zen-like room facility.

I was talking to my Australian friends and noting that in the history of bars, I don't think there's ever been a room, a beautiful room attached to the bar where if you're concerned about your drinking, you can go in and speak to somebody who has counseling expertise. And yet that is a common best practice in both of these jurisdictions. And so once more, it's been a fantastic exercise. Again, I appreciate everybody for letting me chime in and check in.

And I look forward to perhaps in a future meeting our conversations on not just the jurisdictions sort of to the east, but also the jurisdictions to the west over here in Asia, in Australasia, really, and the ways that they've worked to answer these very same very important questions that we care so much about with regards to Hawaii.

So thank you, Mr. Chair, and thank you, Tres, for your excellent presentation.

Do you have any input and feedback, Tres?

No. Bo is spot on, and I appreciate his insights. He's a legend in our industry. So great.

We did hear Bo's presentation earlier this year, and it was great. Are there any other questions in Zoom?

Mr. Chair, if I could.

Go ahead, Board Member.

Tres, thanks for the presentation and really enjoyed that. And you guys are the legends in the industry as well. So the AGA has done tremendous work, not to take anything away from you, Bo. Sorry. But I wondered, you guys are on the forefront of enforcement and the education and all of the above when it comes to illegal gaming.

Yeah.

To show you what the skill games versus other games as well. Can you speak to some of the key factors? And you touched on some of them. I think you talked about enforcement and clarity and some of the other items. Could you touch a little bit more on what has been successful on pushing out illegal gaming, both from a policy perspective that could be tax rates and regulatory environments as well as maybe educating consumers and providing enforcement revenue?

Are there a few items they've been sort of the, or what's the secret sauce? Probably not a few items. Yeah.

No, it's a great question. From a tax standpoint, legal operators need to be able to compete. And so having that competitive environment where they're able to do so against these illegal operators that don't pay any taxes whatsoever, is critically important, to your point, Paul, and education of consumers to make sure that they know where the legal operators are is also critical.

And then we've worked diligently with state gaming regulators, state attorneys general, with the so-called skill game machines, which essentially function like slot machines.

Paul and our group have been working hard in Virginia on this particular issue, on these machines. It's engaging with sheriff's organizations and state police in order for them to get enforcement action.

So I do think that funding is particularly important for any type of regulatory agency or enforcement agency, because one of the things that we have heard in some states is, it's not just a lack of funding, but they're like, well, we need the actual expertise to be able to hire folks that can come in and actually conduct these types of investigations mainly online in order to create the kind of legal basis to take enforcement actions.

And so the funding is important. The states that have that clarity of law, like in Michigan, have been extraordinarily successful.

And then there's also, as the more forward-thinking states have looked at it, obviously, even two, three years ago, Paul, and you know this well, we were having conversations begging gaming regulators to issue cease and desist letters to offshore sites. Now it's in the sweepstakes gambling area. But it was a lot of, well, what if they don't comply type of stuff?

Like, how are we going to get someone in Curaçao to comply with this?

And our answer was they may not comply, but they also might. These folks don't want to be on the radar oftentimes of American law enforcement. And what you saw was there has been a great deal of compliance, even from a state perspective. So when I've talked to high enforcement states like in Michigan, like in Louisiana, they say that their success rate, I'm sorry,

their compliance rate with offshore operators is almost 50%, which when you're sending hundreds and hundreds of letters potentially, that number is through the roof and is protecting consumers.

There's also data from the geolocation company named GeoComply that analyzed data from five states that have been particularly effective on law enforcement or that have been really strong in targeting illegal gambling, and then five states where gaming is legal but they hadn't taken enforcement actions. And the data clearly bears out that the number of new accounts that are being opened with legal operators increased by, you know, double-digit percentage points.

And revenue, you could clearly see a revenue shift, into the legal market from the states that had taken enforcement action. And so the last thing I'll mention is that the other thing is, certain states are getting even more and more sophisticated when they're looking at this. So it's one thing to just send out a cease and desist letter and then just kind of let it sit there.

There are a lot of states that are looking into much deeper things, which is, do we have any licensed supplier or payment processing folks in our state that we have determined are also providing services to folks that we have deemed to be illegal. And if they are, that's kind of an additional pressure point on the entire supply chain that regulators are potentially looking at.

Another thing is looking at the web domains. Where are these illegal sites being hosted? Is the web domain located in the United States?

If it is, can we get our attorney general to go to a court and try to get an injunction? These types of more progressive, creative ideas are continuing to grow by the day as regulators learn from each other, and we all kind of work together.

And so I don't know if there's a silver bullet per se, but the advancement from where we were a couple years ago on the illegal gambling front has truly been remarkable from where, again, we were back in, say, 2022. But it also requires a lot of collaboration, a lot of information sharing.

And as Paul knows well, at the AGA and, obviously, all of our members and other folks in the legal gaming industry, we want to be resources.

We have a lot of We have a lot of information on illegal gambling operations that various legal licensed operators are seeing. And so we want to be the best partners that we can with legislators, with regulators, with state AGs, to go after illegal gambling and make the legal industry as efficient as possible for entertainment purposes.

Thanks, Tres. Thank you, Chair.

Paul, I was going to ask you if you had any follow-up questions.

Oh, I actually, I do, if that's okay.

Before you get into it, I'm just going to take a quick recess, and we'll be back in five minutes. And then you can ask your questions, Paul. Recess.

We are back from recess, and thank you Paul for your patience and everyone else also in Zoom. Paul, please share your follow-up question.

Thanks, Jury Ilagan, I appreciate the extra question. Tres, I'm wondering is in your experience in research as you've seen states go from the the non gaming or illegal markets into the gaming markets, I assume there's a ramp up time as sort of folks get educated and move into those legal markets.

I'm sure Bo and Alan probably have some ideas about about this too. But, Tracy, in your experience have you seen a time frame? Does it take three years? Does it take seven years? Is there it's not a overnight flip the switch, I'd assume.

No you're right Paul it's certainly not an overnight thing, but I do think that as gaming has become more legalized and certainly if you look at it from a you know, in the sports betting context, it does seem to me that when a state does legalize for example, sports betting now, that the players do seem to migrate to the legal options faster now than maybe they even did in kind of the early years post PASPA in the, you know, 2018, 1920.

But it does take a little bit of ramp up time for folks to kind of understand what the legal online options are, but I do think it is a little faster now than it was even four years ago.

Maybe it's just because sports betting is now legal in 40 states, and so most people are aware of that. And they've heard of kind of the big names in the industry, and so that migration to the legal market for example, Missouri recently legalized sports betting, and their numbers shortly after they launched were I think, higher than a lot of people actually expected.

Makes sense. Thank you, Tres. Chair, thank you for the extra question.

Of course. Thanks, Paul. Before we go to the room here, let's just actually, does anybody have a question? Go ahead, represent Tam.

Yes.

Oh, so you're only going to ask it right now.

Thank you. I am very new to the group, but I'm very curious about the prospects of cruise ship gaming. For me, that seems like the most, the least harmful, but our office- the opposition towards gaming has been saying that this is slippery slope.

So I kinda am curious as to how states like Alaska is able to not have a lottery, allow native tribes to hold casinos while allowing cruise ship gaming, and how do they regulate it?

I'm not familiar with the Alaska model, maybe someone else on the call is. I'm sorry about that.

Do you have any knowledge on cruise ship gaming and how states have regulated it?

I don't really, I think most and there's probably smarter folks on the call than me that would know on the cruise ship gaming front. I think it's kind of a international waters type of thing. So I don't know if any one state has any kind of exclusive jurisdiction on it unless maybe it's off the coast within a certain radius of mileage off the shore, but I'm kind of spitballing here. So maybe

Thank you, Tres. I think we have some academia in Zoom. Is there anyone willing to take that on?

Yeah. Bo, you or me.

Yeah. Okay. I can speak to this. Yeah, it's the the states do not regulate cruise ship gaming. In fact, the games are off when they are in the ports. It's only when they get out into international waters that they turn the games on. And it's not something that any of the states regulate, and Alaska does not regulate, And despite its very large cruise ship industry, it's something that's done under international law and international waters.

Well, I asked this because many of our cruise ships, even though they sail in an island like the front of America, they don't have it. And even when they're within sailing within like, the coastal regions of outside of our coastal miles, they have it off. From what I've learned, I've said we do regulate it, and Alaska does charge them some kind of fee or taxes to get it. So I would encourage you to kinda look into that for our sake at least, thank you.

Thank you. Alright, Tres. Actually, representative, did you have any other questions? No. Okay.

Any other questions from the room? A question. Go ahead.

So, Tres, do you guys have any state government owned operated casinos that you know of?

State government owned operated casinos? To my knowledge, no. I think casinos and states are either owned and operated by either a commercial entity or a tribal entity.

I think that there are some states where there are other types of gaming, like a distributed gaming system, where the state has a direct interest, but I'm not aware of a of a state actually having a state run casino.

So would that be in the best interest of Hawaii for the issuing license? I guess you kinda would give me a biased answer. Yeah. If I ask that question, but anyway, kind of curious because it's like if we do a native Hawaiian casino or native Indian casino, you know, the ownership and the rules and for the regulations within that kind of encompasses a lot of especially for small state like Hawaii.

So yeah, I think that the state regulation of gambling is of immense importance. It's been the case, for decades and decades, and so that certainly is the way that gaming has been regulated and or legalized for decades now.

You know, the state building and operating a casino, again, I'm not aware of a circumstance where that is the case. And, obviously, most of the companies that do own and operate and build casinos have experience doing this, and so they have robust compliance departments, and they obviously have the, expertise with contractors to build. And they've you know, they have the the expertise and the experience to do that.

And so in some cases that may make, I would think, things more kind of seamless while still working within the the laws and regulations that the state provides. And so I guess, yeah, I guess that's what I would say.

I would too if I was you. Thank you. Alright.

I'll go ahead, and then we'll go to Zoom after.

Tres, as a follow-up to representative Tam's question, we have relationships with the cruise ship government relations people, but I'm sure there's a branch of gaming for cruise ships. Do you know who the contact would be for that so we can try to flush out the question that rep Tam asked?

Bo, Alan, I don't mean to put you guys on. I know that there is some kind of international regulatory body. Is there not? Or maybe I'm just making this up.

Yeah. We can connect you with the International Association of Gaming Regulators, and the same rules apply in both Alaska and Hawaii. International waters extend 12 miles out, and so because the cruise ships don't go outside of that on the intra Hawaii cruises that existed, they don't turn the machines on. In Alaska, they don't turn the machines on. There's no gaming until they get outside of that.

But at the international level, they typically follow best practices set by what's called the International Association of Gaming Regulators, and that's a group that we can happily introduce you to and connect this esteemed body with.

Thank you, Bo. And I, you know, asked that question also thinking about if they are gonna turn it on in Hawaiian waters and the revenue generated, the percentage should come to the state. It's not gonna make sense if they turn it on and it doesn't come to the state. So no.

Yeah.

If Bo, if you guys can connect us with whoever we can talk with so we can flush out those questions.

Thank you.

Thank you.

Alright. Moving on to Zoom. Is there anyone who has a question?

Why it's problematic.

Sure. Go ahead.

Tres, could you just tell us, many of us on the call have been part of these public debates in states around The United States, maybe even in other places.

Can I, if I may, mister chair, may I ask a question? And then I have a comment on one of the prior questions.

And it seems to me that a constant similarity in the debate is a concern about increases in crime, increases in problem gambling, a number of other social context concerns that exist. I'm just wondering I know what I know in the states that I've been involved in, but you have access to the the nation. Has any of that proven true?

Yeah. I think largely it is true. I mean obviously, on the problem gambling side of things, I think that there is a bit of a potential misnomer in that. I think some folks think that, you know, responsible gaming is something that the legal industry just says the word because it's fashionable or something like that.

And, you know I would contend that if responsible gaming is a core proponent of the legal gaming industry because without it, there isn't a sustainable marketplace.

And so for there to be a sustainable marketplace, making sure that responsible gaming tour tools are available to consumers and the necessary help.

And Alan, you're the expert on this, but the necessary help for folks that have that have problem gambling issues, that information is readily accessible, that technology, if it's an online betting platform, technology is very useful in in identifying concerning trends as far as betting patterns or irregular amounts of money that are being deposited or wagered if you go for betting, you know, $20 a game to to $5,000 a game, you know, that that's gonna get flagged.

And so, those things are certainly all out there. And then, obviously, you know, on the time aspect we've seen a number of situations where, you know, money has been embezzled and it has been used for various purposes. And then, you know, on the so called skill game machine debate, that attracts physical crime, right where you have these basically, slot machines and bars and gas stations that, attract robberies.

People are literally robbing machines in broad daylight, pulling them out of the gas station and smashing them open, getting the money, and leaving them on the side of the road.

But in the meantime, that leaves people very vulnerable. And there has even been federal prosecutions in those types of establishments where they're, I believe the US attorney in Pittsburgh prosecuted a ring of robberies that was based out of the Bronx, but the robberies occurred at various locations in Pennsylvania and Virginia where the skill game machines were located because they knew that there was gonna be a large amount of cash there.

And so, you know, illegal gambling always, always, always, always attracts and is part of a broader nexus of crime. And we have seen that going back to the days of the, you know, mafia in the 50s with illegal bookmaking or whatever the case may be.

Illegal gambling has always been part of a broader nexus of crime, and that certainly has not changed today. And I will also say illegal gambling is the greatest tool any transnational organized crime group or any money laundering operation could ever ask for. Illegal offshore sites are the greatest tool that they could ever have to wash their money.

And so that has also been, you know, one of the hooks that we have tried to use to get the Federal Government involved, which is, this isn't just about illegal gambling, but if you dig a little bit deeper, you're gonna find a whole host of other crimes that are attached to all of this and indeed could even be connected to various types of governments.

You know, there have been cyber hackers out of North Korea that have hacked offshore gambling companies and stolen millions of millions of dollars worth of crypto to fund their nuclear program. And so this is a very, very broad issue that raises a lot of talent.

Alan, did you have a statement?

I did, I wanted to just follow-up on the the very important question about, what is done to identify or to support people who are experiencing gambling harm. And the question the way it was framed, very appropriately so, related to what happens in the walls of the gaming facility.

And you've heard that answer. I don't need to go over that again. I just wanna say that I do think that our committee needs to be focused outside the walls as well. Because it's one thing to say that someone has either come forward and said they have a problem with gambling.

They're being harmed by their gambling. It's another if the casino itself does the same, but one way or the other, they have to be referred someplace. And while Hawaii has an outstanding mental health network, we've gotta make it prepared to deal with people who are struggling with gambling harm. It is an addiction, it's very similar to other addictions, but it also has its own unique characteristics.

So, one of the things we're going to have to give some consideration to in whatever law may be proposed in the future is what support is being given to the mental health community to be trained, to be prepared, and to be ready to support people. The good news here is that gambling treatment is unbelievably effective.

So, it isn't, you know, we don't need to reinvent the wheel start from ground zero, but we just need to be certain that there actually is a framework of support available for people who need

it. Thank you for your statement. Alright. Moving on to the room. Is there any other questions? Go ahead.

Just on the cruise ship question, I think one thing to familiarize yourself with is the Gambling Ship Act. Right? There are federal laws that regulate what US citizens can do in terms of using ships as gaming facilities. So that's something to be mindful of for not just this group, the working group, but also if this ever comes back before the legislature.

But also if anyone on the the call can speak to this, I think there is enough to be a cost benefit analysis no matter what. Right? Like, do you guys have to make the decision about whether or not this is worth it? So I think the question is, as far as brick and mortar shops, so cruise ships versus casinos, what scale of tax revenue could we expect to be generated on a cruise ship versus a casino? Because I think it's limited by floor size. Right?

And once you get past a certain floor size, then it's limited by the number of ships you have operating in your state in your state waters. Right? Assuming the gambling's happening in state waters. So I think part of that cost benefit analysis is how much reasonably can you generate on a ship versus on a casino floor in a gaming resort? Yeah.

Cool. Eric, I could share a couple anecdotal examples. That's helpful.

Tres, I'm assuming you don't have a comment.

Oh, Paul I think Paul was gonna make some

I don't know as far as the cruise ship, revenue.

Okay. I just wanted to make sure

okay. Go ahead.

Yeah.

Sounds good, Tress. We'll have Paul speak. Go ahead, Paul.

Yeah. This is definitely crazy, so not mine. I just thought I'd, so in Louisiana, Mississippi, all through Illinois, as you as everyone probably is well aware, you know, they started with riverboat gaming, which is very similar to the cruise ship side of things. Right?

The cruise ship, National Waters abides by effectively the laws that it's flagged under, whatever country that may be. When it comes into, for example, port in Hawaii, your laws apply. And so if you did cruise ship gaming, you could you could regulate that and tax it accordingly. What has happened in all those other states that started with riverboat gaming, they recognized just exactly to the the point of the question, the square footage, the size, the capacity, your ability to add other amenities.

In many of our resorts, we have multiple restaurants, you know, bars and grills. Some places we have, like, in Nevada where we have, bowling alleys and movie theaters and and all of the above. When you get into the resort now game, they recognize that their tax revenue increased exponentially. And so each of these states have now decided that they're gonna allow you to come on land instead of be on the on the river boats.

Many of these river boats sat at the barge for thirty plus years, still having to have a captain at the helm, but it never floated anywhere. And so their limitations would be very similar, I believe, in the cruise ship side of things where access to the games, sport footage of the games would limit the ability to generate tax revenue. The other states have seen that and have now allowed us to all come on on land.

Go ahead. Okay, thank you, Paul. Alright. Is there any other questions?

Chair, can I just Okay? I'll ask another question.

Sure.

Thank you, chair. And I'll stay on the same page, but I'll turn it a few. I'm curious to know whether we, regardless on the boat or any type of gambling, if established, are you aware of any agreement or measure that allows a ratio of ownership and local employees. Say if you have 100 employees that 70% has to be local.

And I only say that because, you know, the taxpayer or the recipient or the constituent to the first opportunity at those jobs. I've been traveling to Las Vegas for many years, and I used to read all the name tags and have a lot of conversations of people that are employed from around the world, and I never saw a Nevada name tag. You know, so that raised my eyebrows.

I was just wondering, is there a measure that you know of or an agreement that a certain percent of locals have to be employed?

That Paul, that may be a better question for you as a casino operator. I don't know about an actual local citizen measure type of thing, but there are many casino properties in many, many, many, many, many states which are unionized and use unions. And so where those union workers are located, you know, it may be different, but I get that kind of gets a little bit more to your question. But Paul, do you

Gregor, I might

Go ahead, Paul.

Carl, thanks for the question, and you're right. In different jurisdictions, they approach it differently. Oftentimes, community benefits agreement that does require both from the construction side and the direct employment side. There's certain parts of the puzzle that, also focus on workforce development.

So you have a pipeline for employment as well. I've been a part of those both from the gaming side of things as well as when we did Allegiant Stadium and the A Stadium. Those both had community benefits agreements that required local hires. We did that for Tesla when we did Northern Nevada and the back up near Reno. We required that that up 60% had to be local.

And then there's, you know, how you define local is, you know, important component of that. But, yeah, there are ways to do that to make sure the locals get first dibs on those jobs.

As it should be, by the way.

Thank you.

Thank you.

Can I follow-up?

Yeah. Go ahead.

So, Paul, I just wanted to follow-up. I was just on the impression that none of them had the name tags because that they were all working in the higher positions.

The name tags usually say where they're from, not necessarily you know, so a lot of folks move to Vegas. There you go. That's awesome.

Honestly, on a serious note, I do have a question. You know, so how can you know, Hawaii is a tourism state. I mean, it's mostly driven on trend. So how can Hawaii leverage its technology and innovations via the gaming world to attract visitors?

Tres?

Yeah. I mean, I think that if Hawaii is such a desirable location anyway, as we've talked about from kind of both the East and the West, you know, both from Azure to Australia and then obviously from the Continental US, that if a decision is made to allow for casino properties, make sure that the, you know, that the the licensing and regulatory process is a sound one.

You know, you're gonna have some really great casino operators that are going to want to build in Hawaii, and we'll build world class properties on the island, that are going to be particularly attractive.

Paul mentioned something earlier that I think is particularly important is that the percentage of revenue from the gaming part of a casino property is lower now than it's ever been, which is to say that back in, let's say, the 60s the revenue generated by a casino from gambling was, you know I don't know. I'm just making up numbers here, but let's say 75 or 80%.

Now it's under 50% because these properties, as Paul mentioned earlier, when they, especially when they were able to move onshore, they have expanded their entertainment options so much. And so a lot of times when people go to Vegas, they can go to these or any property.

But they go to Vegas and they don't spend a penny on gambling, but they wanna go for the shows, they wanna go for the food, they wanna go for, you know, the swimming and the spas and all of these other concerts, whatever the case may be, all of these other entertainment types of of experiences that these properties now provide. And so I think that, you know, technology will certainly be utilized.

The beauty of the Hawaiian Islands will be utilized, and I think that you will see some of the world class properties that will attract a lot of eyeballs, and will certainly be attractive to folks on on both sides of the globe.

So Tres, just a follow-up.

Yeah. Go ahead. Follow-up.

So when you look at that, you know, a lot of the questions that have fired back on regards to gaming and so forth has been, you know, addiction and drugs, alcohol abuse, domestic violence. How do you separate out when you know, and I go back to using technology as visitors via gaming.

How do you separate out the abusive gambler that is addicted from the clientele not to leave anybody out, but to attract the clientele that can afford to spend their money in the gambling world and retain the environment and the beauty of Hawaii and why Hawaii is the way it is with its culture, the lost spirit, and so forth.

Sure, and Paul, again, may be able to talk more specifically as to the actual you know, some of the more granular protocols. But, I mean like, you know, these properties we talked about employee training earlier as far as being able to, you know, put eyeballs on people that you're seeing. Technology is utilized certainly through surveillance. Beau mentioned, you know, on the slot machines with the button.

Those are all areas, and also any casino properties that start utilizing things such as cashless wagering or where you have a player rewards card, all of that information is circulated within the casino and can help identify folks that, again, whose betting patterns are being used erratically. And I know it's kind of a scary topic these days but, you know, artificial intelligence is going to help identify if it's used properly you know, help identify this even better.

And so I think that those types of problems, we're getting better and better at identifying, both through physical, other humans who can identify things, as well as through the use of technology, whether it's surveillance. Whether it's payment systems, etcetera, you know, to identify these people that genuinely do need help.

And then, I think we kinda talked about this earlier, but, you know, creating, I keep using the word pipeline, but creating a system which virtually every casino property has, but in but access to information and resources and problem gambling, clinics or advisors, etcetera, all of those things are provided to folks who genuinely need it.

And so there is available technology to be able to, you know, try to limit those types of folks and make sure that they get the help they need in order to not, you know, put I suppose compromise the, you know, the beauty of the property and certainly the state of Hawaii.

So I just got a quick follow-up because this question has been pressing on me. So I know that you guys have the technology. I see you guys, not because I go to gamble, but I like to go and eat, and I take advantage of all the discounts, but so you have this technology. You put your card in, right? And it just like, okay. The Skype just to blow 10 grand.

And while that targeted individual or anybody that registers with a card, a player's card, I find this, one is I don't see anybody send me out one card that says if you got an addiction problem. I see him in the bathroom when I close the stall.

So it's just a good thing you know spend time in the bathroom, but what I see a lot of is I see a lot of promos that come on, which is good, but I just want to ask this question because when we talk about addiction and we talk about, the chronic gambler and how do we help them. I noticed when my dad goes, they send him everything like, he's 80, 80 something years old, Macy's $250 gift certificate, which he never uses.

Right? A man not good shopping, so hopefully they got girlfriend or wife, but all that technology that you have there, do you guys, my response is I feel like it's fixed to get him to keep coming. Right? And and he loves it.

I'm a kid can do whatever he wants. But but for the other individuals, how do you help them with the data you've collected knowing that that pattern of okay. Just ensure $500 in. Okay. Boom. Boom. Cash out. Whatever. Drop another 5. I know you guys have that data.

How do you help them via the promos that you guys send out? Because believe me, I will look at every discount you get and go, dad, I got this. See you later. I'm gonna take care of all your discounts and so forth because happy wife happy life. Right?

So but how do you help them knowing that it's always been called out to us here at the legislature, addiction, the family that lost everything, the father that gambled his house away? Where's that part?

Senator, I could maybe add a little to that.

If you can. You kinda know what I'm saying. Yeah.

Yeah. I think so, there's a couple ways maybe to answer that is, one, company culture matters in that and I can speak to Boyd specifically is that we have a 50 year relationship with the folks from the island. And that means something to us, and so that means that we need to have a happy, healthy customer that has disposable income that wants to keep coming back to see us.

Right? So if you're a one trip wonder, that's not a great customer for us. So that culturally, it matters. So it does mean that, and look at where our Boyd properties are. Generally, they're in neighborhood.

Right? They're not the places you always travel to, but they are places that we see our customers sometimes three or four times a week versus, say a strip customer where somebody might go once or twice every few years. And so we build relationships with our customers, and I think that's an important piece of it, that our bartenders, our waitresses, the folks on the floor, they know their customers. And so they know when something's off, and so they can they can have those conversations.

That's a bit anecdotal. I probably don't have data to sort of you know, drive that home, but it is entertainment, and it needs to be managed as such. And when it becomes beyond entertainment and turned into an addiction, that's a problem. You're right.

When you put your rewards card in, you're gonna get more promos and more opportunities to come back and play with us. That's an important piece of it. But there are ways that, and we do sometimes flag accounts that say, this activity is abnormal for this player, and we will have a VIP host check themselves and have a conversation to make sure that everything's okay. And you'll see that, right?

If you average X amount of dollars every time you come into play and all of a sudden you're way up into Y and Z dollars, something's changed there and we will have a conversation.

The other piece of that is we wanna make sure we understand the source of your revenue or your income. Because if you're playing outside of the scope, that is and then Tres spoke to it, whether it's I'm spending outside of my normal limit, so that might be a budget issue. Or maybe you're getting income from someone else, and you're laundering that money or doing something illegally. So there are multiple reasons why we wanna inject ourselves into that activity.

But there are ways both from the tech side as well as the human side. And, again, just knowing your customers that you can inject yourselves into those situations.

Well, thank you, Paul, and thank you Cochair, so questions has been great, and if you have further questions, please share them with me at this time.

Tres, on behalf of the working group, thank you for your presentation and answering our questions, we're gonna move on to the next item. We're gonna table the next item on the stadium, and we will have those discussions at another time. Before we close, I want to have, director Tokioka from DBED explain, to us the process of the report and anything that you would like to share regarding our working group.

Thank you, sir. So for all of the members online and in the room, two of the gentlemen sitting in the back, you wanna raise your hands, is Oscar Valencia and Joe Roos. They work in our Read office, their economists for Read. And so they've been here in every meeting following the meetings, putting together the report.

I saw a rough draft of the report two days ago, but what we're gonna do in the next meeting is approved by Senator DeCoite, to have them put up the draft to the members so that the members, we're gonna be at the halfway point at the next meeting, so the members can at least see what the report will say, and you will have input as to what you think should be what else do you think should be in there?

What do you think maybe shouldn't be in there? But we wanted to make sure that is as transparent as possible so that you all know as members what this report is gonna say, because it's basically a compilation of everything that we talked about and everything that has come into the chairs and to deep end. So this will be that opportunity to input your thoughts into the report that will be sent to the legislature twenty days prior to the opening day of session.

So I wanted to make sure that you all knew that. So be prepared at the next meeting for things that you wanna see inserted into the report, and I take that back. They'll give you the draft, and you can read it. And then after that, you can decide what you think should be added or deleted. Okay?

Alright. Thank you, director.

Thank you. And I I have to apologize. I have to be some place I want to be.

Alright.

Bu I appreciate, this was great dialogue. And thank you all of you on the the Zoom call for the great dialogue to the members.

Since director can't join us anymore, we'll conclude this meeting. This meeting is adjured.

Yeah.