Tourism and Gaming Working Group

Welcome, everybody, for our working group on tourism and gaming. I'm your co-chair, representative Gregory Ilagan. Today is Thursday, June 18, 2026. The time is 10:00 a.m., and the our. We are at Conference Room 423 at the State Capitol. Before we get straight to the agenda, let's just go around, the room and in Zoom to introduce all the members of our working group.

Let's start off in Zoom. Is there any volunteers who wanna just kick us off and then just start introducing yourself, please? Your name and organization?

Good morning. Gary Suganuma for Department of Taxation.

Morning. Darrin Sato, Social Work and Mental Health.

Thank you.

Hi. Brennon Morioka, Stadium Authority and ACSD.

Hey. Kent Caputo with Marnell Companies and Marnell Gaming. Good morning.

I'm Jim Dillon, Adult Mental Health Kauai Community Mental Health Center. I'm a psychiatrist. Thank you.

Good morning. Michelle Puu from the Attorney General's Office.

Good morning. This is Alan Feldman from the University of Nevada, Las Vegas.

Good morning, everyone. Aloha. This is Erin Midby with Boyd Gaming. I'm here on behalf of Paul Anderson who wasn't able to make it today.

Is there anyone else in Zoom who has not introduced themselves? Alright. We're gonna go to the room. Brandon, if you can start us off, and then we'll go around this way and then end with Tyler.

Brandon Maka'Awa'Awa. Nation of Hawaii.

Aloha. Stephen Goldsmith from the hearing.

Good morning. Art Tolentino Labor.

Stanford Carr from Aloha Halawa District Partners.

Again, Gregor Ilagan, your co-chair, State House.

Jimmy Tokioka, Director of DBEDT.

Tyler Gomes, Hawaii Council.

Joseph Campos, Director of Department of Human Services.

Perfect. Is that everybody here? Okay. With, all the members introduced, let's start with the top of our agenda. We have our speaker today, Brandon Maka'Awa'Awa, is a Hawaiian sovereignty advocate, community educator, and digital equity innovator.

As a Vice President of the Independent Nation of Hawaii, he works alongside President Dennis "Bumpy" Kanahele to manage the Pu'u O'Nui O Waimanalo, a 45 acre sovereign village on Oahu dedicated to restoring traditional Hawaiian land stewardship and self sufficiency. Would you please start us off, Brandon, with your presentation?

Mahalo Chair, Members. Aloha. Now I get the questions. Yeah. Well, aloha mai kākou, of course. My name is Brandon Maka'awa'awa.

What we wanna share today is not simply a conversation about gaming. But for us, this is really a conversation about governance, stewardship, reconciliation, and how Hawaii thinks about long term systems moving forward. Gaming may be one part of that broader discussion, but it is not the discussion itself. So for us, governance really has to come first because the structure ultimately shapes long term outcomes. Next slide.

Before discussing any future framework or long term structure, we felt it was important to establish continuity. Pu'u Onua O Waimanalo, the land base of the nation of Hawaii has operated under sovereign self-governance since 1994. Over that time, nation of Hawaii's governance, stewardship, engagement, and responsibility to our community have continued consistently, not just in theory, but in practice upon our land base. US public law 103-150 formally apologized for the overthrow of the Hawaiian Kingdom and promised a reconciliation process for native Hawaiians.

For us, the apology was an important beginning, but reconciliation also requires long term responsibility, governance, and structures capable of carrying that responsibility forward over time.

Next slide. And that's part of why Native Hawaiian leadership matters in these discussions. A lot of that comes from our rights to self determination, our Kuleana, and the stewardship that existed long before these current conversations began. Land, water, culture, and community are inseparable from Native Hawaiian stewardship. So when Hawaii begins discussing any long-term economic systems or governance frameworks, Native Hawaiian participation should remain central to those conversations.

Because ultimately, leadership shapes how systems are structured and structure determines long term outcomes. Next slide. A lot of this thinking didn't happen overnight though. Our work reflects multiple years of engagement, research, listening, and evaluation. That includes conversations across the Pāʻina with cultural practitioners, governance leaders, economic advisors, and communities.

It also includes participation in legislative discussions, conferences, treaty relationships, and comparative evaluations of both domestic tribal frameworks and international jurisdictions. One important point here is that Resolution 777, which the nation of Hawaii enacted 4 years ago, reflects a process that is already on the way for us. It's certainly not the beginning of the conversation and it's not gonna be our conclusion either. The larger goal, the whole, time has really been to understand what responsible long term frameworks could look like for Hawaii. Next slide.

Out of that process, a few baseline principles started becoming very clear to us. One thing that became very clear to us is that durable systems usually establish governance before expansion begins. That starts with clearly defined governance structures and decision making responsibilities. It also includes free, prior, and informed consent, particularly where decisions affect Native Hawaiian rights, land, water, and future generations. And finally, allocation matters.

If value is generated in Hawaii, the long term question becomes how that value is structured, governed, and then reinvested into our communities responsibly. Next slide. Across community conversations, several themes emerged consistently. People made clear that no framework would be acceptable if it harmed the community, weakened ʻāina or bypassed Native Hawaiian stewardship. Culture was not just viewed as decoration, but as foundational, as something that is living, that must be protected and strengthened.

And trust came up repeatedly. Not trust built through promises, but trust built through demonstrated authority, accountability, and structure. Another consistent concern was ensuring long term value remains connected to Hawaii and local communities. If value is generated in Hawaii, communities want to see that value reinvested back into our community and tied to long-term community benefits. Next slide.

Part of understanding this more deeply meant spending over 4 years looking at other jurisdictions too. That included governance structures, regulatory environments, compact models, tourism markets, and long-term reinvestment strategies. We also engage with experienced operators, advisors, and governance professionals across multiple structures. And one thing that remained pretty consistent across many of the models we studied was that governance and regulatory clarity usually came before long-term expansion and economic activity.

Because once foundational structure weakens, the long-term challenges tend to become much harder to manage over time.

Next slide. And across a lot of these conversations and examples, we started seeing some pretty consistent patterns show up. If decision-making becomes disconnected from community priorities, trust erodes over time. If regulation lacks clarity or legitimacy, systems become fragile and difficult to enforce. And when short-term thinking overtakes long-term stewardship, instability eventually follows.

And for us, this is why structure and stewardship matter so much over the long-term. Next slide. Gaming is not being viewed in isolation for us. It sits within a much broader discussion around sovereignty, around reconciliation, around economy and ʻāina. When we talk about long-term systems, we're also talking about food systems, housing, capital access, health, cultural protection, and native Hawaiian capacity building.

Gaming may become one expression within that broader framework, but it cannot become disconnected from the larger responsibilities tied to community stewardship and our future generations. We're also talking about the realities many families across Hawaii are facing today. The cost of living continues to rise, and more local families are struggling simply to remain here at home.

So part of this broader conversation is making sure future systems are structured responsibly enough to create long term stability, opportunity and support for local communities, especially local families facing increasing economic pressure. Next slide.

So as these conversations continue, there are a few things we think are important to keep in mind. Clear governance structures and long term accountability help create stability and public trust over time. Any future framework should align with Hawaii's broader tourism strategy rather than depending primarily on local participation.

Culture and environmental integrity should continue to remain part of the conversation throughout the process. And engagement should remain informed and community grounded, including principles like free, prior, and informed consent. Where communities have the opportunity to participate meaningfully before major long term decisions are made. Ultimately, any Hawaii aligned framework would depend on thoughtful structure, stewardship, and long term responsibility.

Next slide. So for us, a central question is not simply whether gaming generates revenue. The deeper question is whether Hawaii structures long-term systems in a way that creates legitimacy, accountability, and durability across generations. Recognition matters. Restoration matters.

Reconciliation matters. Long-term stewardship matters as well. And those structures have to continue serving future generations over time. Future generations will inherit the structure we choose to build today. So for all of us, the Kuleana now is to build carefully, thoughtfully, and with long-term stewardship at the center.

Mahalo ā nui for the time today and appreciate you guys being here. I know the working group is kind of a mix-match of a lot of skills and, yeah, different viewpoints, but I appreciate the forum that you guys have given us. And, yeah, appreciate it.

Thank you, Brandon. We're gonna open it up to questions from the working group. Is there anyone who wants to kick us off? Anyone in Zoom?

Yeah. This is Jim Dillon. I have a question. You've articulated very many important and rather broad principles.

You think that the gaming issues are far enough along that you could apply those specifically to gaming? Is there a native view of whether we should have gaming or not, whether it should be a Hawaiian, Native Hawaiian operation. As on Mainland, many natives run casinos, that sort of thing. What do you guys think about that, and how do we well, I think we all really wanna know. So

Appreciate that, Jim, the question. I think that there are many examples of how this is done correctly. We've met with several different tribes around the continent over 4 years. We've seen models that have worked. We've also seen models that haven't worked, and that is why we are so adamant about governance, structure, stability, and making sure, yeah, the the pros kind of take care of the cons in a way.

And, you know, even do more than that, you know, even empower Hawaiians and and take care of our needs. You know, I have a good friend sitting here with me today, Bena Kallick. Their tribe is in California, and what she told me was that, you know, they didn't build a casino to make money. They built a casino to take care of their people, and that is our intent here.

I have an agenda here like some other people here, in our working group as well. And that agenda is to make sure that if gaming does come to Hawaii, it's done responsibly. But Native Hawaiians, I believe, should be central to that discussion because when Native Hawaiian issues are taken care of, everybody prospers, not just Hawaiians.

You know, we're not. We're not the, you know. We're not Abu Dhabi and we're not, you know, the, these guys up on the hill and then we separated from our community. We are securely fastened to the lowest rungs of our social structure.

So when Native Hawaiian, you know, Native Hawaiian issues are alleviated by economic means. That means the money is getting dispersed into the community. That means benefits are not just going to Hawaiians but are going to all the local communities. And I think for us, that's a model that we can get behind. Now, we've been into the Hawaiian communities and have talked with a bunch of different people with a bunch of different views.

And I thank Tyler for, you know, being brave enough to bring this discussion to the table, you know, several years ago when he was at DHHL.

And that was, you know, that took a lot of courage because that conversation had not happened ever. So because of what he had done, you know, the conversation already has been broached. And so we could continue off of that foundation that these guys set. But I think we're just gonna have to do it as responsibly as we can, you know, for what we're gonna do here in a working group.

But I think there are models that can work and we've seen several of them.

Thank you very much.

Sure. Yeah. Go ahead.

Brandon, you answered part of my question. My question is have you had open discussions with other native Hawaiian organizations?

Yeah. I mean, not necessarily, like, you know, like OHA or DHHL and all of that. Although, we have met with people that work at OHA, people that work at DHHL, but we haven't formally discussed things. It's more so we've been discussing in the communities first. Because these are the people that's gonna be impacted first. And so we wanted to hear what are their concerns and how can we best mitigate those concerns moving forward. And so I think we got to meet these hard questions head-on.

You know, we cannot just make decisions that don't include our communities. I'm not just talking about Hawaiian communities. I'm talking about other communities. So we've been to neighborhood boards. Our Minister of Foreign Affairs did a presentation at the Kaimuki neighborhood board.

I did a few and other neighborhood boards and this conversation is continuing. So we've already been going out and you know, just kinda starting the conversation. But, yeah, we've met with several people and I think there's a lot to take away from it. Yeah. If you guys wanna have a broader disguise, it might take up too much time here, but, you know, basically, there are pros and cons.

So we just wanna be responsible when we think about this stuff.

So is there any intention, to say, to open up dialogue with say, like the Hawaiian Council and other people in Hawaii?

Oh, yeah. I mean, that's the intention, you know. I mean, Tyler has a wealth of knowledge by preparing that, you know, that piece of legislation that DHHL did several years ago. And so Tyler is a huge asset to consult with and their organization.

And, yeah. That's the thing, you know, we know this is not Nation of Hawaii trying to do their own thing. This is. We're trying to speak for people that are not here in this room with us, but we feel that it's a very important conversation that we needed to be here at the table and, just make our voices be heard.

Great. Thank you very much.

Thank you, Stanford.

Go ahead.

You know, before we started the meeting, Brandon said I would have questions.

Here we go. Here we go. See, I know I know I sent a presentation to you too early.

But you know what? Today, Brandon, you were heard but you're also felt. I feel that and then I wrote some stuff down here but I felt your presentation was very clear and eloquently delivered. Right?

And thank you for the history lesson. And as well as what the future can look like with what you suggested. I feel that it needs to boil to the top and be recognized. You know, and I'm making a statement instead of a question.

Oh, okay.

So what I'm going to say. What I'm about to say is that there's a lot of people that feel unrepresented. But what you did today, what you gave them hope to a future of the future. That's what you did. And thank you for that.

It's alright. Appreciate you.

I have a question.

Go ahead.

So, Brandon, when the leadership, the Chairs of both House and Senate, and DBEDT were talking about this working group and how we formulate the working group, a big emphasis was put on representation of the Hawaiians and the culture. And we all know sitting in this room, anyone who is Hawaiians, we don't always agree on everything.

But do you feel that as a member of this working group that the selection of the committee and the voice to be heard from Hawaiians has been represented by the people on this board whether it's the Hawaiian Council or you? That there was nobody blocking the voice of the community from the Hawaiian people.

But certainly nobody blocking my voice or Tyler's voice. But, yeah, I mean, I've, you know, what I've told people to, you know, when I talk with them, if they have any concerns, any questions, please contact me. I know the way the bill was written and the way the working group was set up that there was not gonna be, you know, an opportunity for testimony.

So, like, you know, one of one of our our people came to the first meeting, Auntie Germaine Meyers, Berkeley LeGon met her and. But, you know, she shared a lot, you know, and I carry those words with me. You know, I've had to, adjust my thinking on gaming, you know.

I mean, I. When Tyler then came out with the gaming stuff years ago, he was against them. You know what I mean? And so I know how conflicted a lot of our community is and so I've tried to take their words into consideration and when I've been engaging in the working group, I always have their thoughts and stuff in my mind as best we could do, you know.

I mean, I would have liked to see more Hawaiian representatives, more local community representatives, not just Hawaiians, but, you know, different sectors of our people here. But as far as, you know, I tried to do the best I could. Yeah. You know? Yeah. And I think you guys did too. So.

So yeah. So the size of the group, you know, you need to make sure that it's able to move. But to tell, Auntie Charlotte, you said?

Auntie Germaine.

Germaine, I'm sorry. That this group is to take in information and to learn and to formulate a draft of what could be whether it's a ballot initiative or a bill to pass gaming, whatever it is. So the opportunity to testify will be at the legislature when all of the committees are sitting there and all of the committee members can have the opportunity to ask questions and take in feedback.

So just so that you know and Auntie Germaine knows that that's what will happen through the process. Whatever the recommendation is of this committee, we'll move forward to the legislature, and the legislature will decide what goes into a bill.

And then at that time, all of the testimony can be heard from all of the people all over the the state. So just yeah.

Right on, Jimmy.

Okay. Thank you.

Thank you, Chair.

Alright.

So, one, I would like, if you could, in a real brief, like, one minute Okay. Try it. Give us an example of a best practice that you saw in say other First Nations gaming and it could be that you're calling there from California. I'm also very curious about from the human services standpoint, you know, how do we ensure responsible gaming?

How do we ensure that all the services to to make sure that addictive behavior doesn't come into play, you know, that then causes them to then need additional human services and things of that sort?

So if you could just give us, you know, your best practices that you saw.

Well, one of the best practices I saw was from Yeah. In Washington when I visited the Tulalip tribe and, you know, I also was speaking on a panel with Bree. And, you know, what she really told me was that, you know, to the way that this can only work is if native Hawaiians are involved in the legislative process, you know, from the very beginning, you know.

And I think that's, for me that, you know, the economy, all of that, all this stuff, the benefits, that's that's the things that going calm. But if we don't get this right and and and and done in a in a way that benefits our people with our people in mind, the guys that is writing up this bill gotta be able to be the ones that can feel this in our social system and and are connected here to our communities.

And so to me, when these guys were involved in the bill writing process, they could they could actually write, you know, things that actually worked out. And and it wasn't just a benefit for the native communities, but it was a benefit for all the community because when they're thinking about their families, they're also thinking about everybody else's families. Their families is not separated, you know, they're all together. So when it benefits them, it benefits all of them.

And what was your the second part of the question?

But just about responsible gaming.

Responsible gaming. Yeah. We've seen several different models that have worked. Again, looking at the tribal model because to us, it's it's the one that has the most care involved. The responsible gaming is not just a box you check for a corporation.

A responsible gaming, you know, framework has to develop, like, you know, if your uncle had an issue, how would you treat him? You know, would you just make him check this box so you can get your number through the door? Would you sit with them? Would you talk with them? Would you have family, you know, come over there, counsel with them?

You know, really spend the time to make sure and address their issues as best you can, you know. I mean, it's a sickness so, you know, there's there's gonna be a lot of factors that that, you know, make it difficult to to crack through. But I think the tribal model has really shown that, you know, there can be a healthy model of responsible gaming at least, you know, much better than say a corporation that is only looking at checking a box, you know.

And nothing against corporations, sorry Ken. But you know, it's that's just how it is. It's it's done with Aloha.

Alright. First Mahalo, Brandon and Uncle Bobby. I know you guys have gone on this self motivated informational gathering tour, but I was gonna bring up the fact that six years ago, you guys were not. I mean, it was a no. But at some point, something changed.

Yeah.

I know you're not advocating for an end result. You're advocating for a process that includes the law that makes sure that the concerns that everyone are voicing are heard, whatever that end result is, but something changed. What changed and why?

Just our visits around the continent, you know, speaking to the Muskogee, speaking to the Seminole, you know, going to Europe, you know, speaking to different tribes all up and down the coast and and seeing the the good models that and also seeing the bad models too. And what we've noticed was that, you know, the bad models are scary.

And it made us really change our perspective on things because it made us think of like, you know, if we're not involved in this situation, we're not involved in this discussion, we could get a bad model here. And when I talk about bad model is when these decisions are done without the consultation of our people, you know, with very limited governance over, very limited, control over how monies and funds are utilized in the community. That's the bad models.

The good models are are are tribes like the Tulalip, you know, Pachanga where where we go over there and they they walk us through their history and their their history, you know, like thirty years ago, you know, I mean, was was hard, you know. It remind me of, like, you know, our people sometimes in in many other situations, but even worse. And to see where they're at today. And to see that they, you know, they've lifted themselves up.

They've bettered their, you know, their social conditions, and then they've also brought prosperity to the state of Washington.

You know, they've done so much infrastructure work to, you know, help in their areas, you know, the school systems, the freeways, you know, the retos. I mean, so we've met with a lot of tribes that Kinda showed us how this could actually be good. And they also showed us that there is a way to mitigate the issues as well because, you know, we can talk about the good but we also gotta bring in the bad and game plan for that.

Start getting data already for that and some of the things we're working on too is just kinda assessing, you know, the baseline because gam you know, the gambling addiction and all the gambling social ills that, you know, we all talk about is not gonna come when we open the casino doors, you know, however many years in the future. It's already here.

So we should be talking about it here and addressing it now.

Mahalo, Tyler.

Aloha, Brandon. Thank you for your presentation. I really appreciate the emphasis on governance. I think that's extremely important. I think it's also important to separate the benefits that you've described because most of those benefits are very much unrelated to gambling at all.

They just some revenue that can be used to provide for services for your people over different communities in some way. And if that revenue or those services or those benefits can be achieved in another way without gambling gambling would you still support gambling?

Because gambling is then also gonna it creates jobs and Right. There's there's other economic benefits directly associated with gambling. Right. And then there's the economic benefits associated with all the revenues from gambling that can be used for other purposes.

Right? So if we have a better model for achieving those kinds of benefits, what's your take on the remaining bit around gambling and creating jobs and economic activity that doesn't exist at the moment?

Yeah. Great question. I would love there to be more economic sovereignty for Hawaiians, but the honest truth is there isn't. Not one hotel in Waikiki is owned by a Hawaiian. That's our biggest industry right here.

We don't have a say in that. When they legalized Marijuana, not one license went to a native Hawaiian dispensary. We should have a say in that. Any industry that comes to Hawaii, you know, Hawaiians need to to play a role in that. So I'm here on the the gaming working group trying to, you know again, for us, it's not about gaming.

It's about bettering our people. Right?

And so if this can be a driver for that and and and help to bring a little bit more economic sovereignty to our people so that we can, you know, be be less dependent on federal and state programs because look now, you know, all the challenges, all the all the cuts happening, we have no backstop for that because we were so dependent on the government to fulfill our needs in health care, education, housing, and also to me, it's it's, gaming is a means to an end to to better the lives of our people, unfortunately.

And we have to look at all the different, you know, sectors of economy that that might come to our shores. But any economic, yeah, new businesses that come here, we wanna be involved in those conversations early on so we don't get left out, like, what has been happening. Right?

Thank you. Alright. Is there any questions in Zoom? Brandon, I have some questions for you.

Oh, I know they're tough questions. Those come back to me.

I was looking through your slides Yeah. And your subtitle says gaming is one part of a broader system. So it's one part. Now we have tourism as another part. Nothing with gaming. Yeah. What do you see in tourism that's benefiting Hawaiians right now? What model? What mechanism? What what process? How is tourism benefiting Hawaiians?

It's not a lot of examples because I just said we, you know, we don't own a hotel. So it's hard to, like, pick that out. But the stuff that Hawaiian Council is doing currently right now, the kolina, a lot of their programs that are happening. I mean, I think that is really you know, it's helping to provide jobs. It's helping to provide.

Is that money coming from TAT to that project? Like, how do you see that like, that path of residents, community taxes going into projects that benefits Hawaiians? I just wanna understand what that flow looks like for you.

Oh, I mean, I cannot really speak to how you guys how how they do that. But, you know, for me, what I see is economic driving. You know, they're not, to me what what I see with with a lot of the programs that they're creating is they're creating economic sovereignty. Okay. They're not depending solely on just TAT.

I see them, you know, utilizing that those TAT funds to expand and build, you know, a little bit more space for tourism generation and and job creation and that kind of stuff. Because I think ultimately, that's our goal. We wanna get to that point. We don't wanna like solely depend always on TAT, state funds, federal funds. We have to get to a point where we have some self sustaining economic drivers.

And so, you know, there's not a whole lot out there, but the stuff we see that that they're doing, it's beginning to start that up and and, you know, I think

So when I hear you say, it's a yes and. Yeah. You see the benefit of taxpayer money going to projects that support Hawaiians. And you would also like to see in tourism, hotels and businesses and tourism that's owned by Hawaiians. I know there's Hawaiian businesses out there in tourism.

So that is happening. Particularly hotels that's owned by Hawaiians. I'm pretty sure there's lodging that's that's owned by Hawaiians. Particularly how big that hotel business have to be. Yeah. I think that's where the individual being able to have the entrepreneur skills to rise above all the competition that's out there, that's a little bit tricky to legislate.

However, from what I'm hearing you say is what we need to do in gaming is not only do we need to make sure gaming ties into community benefits that helps not only Hawaiians but the rest of the community, whatever demographic. But you would also like to see licensees to particularly Hawaiians. Yeah. Now how do you how do you define that requirement?

How do you, like, how do you say you're a Hawaiian to be able to is it one person like, what's the criteria to be a Hawaiian to receive that license? I'm just very curious.

Well, I mean, there's several different ways to identify Hawaiians. You know, you have the DHHL list. You have OHA's registry. But, you know, I think what we also gotta understand too is, like, you know, we shouldn't just give out licenses because they give one Hawaiian name and one guy that is Hawaiian sitting at the top because we can see how those have become problematic.

I think really if we're gonna issue these licenses or whatever we're gonna do, we have to look at the organization, their track record here in Hawaii.

Who works for them? All of that kind of stuff to understand is this really a Hawaiian organization and and how do they benefit the Hawaiian community? You know, what models have they shown and what have they done, you know. And so and and to go a little bit more back, you know.

So it's not necessarily the requirement of that Hawaiian figurehead, let's say, because they're let's say it's just one Hawaiian and then not no one's employed that's Hawaiian in there. What you wanna see is the enterprise that has integrity, that's carrying out the mission, that benefits all Hawaiians. Really, that's that's what you wanna see.

Well I just like to see people that I think have been in the community for years. For years. What, you know, I mean, maybe maybe we might get together and start one company. It might be one brand new company, but, you know, just just understanding the structure, you know. I would hate to, like, take away Hawaiian from getting this, you know, benefit or whatever.

But I would I would really, really hate to see, just like a mainline company utilize a Hawaiian to get a license here and and kind of

As part of the member of the working group, I wanna recommend you work on figuring out what that criteria would look like Okay. And provide us a good guide guidelines for the report. Okay. So that way we can figure out how to make sure that Hawaiian owned businesses in gaming are established. I wanna ask a little bit more.

If you are thinking about gaming in general, are you more supportive of lottery? Are you more supportive of sports betting, brick and mortar? What's the like, your threshold in which one would be ideal to come in first? I'm just very curious.

Yeah. For me, we've looked at all the different models and I think, you know, kind of the direct benefit to Hawaiians more so would probably be a a brick and mortar, you know, something something that is, you know, even possibly integrated resort, you know, something like that. You know, I think that's the only model that actually, you know, can actually provide jobs.

You know? We don't, like, just open up, you know, one one gas station with 10 slots and, you know, that kind of it's not what we're looking at. It's not gonna change, you know, the the the trajectory of of what we're on now. Lottery, I don't know. You know, I've heard good things.

I've heard bad things. I've heard a lot of bad things lately. The more and more we dig in, it's almost like, you know, nobody can figure out where the money goes. What they say goes to education, but they kinda track them, you know? So I don't know about that but it's just my thoughts personally from what I've seen.

Yeah. One final question.

Well, and also, you know, definitely not online gambling. You know, I feel that online gambling is actually very detrimental, you you know, and could be very dangerous to our community. It's already happening right now with the, you know, Caoshi, those guys, PolyMarkets.

They're already operating in a way, you know, and I feel like we should really begin, you know, talking with the AGs, talking with these guys to challenge these guys, like how California is challenging them because that is the the sleeping, you know, darkness that is in our community right now. People can just roll out of bed and place bets and stuff like that.

That's the real danger, you know, going to a casino on it. That takes effort and all that, but you can just roll out and just start, you know, that's dangerous. So sorry.

No. No. No. You're thank you for sharing your perspective on that. The last thing is, I've been trying to figure this out myself.

Las Vegas has gaming for a very long time. And when you think about regulations and legislation that are established and proven, at first, I was hesitant to adopt Las Vegas legislation because, like, it's just so abundant. Yeah. However, what's your perspective of an area that has been going through so many years of legislation work and regulations to regulate gaming, which is Las Vegas compared to a new state who are still initiating new legislation.

Do you feel like Las Vegas is actually where more robust, more proven, or more, adoptable legislation than a new state who's still going through the Kings and still trying to figure out what works or not.

I'm just curious about your perspective because I'm myself trying to figure that out on what policies to best adopt from where. Yeah.

Actually, I don't think Las Vegas is a good model. I actually think that, the Hawaii model, like, Rachel shared at the previous presentation, needs to be something that is, like, very much for Hawaii and its people.

But have that been proven, that model?

Has our model been proven?

Yeah. That's the thing.

I mean, no. But if if you create a good model, I mean, in the long run, you know, we can see you know, we'll see whether it's good or not. But Iknow if we try and apply a model that just doesn't fit, we can already see that it's gonna go bad. You know, I don't think this is a copy and paste thing. I think we have to really look at.

I mean there's things with the Las Vegas model that I appreciate. There's things with the tribal models that I appreciate. There's things in you know in different sectors even different countries that have done different things. I think we should take an aggregated you know account of a lot of these things that really sit with it and really go through it, but but ultimately, there's a lot of models to look at. There's a lot of people that have done it different ways.

I think Hawaii has to find their way of doing it and really putting our imprint on it.

So what I hear you say, and please correct me if I'm wrong, is that no matter what model we choose

Yeah.

And to adopt Yeah. We're gonna have to refine it every year until it works great for us.

I don't know about refining it every year. I think we only gonna have

know your model works the first time.

So sorry. If I can maybe clarify what I'm hearing

Okay. Please.

Is that, yes, there is no Hawaiian model at this moment in time, but the model that would be created is gonna be based on all the best practices from other first nations models that will then get us to a point where we might have it at, like, 80% perfect and then work to figure out the other 20% as we go forward. Yeah. And that's

what I mean, I think there's an advantage for us coming in so late in the game. Right? We we one of two states that hasn't legalized gambling yet. So we have all the different models and all the different ways. There's been screw ups all over the place that we can learn from.

There's been successes all over the place that we can learn from. And we just go build the best model we can and and, you know, it's it's gonna be on the governance structure and and how that model is, you know, regulated and how it's managed that is really gonna come up. Will it be perfect? Probably not.

But it's gonna be something that at least at the end of the day, you know, we it it's what we after considering all the different models, it's what we think works best.

And just to clarify my point, I'm just saying that wouldn't you try to consider a model that's been tested so many times every year at a place that's really criticizing their their model compared to a new model that's just been adopted someplace else and haven't been worked out and fixed and refined. But like you said, at the end of the day, looking at all the models and figuring out what fits for Hawaii.

Yeah. And I nothing against the Las Vegas model. I'm not I'm not saying the Las Vegas model is totally bad. I'm just saying that I wouldn't, like, just copy and paste what they've done because they've been they've been here the longest, But there are good things to pick from Las Vegas and different places.

Yeah. And that's really what I'm trying to Yeah. Figure out.

Well, Brandon, thank you for your presentation. Appreciate you guys. Really appreciate your insight. Yeah. Our next presentation is from Bree Cole Jones, and she is from Miller Nash LLP, and she's gonna be discussing gaming and government community benefits and adaptive regulatory framework.

I get it. Sorry.

Brie is a partner and co Chair of the tribal team at Miller Nash LLP, where she advises tribal governments and enterprises on economic development, gaming, taxation, governance, and regulatory matters. Alright, Brie.

Good morning. I'm Brie Jones. I'm a descendant of the Quileute nation, and I've spent the last thirteen years doing work in crafting, gaming legislation at the state level, opining on federal regulations, and crafting tribal regulations. So I'm here on behalf of myself. I don't represent anyone.

I spent some time living here and just gaming and doing it as Brandon saying responsibly and with care is really important to me. So I'm just here on my own. My comments do not reflect my firm or any of my clients on the Mainland. So just wanted to get that out. I have a handout that's not in my presentation, but I could only get five.

It is a summary of the economic benefits in Washington state. Okay. I don't know if we can share our Oh, j boots.

I don't know. Give it give it to JB please.

Okay.

And he'll distribute it.

Yeah. And I it's kind of big, but it shows the broader impact. And I'm actually not gonna talk about that today. I think there's enough data out there on the benefits and job creation, but I thought it was a really good summation of the impact of Indian gaming or governmental gaming in Washington, so it might be useful to have. Can I get to the next slide?

I don't know who's next sliding me. Who's Vanna Whiting from okay. Thank you. I already talked a bit about my back you know what Oh, thank you.

A bit about my background, but I also wanna be clear, like, I'm not here as an outsider to opine on whether you should or should not authorize gaming. That's for everyone here to decide and for the legislature to decide. But what I did want to do is offer, my experience in working with different models and maybe offer some clarity around Indian gaming and tribal gaming.

I think a lot of times there's an assumption that it's a monolith, like there's one model and I've worked with probably 37 to 40 different models because each tribe has their own model. So there's not just Vegas, there's hundreds of models to choose from.

And I wanted to share some of the lessons learned, over my years. I am gonna skip through pretty quickly, next slide, please. So the, the, the topics I'm gonna cover today are just just walking through at a very high level, what some of the different models are. So if the answer is yes, we want to do gaming. These are some of the models that are out there.

And then some of the ways that I've seen tribes who are either later to adopt or have, you know, refined their systems over the years, the way that they've really customized, their authorizing legislation, their regulations, so that they can become more adaptable and meet needs as they arise and work through some of those models or examples for you that will help answer some of the questions my friend Brandon got here. I do let's see. Okay. Next slide.

But like I said, I do not actually specialize in, what I'm gonna call state licensed gaming.

So I think the most prevalent model for the big gaming cities like, or states like Pennsylvania and Nevada is, okay, we're gonna authorize x number of licenses, and we're going to essentially auction them off to the highest bidder or some other system of choosing them. And then we're gonna tax it. And the tax revenue is gonna go to support the things that we hear about. Right? Like housing, education.

I would say this is the most known model. It might even be the most popular model. In my opinion, it doesn't mean it's the best model and it's up to you to decide. But I think there, there are some pros and cons to this because that whole model means the ownership structure is in private interests. So all of the profitability margins are going to go to for profit companies and what is left for the government is going to be the tax revenue.

And I'm, I've mostly included these slides on Pennsylvania and Maine to just give you guys the data to take back with you, but next slide. I guess the other piece I'll mention is most states when they do this, they, specifically set out how the tax revenue will be used. You see this a lot with lottery too. Right? Oh, x percent is gonna go to education.

Another percentage is gonna go to housing. Maybe 2% for problem responsible gaming. But that's all decided in the authorizing legislation tends to be the most popular model. So we saw that, next slide I'm gonna actually skip Pennsylvania because I think the population is quite a bit bigger, than here on the islands but I do think it's an inch if you want to come back and look at some of the data in terms of tax revenue, tax rate, I included that in the slide.

I think Maine is a more interesting example because the population is roughly similar with a population of 1,400,000 and they generated $129,000,000 in tax revenue in last year.

And you'll notice the tax rates are slightly different for each casino, and it and it and it's based off of the type of game and the number of machines that are put in each casino. So I'm putting this in here mostly so we can have a contrast once we get to governmental gaming. Alright. Next slide. And I've hinted at some of these already, but I think the big advantage of this model is it's the least amount of work for the government on the front end.

Right? Like you have to put the work into the legislation, but there's not a need for capital on the front end in order to build a facility or to set up the gaming that is all done by the for profit companies that come in and get the license. It's minimizes risk to the government on the front end. It's like, great. If you're successful, then we'll get some of the tax revenue and that's good for us.

I wanna highlight some of the cons that I've seen though in my practice. And I think we've seen some of this in Las Vegas, Montana, is that a lot of those profits get driven outside of the state because you have the tax revenue and whether that's 15% or 50%, you know, there's a lot of different tax rates across The United States. But the vast majority of the dollars that are being generated by gaming are going to the ownership group. So those are gone.

Those leave the state entirely, unless the ownership group is here.

And I've thought about this. I haven't seen it anywhere. I also do, work in cannabis as a highly regulated industry. And in Washington, we have a residency requirement. I've never seen that in gaming, but I just trying to, you know, think creatively here.

I think one of the biggest cons is that those dollars, most of them, the vast majority of those dollars leave the state. So you're really stuck with just the tax revenue coming back into the community to address some of the social ills. I also think it's the least adaptive framework. So a lot of times that's where you have a pretty comprehensive piece of legislation. Like I said, it

says, okay, the tax rate is whatever, let's go with 20%. That 20% is going to be set in according to this particular allocation. That does not allow flexibility or adaptability over time. And I think that stands in stark contrast with what we've seen in Indian gaming and tribal gaming where those can flex based off of the needs of the community. So I feel like it's frozen in time.

If you want to change it or refine it, you have to come back to the legislature to make a change. And so now I'm going to move on to the first type of governmental gaming and I'm going to call all of this whether it's like state owned, county owned, tribal owned, I'm going to broadly refer to it as governmental gaming which has fundamentally a different structure. So next slide please. I'm so used to beeping my own. This is an adjustment for me.

So I'm gonna say, so state gaming is where the state or a subsidiary, so this could be a city, it could be a county, some other form of municipality, is the ownership group of the casino. And so this means they are responsible for all of the hiring, the day to day operations. It also means they carry the burden of, you know, capitalizing the project on the front end to build the brick and mortar to do whatever you need to do.

But on the back end, all of the profits come back to the government to use. And so we talk about this a lot in Indian gaming. Gaming is our tax revenue. Right? It's what funds everything. We don't think of it as like for profits or our profit margins. We think of it as our tax revenue.

That is what funds everything else. I what I've seen in a lots of different types of governmental gaming, and I'll talk about it a bit more, is they do still often, particularly in the first few years, hire some assistance to you know, I we saw this in cannabis too. It was like, well, I don't know that we know anything about cannabis and how to run a cannabis business or we don't know anything about running a casino business.

So you do see in some of these state ownership models, over the years, they started with a management company to help them get up up and up and running. Next slide.

So the first example is Jake's 58, which is in Long Island, New York. And this was really in response to trying to curb the illicit market on on gambling was we need to have some form of regulated gambling. There's actually a good amount of, research and studies that show how if if customers have customers, citizens have a regulated option, they will choose that over the black market. Like, it feels safer. It feels like no one's gonna no bookies gonna come after you or your auntie.

And so when there is a regulated market, they're more likely to choose that. And that's what you saw in New York. Next slide. There's more information too about the the corporate governance structure. Jake's was financed with bonds in order to get the gaming, the hotel, the parking as it evolved beyond a racetrack.

And they had some some losses. Right? Like, I don't wanna paint this as, like, a perfect example. Like, they definitely had some lessons learned on the front end in terms of the type of gaming that was conducted. Right?

Like, racetracks maybe weren't the best bet, but once they were able to pivot to the casino resorts model, so a brick and mortar resort property, things turned around a bit. Next slide. And this is the slide I really wanted to focus on is just a comparison to Maine. So you'll notice this is in 2025, the total dollars going like, Jake's revenue that was generated was over $310,000,000 in revenues for a single property.

And you compare that in Maine where they had two properties and it was only 129,000,000.

So it was nearly double the amount that was coming back to the government on a single casino instead of two casinos. So there if the goal is to have job creation, have better health care, have better infrastructure for your citizens, I do think there's a greater opportunity when there's an element of governmental ownership. Next slide.

So in my opinion, for state owned gaming, I think the pros and cons are kind of the inverse of a state license system, where, you know, this the state or the municipality is going to assume a large amount of that risk and financial burden on the front end. That it's going to have to be financed likely through bonds, in order to get the casino built and running and off the ground.

But on the back end, you know, all of the profit margins come back to the government in the form of governmental revenue. As I mentioned before, I don't think it's really practical to do that with some without some sort of management arrangement. And you see this a lot in Indian country, right? It was like, well, we wanna because, you know, we've never done it before. So actually this concept of management agreements is very, very popular, in the tribal gaming industry.

And it's, you know, usually, like I said, for the first, I've seen as few as five, as many as 12, but somewhere there's, like, a kickoff period where a manager who has experience in gaming and they're getting a percentage of the profits, come in and help get the casino up and going before they transition management and operations over to the government. Okay. Next slide. Now to my favorite area, where I spend most of my time is tribal gaming or Indian gaming.

And I know folks, who are not from the continent are, like, can we say Indian?

And the answer is in a legal context, yes. Because it is a legal term of art. It definitely has some racist roots and some bias, but it is a legal term of art. So you'll hear me use the term in the I wouldn't go up to be like, oh, hey, Bree, you're a cool Indian. But, you know, like, I think if you're talking about Indian gaming as a whole, that's okay or a lot of people call it tribal gaming.

And what I really wanted to highlight is there's two really different models and they get confused and conflated a lot. So you'll see on the left, I'm actually going to start on the right because the right is the most popular form which is under the Indian gaming regulatory act or I'm going to call it IGRA gaming. So this is the federal statute that said federally recognized tribes can operate gaming on Indian lands and Indian lands is determined it's by the statute in a pretty limited way.

It's like they had to be under Indian jurisdiction or at a certain point in time, it's very complex. So it is limited to federally recognized tribes with eligible Indian lands.

And under that they can conduct different types of gaming. So class two is like a bingo class three is your true slots sports wagering, sports wagering, under the purview of a a compact, which is an agreement between the state and the tribe around how they're going to regulate the activity. And there's an overlap of state law and tribal law that intercedes. So I think that's the most common piece. I think for the purposes here of this work group, there's no IGRA gaming.

Right? Like that's not what we're talking about. I think the lessons learned are in that little tiny box on the left under tribal law and state law where, you know, outside of the IGRA model, you can still look to tribal law and state law of how they've set up the regulatory systems, how they have set up boards and committees to determine where the revenue goes, how they've set up boards and committees to address problem responsible gaming, that that's where there's potentially some lessons learned.

And then also a place where I can highlight there was some customization is gonna be on the left. And this is fairly recent.

Right? So for, I don't know, the first twenty years of Indian gaming, it was all under IGRA. And if it couldn't be done on Indian lands, it couldn't be done. And then there was state licensed gaming and they were totally separate. But this really interesting thing started to happen where state legislatures were like, we like the way tribes are doing it.

They are doing it in a really responsible way. They're taking care of their people, they're making sure infrastructure is getting developed as the handout points out. There's job creation, there's because there's construction, there's like an other, I guess let's say collateral positive impact of Indian gaming. And so what you started seeing in states like Arizona, Michigan, California, they're like we like the way tribes do it so much that we're gonna create an avenue for them to do it under state law alone.

So not under IGRA, but we're gonna just and so this means it's no longer limited to Indian lands.

It could if a state wanted to extend it to a state recognized tribe. There just became a lot more flexibility. And this was directly in response to the way that tribes had been doing it for the first fifteen or twenty years and how they saw they were doing it with more care and more responsibility. Next slide. I think I covered all of this.

Okay. I'm gonna move on to the next slide. Just the pros and cons of what I've seen. So one requirement of IGRA gaming is that the tribal government and its citizens are the primary beneficiaries of gaming on their lands. And this is required by federal law.

And I think in some ways that is what has informed the care and responsibility that was taken is because we had a big bad boogeyman in the national Indian gaming commission who could come in and say, you know, no, you outsider who wants to come in and manage, you can't take more than x percentage because then you're denying the tribe of having proprietary and sole interest over the gaming facility.

And I'll admit, I think in the nineties, maybe in the early two thousands, that worked, because tribes didn't have the economic or political power to fight back from some of those outside interests. But now I'm like, you paternalistic jerks over at the feds, you know, like, you don't need it anymore.

And so that's where I see lessons learned in Indian gaming is like, And so that's where I see lessons learned in Indian gaming is like, as, as the industry has evolved, and frankly, as the political and economic power of tribes have changed, you don't need some of that oversight. And I think that this is one of the cons like, I live and breathe Indian gaming, but it is too much. Like there's the tribal regulatory system, the state regulatory system, the federal regulatory system, it's too complex.

It makes it really hard for it to work. We try to lobby.

I'm also a registered lobbyist, but not here. Only in the state of Washington. But worked really hard to peel that back. And we've had some success in certain states of, like, how do we right size the gaming? And I think that's, for me, one of the most interesting pieces about tribal gaming is the tribe is wearing two hats, right?

So they are at once the regulator, and also the operator. So in a like Nevada model, a state license model, you're often competing, you have a competing interest, but when you're under like the form of government is wearing both hats, I find you get right sized regulation. So regulation that isn't so cumbersome that the business can't thrive anymore.

You see that happen in some gaming industries, but you also see the inverse where with enough money and enough lobbying power, you can sort of buy off the regulators. And so there's not enough regulation and there's the social ills run rampant.

And I think in some ways it has been that, symbiosis, if you will, that has, I think made tribal gaming so impactful that you could balance the positive economic gains, but also that you're able to manage, mitigate, prevent some of the social ills is because there's one party responsible for holding both. And I think that's what's unique about tribal gaming, but I also think, in my opinion, why it's been pretty effective in most places. There's some more stuff.

I tried to put lots of data in here. I'm sorry. I'm like a data person, but I'm not gonna, like, repeat it all out to you. But in terms of, like, job creation and all of that, just so you you have it, if you wanna come back to it.

Sorry. Can I ask a question?

No. Let her finish the presentation. Thank you.

Okay. Next slide. I'm just going through my slides. I'm not good at this next slide.

I covered most of this. Yep. Next slide. Okay. Let's give some examples.

So, this is one that was fairly new. I think I mentioned Arizona and Michigan, where they said, "You know what, tribes? You're doing such a good job we're going to give you priority over on the state-licensed side because we like the elements of governmental gaming." And so this was for sports betting, and the tax rate you'll see is actually quite low compared to what you see elsewhere.

And part of the reason for that is the tribes as the operators are getting some of that governmental revenue back and distributing it out in their communities. So, what we've seen in the last almost thirty years of Indian gaming is a decreased reliance on state benefits and federal benefits, like fewer people on food stamps, fewer people who need additional healthcare coverage from the state.

And so as part of that recognition, Arizona was like, we don't actually need as high of a tax rate because we know that the tribe as the operator is going to use the profits in a responsible way that's going to uplift community. Next slide. And Michigan, man, they went full throttle. So, what they did in Michigan was like online gaming, sports wagering, and it was the same thing. So, it was done outside of IGRA, but same principles apply.

It was like in recognition that tribes are good operators because they hold this dual responsibility as a regulator and an operator and to care for their community. And so in Michigan, you have IGRA-based gaming and state-licensed gaming all at the same time. And it's really fascinating from a jurisdictional perspective, but I thought it was another and it's actually a hybrid model. So, in addition to giving licenses to tribes, they also gave, I think it was two or three commercial licenses to non-Indian providers.

So, there's a way - I think this is a good example of customization.

Right? It was like, we don't just want in Indian IGRA gaming. We don't just want the state license model, but can we pick and choose what we've seen nationwide and craft something here in Michigan that's a little bit of all the pieces that you're working? So, you can, like, cherry pick, if you will; the pieces and came up with something, totally unique, and they're doing really well. The tax revenue is good.

I was recently talking to the former president of the Bay Mills tribe, and he's like, "We no longer have anyone on state government funded programs." Like, because of this legislation, everyone now is off of food stamps. They're out of their affordable housing, like, they're thriving. So it was very successful in Michigan.

I have my own thoughts about online gaming, they're probably similar to Brandon's, but I just have too many aunties that have an addiction problem, so I may be a bit more conservative than other people.

Alright, next slide. So, I've covered a lot of these, but just to say them and, you know, get them into the formal record, I think one of the the benefits of - this is supposed - the title is wrong. It should be of tribe - oh, no, it is - of tribal gaming is, again, you have the proceeds are staying local. Right?

All of the proceeds of these models come back to the state. They stay in the state. The only dollars that would leave are those that are going to some sort of outside manager or partner. Like, some of the tribes in Michigan are partnered with, like, DraftKings, FanDuel. So, they're getting a piece of the pie.

They're being paid for their expertise, but as a service provider, not as an owner of the operation, which I think is an important distinction. I think you've seen the social ills have actually been very well mitigated. I think it's harder to do it in lottery. I mean, the the studies are pretty clear in terms of lottery, sports betting, online gaming, the prevalence of addicted gambling goes up dramatically, at least compared to brick and mortar, but you've seen those managed pretty effectively.

I also, you know, just to share and tag on something you said, Brandon, one thing we see for in, just in Indian gaming in general, is the regulation is different.

So, if you go to a hotel in Vegas, they're gonna have signs everywhere. If you have a problem with gambling, call this number. But the training at our tribal facilities is fundamentally different. And it does vary tribe by tribe because they try to make it culturally specific. So they will be like, oh.

And I've had a a CEO come to me. He's like, "I saw your Auntie Nola. She keeps coming by. Can you I know she comes on Thursdays. Can you come next Thursday?"

"And we'll take her and we'll go get lunch." And that's what we did. And it wasn't like, "Hey, auntie, you have a problem, and we're gonna ship you off to some inpatient facility." But the way that they address addicted gambling behaviors or certain propensities or trends are fundamentally different. It is not checking boxes.

It is in their ICs. It's written in their protocols around what to do, and it's done in a culturally competent way. And I think the best kind of parallel I can give you is like, you know, you're driving around and you see these signs here, "Drive with Aloha." That works beautifully right here, that means something to someone, right? Like who lives here, that means something to them; you could not put that sign in Pennsylvania or Las Vegas, right?

Like it wouldn't have the same impact. And I think that's the same example of regulating from a place of cultural competency is when your regulator intimately knows the population and the communities, they can craft the signage, they can craft the protocols, they can craft the internal controls in a way that will actually speak to the population. And if they're in a situation where they need help, they can get help.

So, it actually increases the effectiveness of those pro programs, but you have to make sure your regulators and your operators are, in lockstep in how to implement some of those programs. Okay, next slide.

Okay, last one is one that's very unique, but is local government and nonprofit owned. And I searched high and low because I was like, could there be room for, like, nonprofit ownership, someplace? Does it work? And I found one which made me feel pretty excited actually, and it actually seems to be working. Next slide.

Again, I like data. And I was like, I think the proof is in the numbers. But, so in the in the nonprofit ownership example, they are the money from, like, the profits, if you will, are going to the ownership group. But because it's a nonprofit, it's not funding yachts or second homes, it is going back into the services that the nonprofit provides.

So, I feel like that's the closest parallel to maybe like what a tribal government might do, is you're not just sending out profits to shareholders, but instead it's staying within the purpose of the nonprofit and also creating tax revenue that goes back to the state for the state funded program.

So, I thought it was I I don't know a ton about it. I'll admit it, but I was searching for one and I found one, so wanted to, include it here. Next slide. I'm actually gonna skip to the next slide too. So, I feel like I've spoken so much, and I just want to thank you for having me here.

But just, again, speaking on behalf of myself, it's want to urge, like, I see so much thoughtfulness in this room, and I think that that's the right approach because I've seen it. I've seen tribal communities where they didn't get it right. They rushed and they just did the state license model, or they just rushed and copied and pasted what they saw somewhere else. And those communities are hurting. Those are people who have an increased prevalence of domestic violence, addicted gambling.

And so, and it's really hard. You can't like put the toothpaste back in the tube, right? And I see this whether you get it right or you get it wrong. And I see that in Washington state too. We came up with in Washington state, the motto is governmental gaming and nonprofit gaming.

There is no true for profit gambling in Washington state. It's only through nonprofit. And at one point, with some strong lobbying, they opened the door to restaurants to have card card rooms. And it was meant to be an amenity to, like, help increase the sales of cheeseburgers, but it has turned into something totally different. It's turned into these mini casinos that are everywhere where restaurants are. They're out in the local communities and you see increase in sex trafficking in those areas. You see an increase in crime, you see an increase in violence and murders. And so, but we can't undo it, right?

Like once you create that property interest in a license, it becomes very difficult for the state to take it back. And so I just, like, you guys are already doing this, but just want to say, like, it's so important to get it right. And there's a lot of great models and examples out there of how you can really craft something that is bespoke and custom and will will work for the people here.

And I think, you know, Brandon, to your point that if the money is going to come, make sure the money stays here to the greatest extent possible. Make sure the money is helping with job creation, health outcomes, all of those good things.

Sorry, Montana, but, like, don't become Montana. And so, I'll end you with that. And also just thank you so much for having me here today.

Thank you, Brie, for your presentation. We'll open it up for questions. Would you like to kick us off?

Sure. Thanks. So, I'm curious, you know, do you have any data because you have a lot of data here

Yes.

On how many or what the percentage of residents that go into the casinos, you know, compared to, like, visitors, you know, your auntie and -

Yeah, yeah, yeah.

The culture there was they would get you to take a to buy and check on existing behavior. And are there any models that restrict gambling to resident support? Like, you can't be a resident of the state and go into the gambling area, casino, whatever.

Yeah. I'll answer the first one first. As long as as far as I know not in The United States, but there are elsewhere internationally. On the second one, I think that percentage varies and how you control that is where locations are permitted. So, I'm going to use an example in Washington, I won't say which tribe, but they have two facilities.

So, they have one facility that's in a larger metropolitan area where it is the vast majority are meant to capture tourists, people who do not live there, they're not members of the community, and that was part of the goal by employing people who live in the area and it is much bigger. The number of machines, the type of games that were allowed were there because they knew the risk of creating further addiction in their community was lower.

Conversely, they cited a second facility that was closer to, where most of the tribal citizens lived and were really cautious about what that impact would be in the community. So, it's a much smaller property. There's not a hotel.

You cannot stay multiple days. The number of machines, the type of machines, and frankly, the payout, like, you can't control how much comes back. It's all it's all tinkered precisely based off of the target, patron demographic.

Alright. Any other questions?

I appreciate your, yeah, presentation. You know, you highlighted that many tribal gaming frameworks were designed so the communities most impacted by gaming also have a leadership role in its governance and benefit from its success. Looking beyond IGRA itself, are there aspects of those models that Hawaii should consider when it comes to native wine participation, leadership, empowerment, community benefit?

I think so. Absolutely. And I think it starts with what's in your legislation. There's gonna I what I've seen is there's a temptation to say this number of licenses, this tax rate, here's where the tax revenue goes. And I would urge something that it allows a lot more adaptability over time, which is creating, probably multiple commissions, like a regulatory commission.

If you're gonna go with some form of governmental gaming, you'll want an operations commission. And then you have requirements for who can sit on those various commissions and make important decisions around how money is used. I mean, even sometimes at an operational level. And again, I know I'm I'm biased, but I really love the governmental model because in COVID, you saw things where these boards were making decisions that were what was best for the community, but not what was best for the bottom line.

It was we're gonna keep paying people, but we don't want them to come in because we don't want anyone to get sick, but we also know they need a paycheck.

I also do some work for, non-governmental clients and it was the opposite. It was how can we fire all these people immediately so that we can still distribute profits to our shareholders. Right? Like, it was very COVID was a really interesting example. And I think part of that all came down to who were the boards.

And so if you're in a governmental model, that board can be set by state law what the requirements are. But, I think Tyler and I've had this conversation. I am a proponent of skinny legislation because if you try to put too much into it, you mess up and you have to come back and correct it. And you see this in states where it was done by initiative of the people instead of by legislation.

And so, I think the smarter, more sophisticated approach is to get the right people that you have confidence can make these decisions day to day, and it can adapt over time.

It might be on the front end, you let your, our priority is healthcare. And then once everyone's feeling like it's pretty good, you might be like, you know what, we need more infrastructure. And so, have that ability to pivot and move with the needs of the community, the needs of the state. I would, again, I'm biased a little bit, but I think you want that, that nimbleness in how on both the operation side and on the regulatory side.

And I think that's where you could have space to say certain members of these boards or commissions are designated to - I think you could have a residency requirement that has we weren't sure how that was gonna play on Washington on cannabis, but it worked.

It held up against multiple constitutional challenges.

I have one. Question: throughout this process, we've heard a lot about existing models from other jurisdictions. For a place like Hawaii, what factors should policy makers, be considering when determining whether an existing model should be adopted versus developing an approach uniquely suited for Hawaii?

Again, I'm biased. I already showed my cards. I think you need to build something unique. Just the population of this state is so special and so unique that you want... I lived here for a couple years. I was the only place that felt like home.

I was like, this feels like a village, and people look out for one another. And so I just don't think taking an example from Pennsylvania or Las Vegas is going to work for the - I don't know; this is your call, but just my gut is you want to custom build something, and I think they can still be tested components. Right?

If you're taking component a from Tulalip, you're taking component C from, I don't know, Choctaw, and D from Maine or from E from, you know, the Jake's 58 in New York. Those individual components can be tested and proven, and you're just building them.

And you have to have a really good drafter. Someone I call it drafting under duress. Like, I've been in rooms where I had we have 29 tribes in Washington, and all the chairs were yelling at me what they wanted and with each other. And I was like, I'm just drafting under duress now. Like, and if I can't pick one because then I'm prioritizing one tribe.

So, you need to have someone who can hold the nuance and make sure it's captured in the legislation itself.

Okay. Great.

Let's go to Zoom. Zoom, is there any, questions? Alright. No questions on Zoom. Let's get back here. Go ahead.

When you have the decision making at, say, a board or commission level, instead of, at the legislature level, The ledge is accountable to the people, to the voters each time there's an election. What mechanisms would you have for holding these boards or commissions accountable, appointing these accountable?

Yeah. I think we can I'll just use some examples I see most often. I'm gonna start on the regulatory side. So, on the regulatory side, you wanna be very thoughtful in how you're crafting what their authority is. Right?

So, where I see is they're like, oh, shoot, we have to go back to the legislature; so any, you know, major gaming decisions would have to come back to the legislature, but what powers and authorities are being granted to the commission can be very specific, very, very thoughtfully crafted. And there's really good examples out there. Honestly, that is a place where you could probably do some copying and pasting.

But I've also seen in some jurisdictions where they have annual reports, or sometimes it's every other year back to the legislature where there's the ability to ask questions or do reporting.

You can even build in, almost like expiration clauses. So, like, you get this power for three years, and then we're gonna decide if it's working or if we wanna take it back. So, there's a lot of room on that on that side. I think on the operational side, what I would recommend is there's requirements for certain policies, internal controls, and I see this a lot on the tribal side.

So, the federal regulations are at a very high level, the guardrails, if you will, of what has to be considered.

And then as you get to the state level and the tribal level, it's much more particularized, but it also means it's more nimble. So, you don't have to come back to the legislature. But there's usually some sort of approval mechanism that rests in that board to be like, no, no, your internal controls, your policies and procedures actually comply with the minimum requirements that are listed. In this case, it would be in the legislation.

Thank you.

Alright. Would you like to?

I'll be brief. In other jurisdictions, and you've seen many of them, do they not allow people on government assistance to go into the casinos because they're on government assistance?

Yes. A hot topic. So, there was questions around government assistant cards could be used, and the answer was no. So, if you're on government assistance, at least, you know, in Washington state, as my example, you can still come, but you cannot, like, use your food stamp card to buy food at the casino. And honestly, it was kind of a tough issue, I think, for especially those casinos that were located in more rural communities.

Like my tribe is out on the peninsula of Washington, and a lot of times that actually is the closest place to get like, we have babies who drink Gatorade out of bottles because there's not fresh like, there's a lot of food problems, in more rural areas.

And so I think that was actually of the debate is like, well, we don't want you gambling, but could you come here and still get a hot meal that might include vegetables or milk instead of getting Gatorade from the gas station? So I think it's been, a topic that's definitely been debated in a lot of different places.

And I think a lot of those considerations depend on where you're citing, like if you're citing a brick and mortar and it's in a place where there's abundance of other options for food, then I do think it would be appropriate and prudent. And frankly, I think under the federal law now, you have to you have to ban the use of, at least SNAP benefits.

Thank you.

Are there any state recognized tribes? Oh, to be clear, Brig and I have known each other since law school.

It's true.

Very, very far back. So, I'm not asking a question on the answers to it. It just occurred to me. Are there any state recognized tribes who run operations?

No. It's a good question. I wonder not on the West Coast, but I wonder if maybe on the East Coast. So, East Coast, just because of the way the lands were taken, their history is really different. There was more they were defeated.

So, under the Marshall trilogy, they just took all their land, and that's where you've seen a lot of state recognition come back. We don't have as many state recognized tribes on the West Coast because the colonizers got there later, and so we had treaties. And so, I think it's possible. Like, I think if I was gonna look, I'd probably look in, like, North Carolina, Florida, the Eastern border. I do think you could, though.

I think you could have a state-recognized tribe, and they could operate pursuance to state law.

I just asked that because, you know, your question about what do we put in the report that eligibility, you know, if it is an entity based around a political group, like Native Hawaiians, how do you create eligibility? We did we the state recognition bill passed, what, like, ten years ago? It's been a while. . So, I think we have a a method there. That may not be what the this group wants to say is, but I'm just trying to think of other than using, say, the OLAW registry or the DHL list because both are limited. You could create a role under the state-recognized entity, but I have to go back and look at what that legislation was. So...

Well, I'll you know I'm gonna go research it after this. I just can't help myself find out if there is one, so I'll let you know.

Alright. Any other questions?

I have a comment.

Okay. Go ahead, please.

So - I'm glad you brought that up because when Oscar and Joe did the report to the committee, the question was asked if members have input on what they wanna see. Because, you know, we have four months probably before we start tabulating a report. And in that time, we'll only have three or four meetings. So, if you have questions and concerns, it's easier for us to get the information as you get it and as soon as possible so they can start formulating the report.

So, I just wanted to make sure that the members knew online and in this room that whatever it is that the members feel need to be included, please let us know so they can start putting the pieces together. Thank you, Chair.

Brie, I have some questions for you. I really enjoyed your presentation, and it got my brain going in whole different directions. So, let's just start with what's important for me.

I've been trying to ensure that we have legislation that benefits our state since, what, Utah and us are the only ones who don't have gaming legislation. So, I thought of three revenue generator just to ensure the cash flow is coming into our state. So the first one, it's harder with brick and mortar, but when we look at sports betting, it's kinda an ideal spot for it. Are you familiar with the GET here in our state? Okay. So are you familiar with sales tax?

Yes.

Okay. So we -

Too much so, but yes.

Okay. So, it's not a sales tax, but it's very similar.

Okay.

It's on gross, on your business. Okay. So, your tax, a certain percentage on your gross. I saw in your presentation adjusted gross, and those adjusted gross to me can be manipulated.

So, whether or not the percentage is 10% or 20%, if you manipulate it to a point where it the pot is smaller and smaller, I think the percentage doesn't really matter if it's high. However, just like our GET, if the business grows to a 1,000,000 to 10,000,000 or a billion dollar industry, we're taxing that amount. So, I wanna figure out a way where gaming industries are GET, that that's going to the general fund.

And just like your skinny legislation, I love that word, by the way.

I love the fact that our government needs to be adaptable on the issues that presents itself every year, and that allows us to have that adaptability. So, that's the first thing. What's your thoughts about that?

Oh, a 100% you're correct. It's manipulated. And I think that would be one where I would probably ask AI or an associate to be like, go find the definition, because we also we call it a business and occupation tax, but it's the same thing, a B&O tax. I think there's actually also good parallels in Indian country around how IGRA defines net revenue, so it's net, not gross.

But looking at what is carved out or specifically included, that would be a place where I would say a 49 state survey is warranted.

Like, what are we seeing elsewhere? And then I would have a second, role of, like, what are they collecting based off of their population and number of properties because it's it's huge. And if you don't get that right, you just won't see the tax revenue.

I'm not sure if you've been following, but I think Chicago has a variation. It's a flat rate that they put in a flat fee.

Okay.

I think it's, like, 50¢ per bets that they -

Oh, interesting.

They put in. Yeah. Take a look at that.

I will. Yeah.

But it would be a flat percentage rate here in Hawaii. All our businesses pay GET. It's a common practice here in our state. Gaming should also have that. So, that's one.

Second is I think we should have a max tax withholding on winnings. So, let's say someone from Germany comes here, wins $500. We, the casino, or whatever establishment does a max withholding on that winnings. So, if they go to back to Germany, they have to file income tax here to collect the remaining withholding. Otherwise, if they don't, then we keep it in our state, and that money can go into community benefits.

Yep.

Yeah. What's your thoughts about that?

I like it, and I haven't seen that precise issue. I think you guys probably are gonna have more international patrons than others. But this concept of sort of unclaimed prizes going back into specific pots of money is very common and amazing. Like, it funds - I mean, I've seen some that go back into the general fund. I've some seen some that go specifically to education, but it's a tested concept that has worked well in other jurisdictions.

So that's the tax withholding on the winnings. The second is unclaimed property. You kinda dabbed into that. And that is, let's say if someone from Poland now is coming here and they win $5 and they just don't wanna reclaim it. So, that unclaimed property or that winnings of $5, if it's not claimed within a year, then it would go to the general fund.

That would go also for community benefits. What what's your thoughts about that?

I love it. I am like gaming should benefit - I'm okay. If people wanna make money, go for it. That's great.

But I think the vast majority of the benefits should come back to the people, that have the highest risk of being harmed by it.

And I think Nevada has unclaimed statutes

That has been tested and proven. And like you said, we can take a component and then make it into a model that customize and fits Hawaii perfectly. Yep. And I also am, a total agreement that we need to have some flexibility. One so the last question I'll ask is so once we give out these licensees, depending on how long these license are for, let's say ten years, then we're bound by that contract.

Yeah.

Is there any sort of established best practices where the license is only granted for a year? And then after several renews, it could be up to ten years. So, that way, in the beginning of our establishment on gaming, we're not locked in for ten years, and we can't fix that because lawsuits because we're already locked in. We can't go back and renege. However, can we give out a license only for a year so we work out the kinks?

And then maybe after two renewals, you can have a ten year extension. Have you ever seen that kind of plan? I just kinda thought of it.

I haven't seen that - I like the, it's like, creative thinking is the best solution when it comes to gaming. But I think the problem with that, at least in a brick and mortar context, is you're not gonna have, at least in my opinion, licensees who are willing to fund the development of a brick and mortar, which in most cases now is, like, at least 300,000,000, but probably 6 or 700,000,000.

Bank and investment industry take into consideration that there is a long term process for that if there is a plan in place to accomplish that long term?

I mean, mayb:; that's not been my experience. When we go talk to to the banks to open new facilities for tribes. It is painful. And it is they want assurances, like that becomes my job is to go get assurances from the state and the NIGC and everyone's mother and brother that this thing is actually going to happen. And frankly, depending on the, you know, projected profitability of it, it's going to take a couple of years for that entity to recoup their investment.

And so I just, I don't - I mean, you if you handed out one-year licenses, maybe someone who just has some money to burn would do it, but I don't think so.

I think people want to know that their investment is stable. I think what is most common, and it might even be everywhere, I'd have to go check it, is your licenses forever. And I think that's part of, you can't put the toothpaste back in the tube. Right? Once people make that substantial capital investment on the front end, they wanna know that's that's the that's the juice that makes the squeeze worth it is that that's gonna continue to pay for decades.

But I think that's also the predicament of, you know, once those are out, they become a property right. And I am not familiar with your state constitution, but under most state constitutions, you cannot take that property right without just compensation. So, I guess that would be an option. You could be like, "We're gonna take your license and we're gonna pay you fair market value for the investment that you've made."

I've never seen it happen, but I think from tracking the law, that would be what is required. So, I guess my sense and what I've seen nationwide is once that license is handed out to that entity, unless they choose to sell it or transfer it, they have certain vested rights in it that will be really hard to undo.

Okay. Well, Britney, thank you for your presentation. Let's give her a round of applause. Members, we are done with presentations and questions and answer. This working group is now adjourned.