Tourism and Gaming Working Group

Aloha, and welcome to Tourism and Gaming Working Group. Today is Thursday, March 21, 2026, and this is our 1pm agenda, and we are in Conference Room 229. This informational briefing is being streamed live on YouTube. Please note that there is no testimony that will be accepted at this time. So let's start off with introducing the committee from left to right. Tyler, go ahead. Introduce yourself.

Tyler Gomes, Council for Native Hawaiian Advancement.

Hi. Kent Caputo, Marnell Companies, Marnell Gaming.

Aloha. Brandon Maka'awa'awa, Nation of Hawaii.

Good afternoon. Michelle Puu, Deputy Attorney General from the Attorney General's Office.

Hi. I'm Senator DeCoite.

Dane Wicker, Deputy Director of Department of Business, Economic Development, and Tourism.

Art Tolentino, unions.

Paul Anderson with Boyd Gaming.

Can we go online? Anybody on Zoom land?

Darrin Sato, social work, mental health.

Good afternoon. Gary Suganuma from the Department of Taxation.

Hi. Jennifer Chun from DBEDT.

Hi. This is Bo Bernhard from the University of Nevada, Las Vegas.

Do we have anybody else on line? Is the Co-Chair online? Is Representative Ilagan...

Hello, Chair. This is JB, Office Manager for Rep Ilagan. He won't be attending this, and I'll just be attending on his behalf.

Thank you. Okay. I guess we can get started. Thank you guys all for being here. Seem like we never shut this place down at all. Thank you. Don, thank you for being here on behalf of directors, well as you, Dane. So let's jump in.

Let's go to the first presentation is designing a policy system that works for our state, a local a local researcher and perspective. Joining us is Dr. Ray Cho. He was born and raised in Honolulu and is a graduate of Kalani High School. While he's currently based in New Jersey, he maintains close ties to Hawaii through family and regular visits.

And he's participating in this process as someone personally connected to the community and its long term well-being. He serves as a project coordinator at the Rutgers Center for Gambling Studies, where his work focuses on analyzing large scale gambling data and contributing to annual reports to regulators. Those reports examine statewide gambling activity, player behavior, and responsible gaming trends to inform policy and oversight.

His research focuses on how policy designs, shapes measurable behavioral outcomes, particularly through the interaction of incentives, governance, and market structure. He has published and presented research on gambling behavior and tourism department and has taught courses at the University of Nevada of University of Nevada, Las Vegas.

Dr. Cho earned his PhD from UNLV and brings a background spanning hotel operations, management, research, and analytics. His work reflects a practical data driven approach to policy and its long term community impacts. While you're coming up, I just wanna introduce... Go ahead and introduce yourself. I'm gonna introduce you.

Hi. Stanford Carr with Aloha Halawa District Partners. Thank you.

Thanks, Stanford.

Sorry. I'm late.

Did I miss anybody else? Oh.

Steven Bond-Smith from University of Hawaii, Mānoa, research and innovation.

Thank you for being here. Dr. Cho, if you'd like to get started.

Okay. Thank you, Chair. Aloha. Thank you again to the Chair and members of the working group. I appreciate the opportunity to present today. Can everyone hear me okay? Just wanna make sure. Okay. I'm here to talk about what it would take to design a policy system that works for our state.

Because if Hawaii wants to get this right, that's the question I'm focused on today. Okay. So to start, I wanna point out something upfront, which is that Hawaii may actually have some unusual leverage here. Because when it comes to gambling, Hawaii is often seen as being behind the rest of the country.

But maybe in some ways, everyone else was just too fast. So my goal is to help clarify how Hawaii could approach this issue in ways many other states never got a chance to. In that, in that way, Hawaii can think more carefully before major policy decisions take shape.

So if we want to get this right, here's what you're probably gonna wanna know. What other jurisdictions learned the hard way, what Hawaii still controls, what thoughtful policy requires from the start, what protections are needed, and what Hawaii could do differently.

Because one of the clearest lessons from the Mainland is that rapid expansion often forced states to figure things out after the fact. And it's not that easy to put the genie back in the bottle. Since 2018, following a landmark Supreme Court ruling, legal sports betting spread rapidly across much of the country and is now legal in 39 states.

Online and mobile platforms accelerated convenience and access almost immediately. Sports, media, and gambling became increasingly integrated into mainstream culture to the point where gambling ads are virtually unavoidable.

And importantly, many assumed legalization alone meant that default protections would be enough. So it's important to remember, legalization and thoughtful design are not always the same thing. For example, in Tennessee, they later realized some of its original assumptions around operator performance did not work smoothly in practice.

Ohio and Massachusetts had to respond to advertising and consumer protection issues around terms like free and risk free bets. And broader expansion also created newer concerns, including forms of athlete harassment many had not fully anticipated.

Now that we know some of the lessons learned on the Mainland, here's where I think the conversation should start among locals. Because before we start jumping into specific proposals, there are bigger questions Hawaii should probably get clear on first. And honestly, the next couple slides are probably the most important when it comes to conversations with your constituents.

First, let's talk about purpose. What is the state actually trying to accomplish? Because different priorities create very different systems. Tourism development may lead somewhere very different than minimizing harm.

Illegal market displacement may create different incentives than youth safeguards or public health. And if resident welfare becomes the primary focus, that may lead somewhere else entirely. Also, online systems create very different exposure than brick and mortar systems.

So we'll need to think about accessibility, normalization, and community impact across all these different possibilities. Because setting clear priorities early on shapes everything that follows. And if we keep the goals vague, policy still defaults somewhere anyway, and that's typically just revenue.

So before Hawaii jumps too quickly into individual proposals, it should probably spend some time talking honestly about what success actually means. And it can't just be revenue and jobs. It has to be more specific. After we talk about purpose, we'll need to establish a foundation around local capability and trust. What can we realistically support well?

What are the gaps? And what will we need to become more self sufficient? Because frankly, when Hawaii puts too much trust in outside systems or outside priorities, things don't always work out the way locals hoped they would.

We have to make sure we're aligned on public legitimacy, credibility across Hawaii's diverse communities, Native Hawaiian inclusion, and independent governance voices, particularly around key decisions. Consumer protection also cannot be an afterthought.

We're going to need protections around responsible gambling access, opt out versus opt in defaults, self exclusion, early intervention, keiki and kupuna protections, and limits around bets, marketing, and payment systems. Support infrastructure will matter too.

What are we doing about early education, specialized providers and training, financial and credit counseling? I wanna highlight that because especially given the high cost of living here, that's a really sensitive issue, as well as military and veteran support. Finally, oversight matters.

Let's make sure there's baseline prevalence studies, data transparency, independent review, local research, and risk tiered protections. And when I say data transparency, I don't mean exposing proprietary operator information publicly.

I mean making sure that we have enough visibility to effectively respond to what's actually happening. We need to be able to ask what's going on, who's being affected, and are the protections working? And are certain communities carrying more downside than others?

And I specifically want to mention Native Hawaiians here because the less they are meaningfully in included in this process, the more likely the risks will be concentrated there in the future. As you've heard by now, gambling has been quite the economic driver. And don't get me wrong, I like revenue and jobs too. But there's another side to rapid expansion. As revenue grew, so too did public concern.

And if you think Hawaii is the only ones, only state wrestling with these questions, you'd be you'd probably be mistaken. Conversations around gambling, consumer protection, advertising, youth exposure, and broader social impact are happening across the country.

According to Pew, public concern around sports betting has increased significantly in just the last few years, especially among younger adults, which suggests that broader expansion is shaping entire generations in in ways we still do not fully understand.

Researchers are also finding that betting activity becomes heavily concentrated among a relatively small segment of users. In New Jersey for example, 4% of bettors account for 40% of bets and 57% of spending.

Also, newer systems are making this conversation even more complicated. Prediction markets, for example, which you've probably heard of, are now legal across the US, including Hawaii, and are legally available to users 18 and over.

And honestly, when people say gambling is, quote, unquote, already here, they often mention illegal gambling rooms, which is kinda easy to ignore depending on who you're talking to. What I'm trying to say is that we are already part of a much larger gambling environment, whether we formally acknowledge it or not.

That's harder to ignore in some than some backroom or neighborhood poker game. As I've mentioned, I believe Hawaii still has an opportunity to act deliberately here because what happens on the Mainland shapes local life more than we realize.

As time passes, it may gradually become harder for Hawaii to define its own boundaries instead of reacting to everyone else's. But in the meantime, Hawaii still controls important choices, what boundaries it sets, what protections it wants to put in place, and how the support systems should function.

So if we can talk honestly about what it would take to get this right, then we also need to stop treating this issue as something Hawaii just scoffs at whenever gambling suddenly shows up on a bill. Because honestly, we cannot keep saying we care about younger generations while also pretending that broader systems don't affect the environment they're growing up inside of.

And if the automatic response is still to shut down the conversation the moment gambling gets mentioned, then are we actually protecting future generations?

Or are we just avoiding an uncomfortable conversation? If Hawaii truly cares about future generations, then the first thing it should do is baseline prevalence research before anything else, whether legalization ever happens or not. Right now, we don't know how vulnerable or prepared Hawaii actually is when it comes to gambling harms. Even outside of gambling, Hawaii already faces behavioral health and access and workforce challenges, especially in rural and neighbor island communities.

We need stronger consumer protections early, especially around youth exposure, normalization, and advertising. And for what it's worth, Hawaii already has a history of making intentional policy choices in this regard. A lot of locals barely notice Hawaii's billboards restrictions until someone points out how few we have. It's been that way for a very, very long time. And there are many places on the Mainland where communities only later realized they would have chosen differently if they had more saved before advertising became deeply embedded into their everyday life.

I want to point out a study here because there was a 2025 study that found that legalization alone was not the strongest predictor predictor of people searching about problem gambling online. Sustained advertising exposure appear to be much matter much more than legalization. We have done this before, and we can do it again. Okay. So I recognize sorry.

Can you tell I care about this stuff?

I'm so passionate.

Yes. So I recognize that at some point we do have to talk about actual models. And honestly, this slide could probably be an entire presentation by itself. Because there is no perfect system. There's always gonna be trade offs.

So I wanna frame this lesson as here's the answer and more as here are some reference points that may help us think more clearly about Hawaii specific concerns. For example, Singapore and Japan are interesting because their integrated resort models or IR emerged through very different political and cultural conversations than the rapid sports betting expansion we saw across much of The US. Singapore legalized around 2005 and opened around 2010. Japan legalized in 2018, and they still may not fully open its first major resort until 2030. K?

So those timelines matter because what you're seeing there is not just slower rollout. You're seeing political discomfort, public hesitation, scrutiny, local resistance. Honestly, Japan kind of feels relatable there because the conversation there was not simply how do we maximize revenue. There's a much deeper struggle around identity, public trust, and whether society even wanted gambling integrated more deeply into their everyday life.

Japan is also complicated because all although most forms of gambling remain heavily restricted there, pachinko has existed throughout Japanese society for a long time, which reinforces an important point.

Legal status alone often tells you very little about lived reality. Does this sound familiar? We also have Norway on here where the focus is much more explicitly around harm reduction and public health governance. I included it because the philosophy there is much more centered around community and well-being. The trade off is that the system becomes more restrictive, more heavily supervised, and less focused on expansion and revenue growth.

And then, of course, we have tribal and sovereignty based models. And I actually think these models may resonate very strongly in Hawaii because native Hawaiians have heard promises before. What may feel different about some tribal models is that people can clearly see how and where the benefits are flowing. Housing being built, health care being funded, education programs directly supporting indigenous communities.

The structures may be more legally complex, but there is also something powerful about systems that visibly reinvest into communities that have spent generations feeling underserved, displaced, or left behind.

These are different systems that reflect different priorities. So after all of that, here's the summary slide, and I really just put this here more as a practical checklist for the working group, not because we have to go over everything all over again. But because if Hawaii wants to approach this thoughtfully, here are some here are some of the areas that you wanna look at earlier before than later. So to close this out, I just wanna add one more local perspective.

You've heard me make this point about the importance of baseline prevalence research, but even without exact numbers, here's another way I think locals need to start thinking about gambling already being here.

Think about a potluck. K? Across enough families, friend groups, and communities, we got grandparents, aunties, uncles, cousins, CALABASH cousins. It's hard to imagine many of us do not already know someone who has been affected by gambling. For some, that may mean harm.

For others, no gambling at all. For many, it's re recreation. But whatever way it is, it's all part of our lived reality. Our reality is special. I really feel that because for us locals, we grew up around very different influences than much of the Mainland.

Hawaii is a place shaped by both east and West, by cultures that in many cases already understood gambling long before this current wave of mainland expansion. And I actually think that matters because that exposure does not automatically make Hawaii more vulnerable. In some ways, it may also make Hawaii more aware, more realistic, and more resilient around these conversations. Individual freedom and responsibility do matter here, but so does collective well-being.

And I think that gives Hawaii a perspective that is different from much of the Mainland, but also different from places like Japan.

And honestly, living on the Mainland has made me appreciate Hawaii's sense of community even more. Because many places do not really think this way anymore, but Hawaii still does, which is part of why I believe Hawaii may actually have a real advantage here, because Hawaii has always carried influence far beyond its size. And that may give Hawaii an opportunity, not just to react to these conversations, but to actually help shape them.

And hopefully in some small way, what I shared today has been helpful in contributing to a more thoughtful conversation. Mahalo for your time, and I look forward to any questions and comments you may have.

Thank you, Doctor. Cho. What an awesome presentation. You got me thinking twice now. So let's start, with questions from the committee.

And I can start from left to right again, Tyler, if you wanna go ahead and get a question.

Thank you, Doctor. Cho. Can you, in your research, can you speak to how potential risks and harms are mitigated and what the research shows about that?

Sure. Thank you for your question. So I keep stressing this point about baseline prevalence research, right? So right now we don't even know, like, I can't even take the temperature of what's going on.

So you

got to get that first because then you can say, okay. Where are people gambling? Where is it concentrated? And then from there, you can say, okay. Because it's a multi system effort here.

So on one sense, we have RG, which is like responsible gambling. It's like, okay. We gotta make sure there's interventions in place so people can set limits, or, you know, they can sign up for self exclusion. But also, are there enough treatment providers there? You know?

Are they trained in gambling specific addictions? And can they get referred to the right expert

if

they need it? You know? A lot of states, even with that in mind, they still didn't get specific enough, and then it was hard for people to find the right kind of help. But these things can matter. And there is definitely studies that show that, you know, when people engage in responsible gambling or they know that resources are there, that provides a protective layer for those communities.

We can't get through to everyone, but we can try to minimize the harm there. And and that's going to happen in, like, in, like I said, like a multifaceted effort through responsible gambling, social programs, support infrastructure, early education. And, I think what what what I like about your question specifically to Hawaii is that Hawaii's everything's so concentrated here because of how small and remote we are. So things can get bad really quickly, but they could also get really good really quickly.

So if we work together, I think, you know, we could we could set a really good example of, as a collective community.

Thanks, Jared.

That's it. Thank you.

Ken, do you have any questions for us?

Quick question. Do I have this on or

Come on.

Yep.

There we go. First, thank you. I will tell you, I've had meetings with various of, you know, my colleagues at this table and others. And my shorthand has been, if you're gonna do it, do it right. But I have to compliment this thoughtful and robust, much better way of making that point.

Thank you.

I'd like to ask about your your comments about, tribal gaming, and, you know, what I'll use my shorthand, hopefully, correctly of that cultural foundation. I I I wonder what your thoughts are, whether you're talking about operation, whether you're talking about regulation, whether you're talking about problem gaming treatment, and everything that full you know, what what a lot of folks in the industry in Indian country will call, you know, the medicine wheel approach, the whole person, the whole community.

How critical do you believe that is both to get it right over here as well as acquiring the social license to even ask the question? I'm wondering your thoughts on that.

Yeah. I I love how you frame that question. I really appreciate it. And I think you'll you'll hear me make this point over and over again. But, you know, to that slide, you know, where I point out, like, what, what are we doing this for?

Who is this benefiting? That question has to get asked among constituents. Because if Aye, if you can't tell me what we're doing this for specifically, then I might give you a different answer, like, of how tribal should be involved if we're doing this for public health or are we doing this for tourism? Because if we're trying to build a big integrated resort, I don't know, like, you know, and like, you know, like something that's really big and sort of sexy, you know, I'm not sure.

That's going to look a lot different than if you build something kind of more community oriented.

And then, yeah, what's who's the clientele? These are the types of questions I'm going to want to know before I make specific recommendations on, like, the tribal integration. I think that what I can say right now is, I think, because Hawaii and, native Hawaiians and, tribal, Native Americans, there's overlap there, but they're not completely overlapping circles. Right. So you might have to also do kind of an assessment of like, okay, well, like, how do we get the best of both worlds here?

And then use that template and mash it up against the goals. And then I think you can start to get this answer, but you're absolutely right about this holistic circle. This has to be a multi, a multi system effort here. I apologize. I wish I could get more specific for you.

And I'd love to, you know, like I said, we could we could spend a lot just talking about models. But as a as a preliminary answer, I would just offer you that. Yeah.

Brandon. Thank you, John.

Hey. Mahalo, doctor. I appreciate the passion and, you know, and just kinda really thinking this through. I think, you know, I enjoyed your presentation.

Thank you.

Mahalo. You know, we've had a lot of people come in before you. We've talked about different models, but none of them have had the deep knowledge of Hawaii. As someone who has significant roots here and understands how important culture is to this community, if you were to suggest how best to establish gaming in this jurisdiction, what are the key components? Or is there an ideal model you feel should be considered?

Thank you for that question. Aye, let me first say that, you know, I definitely can't I don't have an encyclopedias knowledge of every single model. And as you guys have seen in the previous, it can get kind of, you know, there's so many models out there. Right? But that's it.

I did intentionally select the ones I put here. I felt that the IR discussion, particularly as it relates to Japan, I felt an affinity there in terms of the struggles that they're the challenges that they're facing. And then the Norway models, I I really like that collectivism that they have there. I I I think that's you know, these are international models.

So, you know, you got to take that with a grain of salt in terms of how much you can you can kind of translate that over here.

But I do come back to the the tribal models. And I've been studying this, you know, gambling for, you know, I want to say like going on like fifteen years, maybe a little bit longer. And the tribal one always stuck out to me, because of the native Hawaiian, factor out here. I just feel like, and in some cases, the outcomes of some of these tribal models can be absolutely salvational.

And I think when I look at the experience of the native wines out here, like I want to believe that there's a solution there.

Now there's a lot of variation there, tons of diversity, even among tribal models. But I think like, if I were sort of planning out how to research this stuff, like I would definitely allocate, you know, specific resources to understanding what we want out of those tribal models. But yeah, and, and also, like, it's not going to be a copy paste Hawaii. There's, you've heard it in other mini, there's just no good comparison of Hawaii.

Yeah, what we're gonna end up is what we live through, which is a mixed plate, it's gonna be a little bit of Korean food, a little bit of Japanese food, you know what I mean?

Like that? There's just, I'm telling you, if this happens, it's gonna become how do we do the Hawaii model? Not what model did Hawaii copy? Does that make sense? Yeah.

Sure.

Keep going.

You know, as a nation, we we continue to study models, you know, like Singapore, like UAE, like Japan, as well as the tribal led efforts. As you have studied gaming and focused on protecting individuals, how should we best approach this if we do decide to go down this path of gaming as Hawaiians?

Yeah. Actually, that, I wanted to say this point, like, you know, going back to those two slides, am I allowed to kind of move back here? Okay. So, like, show this list to your constituents and say, what do you want? Okay.

Do you want tourism? Are we about trying to protect the consumers use safeguards, public resident welfare? Is it housing? You know, is it is it is the HHL involved? Is OHA involved?

Like, like, what do we want? We have to know that there's no perfect system. We can't have everything, but what comes first? That's going to be a much more productive conversation than should we legalize or not? If you just go with, should we legalize it or not?

I'm sorry, I've seen it before. It's a nonstarter revolving door issue. It's a third rail out here. But if you say like, if we did this, what do we want to, what do we want to get out of this? And then once you get these priorities down, then you're like, okay, well, how do we pull that off?

Then you look at this slide and then you say, okay, if we do it this way and we prioritize this way, we got to make sure these systems are in place. How much of this stuff do we already have? Where are the gaps? What do we need to what kind of experts do we need to bring along? And then I think that should be it sounds like a more productive conversation than should we legalize or not?

Does that make sense?

Okay. Appreciate it, Doctor. Mitchell.

Thank you. Michelle, you have a you have a question?

I do, actually. Go ahead. In Hawaii, we already have existing shortages in law enforcement personnel as well as treatment personnel in the area of addiction and substance abuse. So clearly, this is gonna compound those issues. I'm just wondering how is it that this is going to address any of those already existing shortages?

Absolutely. That's a great question. The what it comes down to for me is sequencing here. The legalization question is the most sensitive question in the state. But there are things that you can do just to start collecting data to say, hey, like I said, I can't even take the temperature of, like, who's got problems.

So I can't

relate to the gambling harms, I would say that like, I don't, we don't do prevalent studies on gambling. For as as as ubiquitous as it is out here. We don't really survey that. If you want to talk about, like, adding some gambling panel questions into existing prevalence data, like, I'm all for that. And then I think with with that initial data, that ability to screen, then we can start making more informed decisions.

And then maybe we can start talking about legalization. Can gambling be part of the solution? I I totally understand. Like I said, I I I could see so many different scenarios here. I could see this going really bad really quickly.

Okay? But I also see where it could actually help and support other programs. I'm not saying I'm just saying that there's a range of possibilities here. I'm not assigning probabilities to one or the other here. But I I can't answer what's good what's likely to happen until we start understanding, like, how much gambling is a problem.

I wouldn't want to introduce that and just say, just because it worked over there means it's gonna gonna work over here. I'm completely on the same page there.

May I ask a follow-up?

Sure.

The model you raised in relation to Singapore and Japan, I mean, you're talking about very different societies in Hawaii, two very law abiding societies, very society respecting societies, very different from here. Not to say that we don't all respect each other in Hawaii. I mean, generally, we do. But comparing the two is apples and oranges.

Comparing Singapore and Japan

or Singapore?

I'm talking about Hawaii and Singapore.

Yeah.

Yeah. Singapore, you chew gum. There's severe consequences for that. Absolutely.

very different

Yeah. That's

from here. Yeah.

So I think to compare the legality and the illegality between the two is probably a bad comparison. I get the idea of the casinos and all that, the model. I'm concerned about for law enforcement and the safety community aspect of it.

Absolutely. Yeah. Let me, try to clarify why I picked those models because I think Singapore gets pointed a lot to in terms of their success as their outcomes. They don't really people don't really talk about the underlying conditions, kind of like the the existing culture. Their government is set up differently.

They're, unicameral versus bicameral legislation. There's more veto points, in in America. So, those like, everybody wants to copy and paste the outcomes, and I can see why. But can we copy and paste the underlying conditions? Absolutely not.

And that's why I try, but I will try again to caveat that slide. I almost didn't want to bring in the models, but I just feel like we end up having to talk about models all the time. Are we ready to talk about specific proposals? I want to continue to underscore that point as I don't think we're ready to talk about specific models just yet.

Understood. Thank you.

Thank you. I really don't have a question. The conversation

You're trying to resolve that right there.

Well, no, this is all good. I really want No,

it is.

Well, welcome home. I'm a

mess here. Thank you. Appreciate it. Yeah, it's good

to go. Thank you for setting the framework of the priorities and organizing this in a very thought provoking way for us to seriously, you know, we got our work cut out for us, in other words. But I'm so glad you made it here. Thank you. Thank you for having me.

I look forward to the continued conversations.

Keep in mind, you guys, we can also do questions and send it in to Doctor. Choi and get responses as well later. I'll move to this side of it.

Okay. Yeah. Okay. Any questions?

Thank you

very much for your presentation. Aye, when I looked through your slides, what I what really struck stuck out to me was that there wasn't a lot of mention about how Hawaii is different than other places. There was a lot in your talk about that type of thing. But I think in terms of thinking about policy and designing policy for Hawaii, I think the the panel would benefit from understanding from some advice about how we should interpret outcomes in other places in Hawaii context.

The one that I can think of is primarily around geography that we're this small island.

There's not people passing through. Yeah. Like, with the tribal model you have a casino on the edge of a highway and there's a lot of people just going past that stop in and that's sort of been the most successful part of that model and that's definitely does not translate into the island context. Yeah. So I wonder if you could just talk a little bit more to that about perhaps other dimensions that we can think about as well.

To sort of address

both questions here at the same time, like, sure. I I am coming in as a quote unquote expert here, but gambling is a multidisciplinary field. And in many ways, I'm very much in over my head here. It's it's an all hands on deck sort of situation. There are more models, more questions, more public concerns, than I can become an expert in.

So when it comes to Hawaii specific concerns, I made the point that we're struggling on behavioral health. But you know, does that make me a behavioral expert health expert in Hawaii specifically? I cannot speak to that very confidently. I think in general, my goal here is to just have a more thoughtful conversation, before it just kills the bill or I don't want to talk about it. That's really my main purpose here today.

And if I can contribute a little bit to just sustaining a little bit longer of a conversation, maybe those things will start to come out about, hey. We gotta think about this for our our locals. Sorry. I feel like I missed a specific aspect of your question.

Talk to the specific things that you can talk to as an expert in whichever field you feel confident to talk to. Yeah. But in the context of your your local knowledge of Hawaii and how that might reinterpret some of those findings.

I think, you know, how collective we are, how sensitive we are to talking about uncomfortable subjects. I don't know how, like, for example, like one of the questions I think about a lot is how would we even start to survey people about their gambling here? You know, would people even feel comfortable about talking about this? Because there's so much stigma around it, and it is an issue that is sort of easy to dismiss.

So that sort of cultural sensitivity is something that that, you know, I'm gonna need a lot of help on

to figure out how

to test that. That part covered. That that could be a problem for us serving people Yeah. Of where they speak their mind anyway. But I think what he was asking was if you could relate Hawaii to, say, one tribal casino that you're passing by that kinda get maybe the population match up to Hawaii and native Indian or tribal to native Hawaiian.

And I could give you time to think about that question. If you wanna respond later, that would be helpful. But I think it'll lay the the platform for us for also the next meeting and, one speaker that probably could relate to that as well, if you don't mind.

Yeah. But it's just it's been a so my understanding of the the travel models is that the more successful travel casinos are are the ones that are on the edge of a reservation say next to a major highway.

They

have a big population center nearby. They have a big flow of people from outside of the reservation attending that casino so it brings in a lot of outside.

Yeah.

And that money is used to then benefit that community. Right, whereas

ones that have worked less well

have been where you have a tribal casino say in the center of a reservation perhaps further away from outside population centers so they don't bring in so much money so you end up with more of the social harms within that sort of community. Now neither of those kind of apply directly to Hawaii. Yes. It's gonna be some kind

because

of mix

you get tourists coming in and out. But then we also have tourists already spending a whole lot of money here on tourism activities that's gonna crowd out a little bit of that as well so there's a lot of contextual stuff in terms of the economics that I know about Absolutely. And the geography. What I was more asking you about is if you can bring some similar kinds of perspectives, say, from social the areas that you feel, you have an expertise in.

Okay.

I will take up senator's, offer on thinking about it more, but here's what I have now, which is, you touched on, like, you know, local versus, tourism market. You know, if if you have one in Waikiki, that's gonna feel a lot different than the one that's gonna be out in, like, Kapolei or something like that. Right? Who is the clientele? And I think ideally you wanna leverage the tourism.

Right? And that's gonna be more brick and mortar, less online. Less online, I get, I get pretty worried about, or like, sorry, if it's all online and no brick and mortar, I tend to get worried about that one. So, and then that location matters about, what is the expected sort of, sort of, business coming from? Is it coming from locals?

Because the, you know, how, like, if it, like, when we're talking about, like, what kind of revenue are we looking for? Are we looking for seasonal revenue or day to day revenue? You're gonna have to weigh, like, how much do we want this to be a tourism driver versus kind of a local thing? And that's kind of where that location matters.

Like, do you want this like, if you put one in the middle of Kahala, like, that's gonna behave a lot different than if you put one in the middle of town.

You know what I mean? So, those sorts of kind of specific decisions, and that's kinda where I'm like, you know, when we talk about, like, cruise ships and, like, the stadium. And, like, I don't know if we should be jumping into proposals like that because we have to really think about kind of these very specific geographic factors.

I think ideally, we would want more outside dollars kinda coming in as opposed to that money circulating internally, specifically when it comes to economic concerns because Hawaii also faces a lot of strain there in terms of the cost of living pressures.

So so so I think the last speaker had spoken about that, a little about that in on outcoming tourism coming into us at a native Indian tribe level. So we have some of that information that can be shared and you can look at that speaker as well. But I I gotta move on. I'm sorry.

Oh, yeah. No. You know, doctor Cho, thank you so much for your presentation. It was very invigorating, and you did share a lot of, a lot of things that, you know, did answer questions partially. And I and I think we need to take a deeper dive of of, you know, your headings and things that you explained to the board.

You did kind of answer my question, but starting with, you know, things that are moving forward and where we can end up. So and you described two different ways, the ways that you can go really bad and the ways that you can go really good. So I don't want to I know we have to talk about the bad. And we can save the conversation for later.

But in your eyes and you being a local, if we said that the goal is to create new money to the state and to uplift our communities and uplift the quality of life in Hawaii for its residents, And so that's the outcome that we want.

What approach would you take?

Honestly, to get to the good, you have to talk about the bad.

I hear you. Yeah.

I just didn't wanna do that today. The weather's nice outside. You wanna go? Yeah. Yeah.

Yeah.

I'm gonna have a good afternoon. Yeah. I know

we have to have that.

Yeah. The problem is when we talk about the good too much, that's when we start like, our our eyes get bigger than our stomach sometimes. That's really the takeaway for me. And the more time I spend in this stuff, I'm the more I realize, like, every time I think I've uncovered the last rock, I'm like, oh, shoot. There's there's more we can do.

And that kind of goes back to my system, to my my thing about there's no perfect system. And even the even systems like Norway, you know, they have have have challenges as well. So, what I don't what does that, you know, best case scenario look like? I I think it it it does affect things like quality of life, standard of living. You know, can those things be uplifted, making sure that, you know, there's meaningful inclusion.

And, you know, can it be an economic driver for the state, rising tide lifts all of that sort of thing? I think, like, I want to believe that, but I don't I need to know more about the how, what specific, you know, priorities there are in terms of, of, you know, outcomes. Are we are we focusing on tourism or are we focusing on, you know, law enforcement and behavioral health?

You know, like, if you just say general revenue, we all we all know how that movie ends. Right?

Like, that's where that specificity matters. Right? It's like, okay. Like, it needs to such and such goes to the general fund, but this needs to go to behavioral health. This much needs to go to law enforcement.

You know, that's, that's, that's the best case scenario is where there's these specific line items of where this is going. Because if I start hearing like, oh, just, you know, economic boon for the state, I that's, I get skeptical when Aye, when I just kind of hear this sort of, sunshine kind of, painting that picture. But I think that's kind of the devil's in the details. Like if we want that, like, it's going to take that level of diligence.

And to the earlier point, yeah, you got your work cut out for you, if you want to start.

And but I'm glad we're having this conversation because it's much more productive than the should we legalize or not sort of thing.

Yeah. Fair enough. Thank you.

I appreciate it.

Thank you. I think it'll help us guide us to, speakers in you guys to the details and stuff like that. Yeah. But,

Paul? Doctor. Chow, thank you. I appreciate the presentation.

Thank you so much.

Lots of great questions in there. I think a couple of things, I I believe you're spot on with the prevalence study. It's gotta be done before anything else happens. Right? You need a baseline.

You need to understand where you're going. You need to understand where you're at before you understand where you're going. I think that's really important. The r the RG, the responsible gaming problem, gaming components need to be part of any package that that's part of that. I mean, you've gotta have those solutions in hand.

And could you go back one slide? I think it's your slide five

Sure.

On this one. I I think this is probably one of the most important things you brought up is you gotta know what you're solving for.

Yes. Yeah.

And there's probably a few other things on that priority list that you'd you'd wanna add. There's probably a lot more you wanna add Yes. To think through and and understand.

Yeah.

But I I think that's the key piece of that. Right? Because gaming can be a catalyst for good when you figure out what the good is that you're solving for. And I think you've seen it in all the other jurisdictions. Like, online gaming is a very different beast, right?

Sports betting and the prevalence of that has soured a lot of the conversations because of the ads, because of the promotions, because a lot of the other things. Predictive markets has has jumped into that, you know, with both feet, both arms, whatever you wanna whatever analogy works. But I I think the key piece of that is understanding, are we solving for a job creation? Are we solving for economic diversity? Are we trying to get a little incremental spend from from those tourist markets?

And you're right, location matters. Right? I mean, if if I'm out in the middle of nowhere, I'm probably not gonna do the tourist draw. If I'm in the middle of Waikiki, I might not get a locals

But it's it's one of those things that depending about where you're solving for, maybe that's the location conversation that needs to happen after those things. You're understood. Yeah?

draw.

Absolutely. Yeah. And and that speaks to, you know, like, let's get that initial data. And and to the earlier comment, I I wanna, I'm trying to stay like, local and optimistic because, you know, I believe in our people and Aye, Aye, I feel like we got the aca mite. We can figure this out.

That said, you know, to the earlier comment of what does the sunshine and rainbows picture look like? I think what to use that analogy, like when we have a good time at the beach with locals and family and friends, it's because we know we got everything taken care of at home.

You know, we got the plumbing paid for, we got the electricity bills paid for, you know, we got, you know, our relatives there, they got the health treatment systems going, you know, and that takes a lot of work and it takes some confronting some hard questions sometimes.

But that's, to kind of go back to that point, like this list is probably incomplete, you know, and that model, the one I have after that, like this too, you have to show it to your constituents and say like, hey, are we missing anything here? You know, this is just a preliminary start of a conversation framework that I'm trying to present today.

We appreciate that. Yeah. Thank you. Yeah.

I I just gotta comment on it was funny how you said not it wasn't funny, but I thought when you say that after you get your bills and stuff paid for, you know, this is why you're at the beach. Yeah. It's the reverse of that. If you don't have that pay for you, you'll go to the beach to, like, Kinda Soak your head in water, like,

let them know.

Yeah. Yeah.

Inside joke.

But Okay.

But I got you.

But, you know, it's Yeah.

Sometimes you gotta go there and just kinda, like, dissolve and stuff. But Yeah.

It look

Yeah. I

I'm going to Zoom because I know we we we're short on time, but I see Paul, Paul, is that you up there? Yeah. Paul? You have anybody in Zoom line have questions? Sorry.

Yeah. I I do. I'm Jim Dillon from Hawaii at Delt Mental Health. You know, the the prevalence of of gambling disorder among gamblers is about four percent, perhaps. And that's actually not a very high rate if you compare it with the prevalence of alcoholism among the general population.

Also, there's a high comorbidity for gamblers with alcoholism and substance abuse. There are so much so that they're almost the same group in some respects. That is one meta analysis found seventy three percent of gamblers having an alcohol use disorder and another thirty eight percent with a substance use disorder. So we're not talking about people off the street who are perfectly ordinary and free of substances and mental health problems who walk into a casino.

Think it would be fun to try a slot machine and find themselves on Skid Row a year later.

We're looking at a more general problem of addiction, perhaps. But but putting it in that context, how how would that affect your assessment of harm? Individual harm. Obviously, there are many other harms associated with gambling, but with respect to individual harm, evocation of gambling disorders Can you comment on that within the perspective I gave you?

Thank you. Absolutely. I really appreciate that perspective. And comorbidity is absolutely important, also to some of the points that that you raised as well. It's like, you know, we already got a lot of problems.

Why would you, you know, and in New Jersey, for example, average emerging adult participates in four plus camping activities. And, you know, there are also high rates of comorbidity among alcoholism and other substance use. And also four percent, I've seen as high as seven to ten percent. It kinda depends on how you measure the risk factors. But that if you conservatively, if you think about that, that that's like one in twenty people.

And, like, to my potluck analogy, like, all it takes is a couple random potlucks, and you're problem gambler at some point. You know? So, to to that, to the point about, you know, individual sort of risk, I think I lost my train

of thought here real quick.

Could you repeat the question real one more time for me?

Not the whole thing. Yeah.

Not not the the

That state of alcoholism is much higher than the rate of gambling disorder. Yeah.

Rate of alcoholism amongst gamblers is quite high. And that has to color our understanding of of the individual pathological impact of of

Yeah.

Absolutely. Okay. I got it. So one of the the the point I would make there is that if Hawaii decides not to do anything, not to legalize, just to keep it the same way, the status quo, that too is a policy choice because Hawaii already has a system for gambling. It's a largely unmanaged system, but it is a system nonetheless.

And as I pointed out, there are continuing exposure risks with prediction markets, advertising. Like, we get affected by the Mainland whether we like it or not. So doing nothing is still a policy choice. So I would say, can you have gambling and comorbidity with alcoholism in Hawaii currently even though it's illegal? I would absolutely say yes to that.

Thank you. Who anybody else on Zoom have a question? If not, I was gonna move on to the next presentation.

Chair, this is Darren Sato. Sorry. It's so short here.

Darren, go ahead.

No. No. I I it's a quick one. And I appreciate the last comment because that's kinda surrounding my my question. You know, our clinic, Kalim Palama Health Center, is in in Kalihi, and, obviously, there's a lot of, you know, gambling establishments here.

And and the way I'm looking at this is if we decide that we are gonna do gambling, and and my question is more of a of a overall sort of question. What are the other things that needs to happen in order for us to be and and this may not be a question you can answer, but just something to think about. Once that decision is made, how how quickly do we need to move to get people to in my profession to get credentialed for that?

Are there other state departments and things that needs to be looked at to regulate what we do? So that's one thing.

And then the second thing is what you just said. If we choose not to do anything, we still have that problem that we need to discuss because there's still the issue. And so whether we do it or we don't do it, I think we have to come to the conclusion that there is a gambling addiction problem here.

And I think that whether we do or we don't do, we need to figure out what we're gonna do about that because to just say that, oh, I guess and and I I know I'm talking kind of a little weird because people in my profession say, oh, we're we're against it, but I'm I'm very open minded about it because in my mind, in my experience here in Kalihi for thirty years is, you know, you can't turn your back away that we don't have a problem and think that just if we don't if we don't pass this that, oh, the problem we don't have a problem because we do.

And so whether whatever we decide, it's still an issue.

Whether it gets bigger or smaller, we can debate that if we legalize gambling, but I think the for me, the elephant in in the room is we already have this problem, and we're really not doing a whole lot in terms of treatment side. I'm not saying about the police. The police are doing a wonderful job. But on the treatment side, I don't know if any of my colleagues are even so I'm not so I don't I don't even know how to get the certification for gambling.

And I don't know even if our state is set up to regulate and and keep track of us if we're doing it.

So it's not maybe it's not a question share. It's more of a statement, but I just wanted to throw that out. Thank you.

No. And and and just keep in mind, this is why it's a working group. So a lot of the questions that you guys do have is to bring that in a report to be delivered to be delivered back to the legislature next year. So all of the questions, if our speaker, you know, maybe cannot answer or can direct us to someone else, it's so that we can get the answers to the questions that you do have. So just keep that in mind as well.

Did you

want me to comment?

Yeah. You I'll give you thirty seconds on

that. Okay. I know. Thank you for bringing that up. Yeah.

I I I think I think, part of my goal here was to sort of add some nuance to this conversation beyond legalization or non legalization because I think the point is very clear. Gambling does not disappear simply because you decide not to legalize it. And I think there are, within that nuance, there are investments that you can make small investments in behavioral health treatment, training, related to gambling that had nothing to do with whether we should legalize casino gambling at all.

And I think those are absolutely worth exploring.

No. Thank you. Okay. Doctor. Cho, thank you so much.

We appreciate the presentation and and your answers to the questions. And I'm sure we're going to have more to send over to you as well. But thank you very much.

Mahalo very much. Yeah. Thank you so much.

So next, I want to bring up our next speaker. And of course, I'm so sorry. I got about another half an hour, for your presentation. Oscar Carvalho Valencia is an economist economist at the Hawaii Department of Business Economic Development and Tourism, where he leads the update of the Hawaii 2022 input output benchmark model and contributes to statewide economic policy analysis, including tourism forecasting and evaluations of proposed online sports wagering.

Doctor Carvallo holds a PhD in economist from Vanderbilt University and has over fifteen years of experience in banking, financial stability, and macro financial policy analysis.

He's held senior research and policy roles at the Center for Latin American Monetary Studies, the Central Bank of Venezuela, and Mexico's National Institute for Employee Consumption. Focusing on bank capital buffers, efficiency efficiency competition, macro prudential regulation, and financial system resilience. His research has been published in leading international journals and has taught economics and finance at the graduate level in The United States, Mexico, and Venezuela. Without further ado, Oscar Caballo

Thank you, chair.

We do have your PowerPoint, and if you wanna just highlight certain areas, I know I don't have a lot of questions as well.

Thank you. Aloha.

Aloha.

Chair Decoy, deputy director Wicker, distinguished members. Thank you for the introduction. So the reason I'm here is because, s SCR 121 requires the bed to provide support, to the working group in carrying out and carrying out its duty, including the preparation of the report to the legislature. So what I'm going to be presented today is an outline of that final report. It's gonna be a document that is meant to be circulated.

Actually, it was circulated already for members to assess, to include inputs, to suggest priorities. So this is the intention of the document. So what I'm going to do is going to be presenting this document. Also, of course, this presentation reflects the progress and evolution of the working group discussions, hopefully, to date by integrating the principal team, policy considerations, the state experiences we have been looking at, and the analytical frameworks. Hopefully, we can that is going to be reflected.

So again, so it's a it's a draft. It's a draft outline. And the as I mentioned, it's the intention is to provide a proposed structure for this document. We are halfway there. Right?

So we should we should be able to identify principal topics and analyze an analytical area to be addressed. Also, this is to facilitate the discussions. At the end of the day, it's to solicit this recommendation for additional issues, data perspective to include. So it's flexible, of course. It's evolving.

It's your document. It had to become your document. We're just a mediator here. So the structure the structure of the final document, the final report of course derives from the requirements of the resolution. Right?

And what what the resolution is asking basically at these five core pillars. First of all, benchmarking benchmarking other states. And what that really means is to have a panel idea of critical variables in these markets. Right? What is the amount amount of wagering per capita, right, in different states?

What is the amount of revenue in different state? What is the number of operators in different state? And we have measures of social cost associated with gambling. Right? And we have measures of or ranges for interest rates that are applying these markets.

We have license fees, right? Innovation license fees. We have all these different variables. We have to we need to have an idea of what is up there. And it's a it's an experience almost all states, but two of, already some forms of of gambling.

Right? So this is the first requirement. And the and the idea is to be able to see how how wide future will be reflected through those variables. Right? Through those parameters.

So I think this is an area where, because we participated on last year online gambling, sport gambling working group, we have already some collection of what these variables are. So the the databases are identified already. So I think we are pretty much on track on that on that regard. And then the second pillar is to review the legislative models in other states and in Hawaii.

So we have a very extensive experience already with proposals have been that have been that have been brought to the to the floor in the legislature.

And so we need to review this history and then what happened in The United States. So that that's the second. Then the resolution put an emphasis also on the dislocation specific feasibility regarding Naset. Tool that have been examined before aiming on basal, right, regarding the the spatial economic soil. They I I checked a a report that was made by my ex administrator thirty years ago, Eugene Twan Twan.

He was basically about the same concept. Right? So he's been around. And then the second thing is the fourth thing is to be able to have a comprehensive comprehensive policy framework. Once we identify what are the models up there, right, we're gonna we're gonna take a look at basically what what are these different modes of providing gambling, different state, different moralities, different models.

So we need to have an idea of how to evaluate those in a series of dimensions. What economic growth is going to be bringing by different models, hypothetically, job creation, capital investment required by both by the private sector and the and the public investment, tax revenue that to be collected, and and have a full framework to to evaluate that. And this is this is where our model, our Hawaiian model, is an ideal tool to to evaluate, right, to value different proposals from models.

What the what the Hawaii model does is is it's a picture of the Hawaiian economy at its companies, right, and the interconnections between regions and different economic sectors in the economy. It allows to see how new creation of demand on some locations and particular counties or sectors is spread out and linkage to the rest of the other sectors in the economy.

This is exactly what what a what a policy framework should look at. Right? If we are gonna make we're gonna be creating this market, what are gonna be the output effect, what are gonna be the taxes that are gonna be created, what are gonna be the the earnings that household is going to be collecting as a result? So the IO model is is ideal for this.

Of course, this policy framework had to integrate all the things we have been talking about here, such as the financial aspect, community benefit agreements, right, and and and the assumptions that we're gonna be making about the different models.

Right? And finally, there is another component. I wish I had a little water. So the final point is the alignment with the tourist strategy and and and actually how the yeah. The this new market integrates with the economic development strategy, right, and the work of Tibet and how I enter tourist authority.

Right? So people's people's questions, I think. I'm gonna skip a little bit here because this is basically what we're talking about in a previous presentation. Right? What is the primary objective we should optimize?

And here at least I am listing what I consider was at least of the three main the three main objectives. We saw there's a larger list. Right? But so we need to we need to have clarity about Thank you so much. We need to have clarity about what is the what are the subjects.

Right? Revenue, the integration with the insurance matrix and also control of administration. We have an illegal the legal market, minimization of risk. Okay? So what are the type of gaming, type of gaming that are on the table?

If we look at the resolution, it's asking to look at these different type of gaming. Right? Casino, casino resort, casino integration in the context of nation. This is one of the question that I I will seek to get guidance. When we think about a casino integrate a casino resort, say, or a standalone casino, are we are we how we are visualizing that in the context of the of the master plan is right?

We need to have clarity on that because we need to know we need to do precisely what kind of capital investment are we are we thinking about. Right? What is the what are the ballpark amounts? Right? Is this incremental to Nascent?

It is within the context of next Nascent. Okay? Are we thinking about a sport betting online? That's a different model. It's all the the niche the cruise gaming is a niche is a niche market.

Or are we thinking about full scale casino, Las Vegas stuff? So these are different models that have different implications, different economic and socioeconomic implications. Right? And finally, what level of risk is acceptable regarding we had talked about this multiple presentations regarding the problem of gambling, the protection effect, and revenue volatility.

Chair, do you want any comments as we go or

just towards the end or whatever? Wanna do, doctor Farf, if you don't mind, because everybody has the PowerPoint that you have, and it's basically a halfway point of what the working group has done. I would prefer that the questions be asked. Can I I I wanna I want the committee to start asking questions?

Sure.

And I'm sorry because I only get this Room 230. So I'm gonna start from this side of the room. Okay. Start with Paul and then we'll go back this way if that's okay with the company.

And maybe just one slide back if you could. And I was just following along with you. So, so well, I guess on this slide, one of the key risks would be doing nothing. Right? What happens if you do nothing or if you do it wrong or some of those other sort of questions and answers that we talked about in the last presentation.

The slide before that where it talked about the feasibility. I'm not sure who's judging the feasibility on that. That seems to be like either the working group or the legislature would have to determine the feasibility on each of those from a capital investment. I'm sure we could, you know, come up with numbers that would work out in there. But, you know, what's feasible, I don't know if any of those are any more or less feasible than the others.

I think the economic impact, for example, sports betting, we learned that was pretty minimal last session or 25, I should say. So I guess, you know, judging those, we haven't had any presentations on the economic impact of all those versions yet. Okay. And I know we're just creating kind of a template to fill in the blanks here.

Fair enough.

Yeah. Some of this information, I think we got from, Jeremy Quarrel's presentation on some of the economic impacts from generally speaking, but, we didn't go through each of the options and and do an economic model around those.

And and then I then we're taking notes as well. Well, this is on halfway point draft on behalf of DBED. If, you know, Art, do you have any comments or questions or Yeah. We'll just work our way down and

I'll do I'll do something real quick. You know, as you talk about economics and and and outcomes of different types of gamblings. Yep. So, you know, you talked about online or sports betting or different types of betting or gaming. So my question to you is, I'm gonna give you two examples.

Say we build a awesome, shiny, very bright casino. Right? And and let's just use 100 as a number for percentages. So when there's a casino, every $100 of revenue, how much goes to operational and then to the shareholders? And what's left is the profit and what's the what's the percentage of profit sharing to the state.

That's number one. Number two is state lottery, 100% owned by the state. You know, and it's not gonna be the big gambler. It's not gonna change tourism, to preserve identity and culture. Right?

You go to a seven eleven, you spend $20, you get $5 left, you buy you buy 10 scratch off tickets or whatever it is. Okay? State lottery. Based on that revenue, how do you see the administrative and the the percentage of percentage of profit

and disbursement

Okay. Versus the We're talking about online gambling. Out of a 100 wagers, about 9% is gonna be revenue. Right? Out of that revenue, depending on the state, so the state will charge you 50% of that New York, or the state will go three or 4%.

Right? So depending on the state, on average, you will say, like, it's about 50%. So now you have, some 6% of wage year, right, as your net revenue. Out of that, so the state, depending on the state also, the model, you you need to figure how you're gonna fund problem handling resolution, how you're gonna be funding the administration, the regulation of the state. And and their models differ.

Right? Sometimes it's it's financed out of taxes. Sometimes it's financed out of get out of fund. Right? Sometimes there is an allocation of out of taxes for affordable housing to fight.

So it depends on what is the model in each state. But, basically, what you see out of the 100 that goes into the operators is about four or 5%. That's the net. I I think that's the question you're asking. Yeah.

Yeah. And and

How much is staying in the state? Yes. It's minimal in under this model. It's all these leakages. Right?

The part that remains out of all that account goes out of the state because all these operators are basically out of state operators. We're thinking about this model about this market. K. Makes sense?

Yeah. Yeah. It it totally does make sense, and and thank you for your answer. But to be fair, you know, brick and mortar, bright and shiny casinos can bring in billions versus, you know, state lottery. It's gonna be as in the millions.

Right? So the I I just wanted to make it fair just just to say that brick and mortar brings in more revenue than a state lottery.

There is no doubt.

I just wanted to make it Brick and

mortar models,

more economic activity to the state. Yes. Right? That's in the jungle. That's almost by economic logic.

I want to bring

And then these online models, period. But you see, most of the states are now way towards a limited constraint, constraint, but a combination of hybrid retail, online gambling plus brick and mortar. Right? That's that's most of the state are. Now the scale of that, that will depend on particular market.

Right? Are we thinking for Hawaii? I'm not advocating for any of these models. I just, at some point, we will have to take a decision. What we want to model?

What we want to evaluate? We're thinking about nascent. Are we thinking about an Arizona model when you have medium sized resort, casino resort? Are you thinking of a standalone casino that is going to have some synergies with the rest of the master plan? And by the way, the sequence is going to be important, right?

Because you're trying to create synergies, right? So but you can't figure out Florida model, right? Florida model to have standalone casinos. We're thinking about that. So that's a different model.

Are we thinking about

And I think we can look at all different types of models, which is why the group exists, is to see what what they're doing here in in the tribal areas. What are they doing here in Virginia? What are they doing here in boy? But, no, thank you for that analogy. But let me move on.

Yeah. Thank you. Thank

you for for sharing and for these slides. I've briefly gone through a few more of the slides. I mostly just had had two comments around the the IRO model. Thank you for your work on the IRO model. I've also used that myself.

I just wanted to add in that perhaps you need to I didn't see it listed here, but you may have thought about it anyway, would be the export revenue that's generated, basically, from outside revenue coming in. And it's that listed as being a economic impact. You know, it's part of the annual outputs of it as this additional export revenue.

You're talking about the model, the evaluation model?

Yeah. Yeah.

So I've just looked at your sort of sketch. It's the

Yeah. Yeah.

The sort of inputs and some that you're gonna put into your IO model. But I would add in there the export revenue that would be generated from this, but also add in the flip side of that is the the opportunity cost of this of their tourism spending revenue spending shifts. So you may get at the tourists rather than spending money in the resort and in the restaurants, they're spending that money at the casino instead. So both of those things need to be included.

And then also when you're thinking about, you know, what types of gaming are are on the table and you've got the the stadium district model versus a full casino, the full scale casinos one is also gonna vary depending on where those casinos are.

If you had just limited to the center of the resort district, it's gonna be very different than

as you had already.

So I would suggest sort of listing that as kind of a separate

Yeah.

One altogether. And you're gonna get different balances of these two, export revenue versus opportunity cost of tourism.

So what

we're gonna have is a series of assumptions about what are the models that we're going to value. And then we're going to see the construction phase, the economic impacts in the construction phase, and then the operating. And then but we need to have an idea of what is the incremental demand that is going to be created as a result of of of of of in this market directly related to gambling and also non gambling activities.

So what you wanna achieve here is people coming gambling, right, but also creating economic effects on other correlated sectors. There is displacement also something to consider.

There are leakages. Right? So the output the input output model is an ideal model to see all these leakages and these synergies in the economy and the whole economy. Not only in Ajo Honolulu but also on the other islands. And so after that, we will have an idea of what are the TAT taxes, total taxes that are gonna be generated, GAT taxes, gambling taxes, licenses, etcetera.

And on this on the cost side, we're gonna have the financing cost. We're gonna have the opportunity cost of this project. There's gonna be an allocation for that. There's gonna be an idea of what are the annual social cost associated with this.

then we're gonna have to we're gonna have to discount all those and compare to the initial investment. This is what we're gonna replicate for for all the different models.

And

And there's one other additional point I wanted to add to this. It would be good to see some sort of sensitivity analysis around some of those assumptions too because I think some of those, you know, it might mean that if you slightly over underestimate a lot of these things, you won't have much idea as to what it's gonna be very arbitrary, the assumptions that you have to make. So, therefore, having a sensitivity analysis around those if it happens to be different in a certain direction.

Yes. The sensitivity analysis is gonna be around, what is the actual level of incremental demand that's gonna be created both in tourism and not tourism related, and also what is the severity of the cost associated with the different model. And those are basically optimistic, pessimistic. There's also a variation about the financial model. Right?

So we we have been talking about partnership. Right? Public party public private partnership. And there are different modalities that can take how do you incorporate community benefit agreement so that each different model is going to have a different accounting and a different calculation on the different scenarios.

Thank you.

It was over our time. Thank

you. No questions?

Sorry. Doctor. Corvallo, how will information from today and future meetings be incorporated into your draft to ensure consensus is achieved? Because we have just heard something completely different than the outline provided. Additionally, how were those feasibility studies determined?

Because we heard last month how cruise ships were a non starter and why is the stadium location there when nothing on that location has been presented for the committee?

What is exactly the contradiction in today's the first point you mentioned?

The first part. How how will you incorporate information from today's meeting and future meetings after this? Because, we haven't heard all the

Okay. Finishing. We have had we have had several, presentations and discussion.

Right.

We we hear about the, the tribal model. Right? We we we hear about the Yeah. Resort. Right?

We have heard about, public private partnerships. We have heard about regulation. Right? We have we have this presentation by ADA. Yeah.

We have heard about costs. Right? All the social costs associated. So the intention of the document is to try to all this discussion. Right?

All these elements have it in the framework. Now your your your task is to let us know what elements you think are being are important to be to be developed in the framework. What is missing? What are other additional elements you see? Do you wanna see more clearly reflected in the framework?

So it's not a definite. That's what I said in the beginning. It's not it's a flexible document. Of course, that that's an the other issue is and that's beyond my responsibility here is how what happen if we have too much of a deep divergence regarding, you know, what is the finally what are what are the conclusions of the working? Right?

And that is possible. Right? But that that's part of the task of the the working group. What we're trying to provide here is a framework to to contain the discussion and and also to have a a framework to evaluate the different proposals on the different you know, it's a it's a methodology more or less established.

You wanna see how much from the point of view of of the taxpayer, you wanna see how much fiscal the fiscal view is how much how much taxes are gonna be generated and what is the investment, right, that the state is is putting into the project in different models.

Right? Of course, there are different other or different dimensions. Right? Or you might be relevant the social cost or the social cultural elements. Right?

And you you might think that this is not considered enough in the framework. Right? That's part of the discussion.

Well, we're gonna present next month. So I just making sure that these things won't be implemented.

We did is it it might be helpful to to refer to last year online gambling, but we did at the at the end of the day.

This is what we're gonna do. And and, Brandon, Brenda, thank you for bringing up that point because part of this framework was to take a look at where we are at the halfway point, and then those that are missing or what you're saying, trying to be reflective of this report to make sure those things are addressed exactly what you've seen. And I just gonna leave it at that right now. I wanna move over to Ken because I know we only got, like, six more minutes.

Ken, and I saw the guys on Zoom, man.

We'll try and do the best we can with your questions.

So I'm

gonna I'll be very, very quick. I I just wanna make sure that I'm clear. As I look, for instance, at the, the five core research pillars and then think about as we get into more detail later on in your presentation, you are encouraging dialogue and inviting edits even at this most fundamental level, right? Not just, you know, nothing is particularly sacrosanct. At this point, you're inviting us to come back to you with our thoughts on this.

Is that right?

Yeah. There's going to be a this is what I said. There's going to be a process down the road. We have to define how to incorporate feedback from the working room, and this is up to the chair of the working room, how to where we're gonna proceed with that. And then we from that point on, we can we can proceed.

Right? So the the the the the very first thing is how you react to this document. What is the feedback? You're gonna you are doing it in on the fly right here. Right?

But, you know, probably it's a good idea to look at at at the document and then provide that feedback through the channels that we're going to determine.

Thank you. Yeah. Basically, that's what we're doing. You know, there's just one document that we can go off of. And, you know, I'm I'm gonna tell you, like, some some stuff I'm not gonna agree.

I might not agree with what the prior speaker said, but it allows us then to say, hey. Can we get these other speakers or other areas that we believe the expertise is there? And, you know, this is just a platform for us to take a look at and go forward. Thank you. Tyler.

Thank you very much. On the benchmarking, I just wanna it's framed as benchmarking against other states. I think you have to benchmark it against tribes as well. Yeah. Tribes are politically different entities in states.

And so I think if you're gonna do benchmarking, even if it's just comparative public finance, I don't think you can just look at Hawaii versus 49 states. I think you have to look at all 251 tribes that do gambling because they all do it differently. And I think the political status of native Hawaiians against federally recognized Indian tribes has been a consistent theme in these discussions.

So just look at comparative state by state data is going to neglect the fact that there are models that exist centralized around indigenous people. And there's like a couple of things that I really just wanna make sure get included there.

Comparison on regulatory frameworks, comparison on like the economic impacts, and then the CBAs I think are different for tribes as they are for models in states. I don't want you to just disaggregate how much tribes generate in revenue subtracted from what the total state revenue is. I think it needs to be looked at isolated. And lastly, I think I don't think I've heard it yet here, but I do think it's worth noting that the tribes get per capita payments based on revenue share.

That would be very difficult to achieve without federal recognition status for native Hawaiians.

But I do think because we've heard DHL and OHA come up several times, this also needs to include an analysis of what community benefit to beneficiary beneficiaries looks like if gaming were to occur on tribe on trust lens. Sorry.

I know

that was like I just rattled a whole bunch of stuff off,

but No.

No. It's that's in the record.

We are recording all this, so it's not gonna be lost.

Yeah. No. That that was good timing.

Oh, 251. Thanks.

No. Thank you. And and of course, I apologize, on Zoom land. But if you guys have any comments off of the this the last presenter, Doctor. Vallejo, please send it in.

That way we can, you know, get more into depth of what we really wanna see because it will be a balance. And, you know, as a native one myself, you know, I wanna see those as well as what the output would be even at the state level, whether it be native Hawaiian, non native Hawaiian, the the models of those different types as well, and then what the percentages and how they look like.

Because, I mean, at some point, you know, legislative policy that goes into place, whether, what Art said on the percentage, those will all remain in what will become after the report. So I kinda wanna look at that framework. Of course, it is gonna give you more work to do on the DBED.

Keep an eye on them. Okay? But I wanted to thank you guys all for being here. Please continue to send in your questions. We can follow-up.

So, doctor, thank you. Thank you, doctor Cho, very much for being here, all of you. It's 02/29. With that, we are adjourned. Thank you.