Tourism and Gaming Working Group

Hi, Aloha, and welcome to the tourism and gaming working group today. Today is Thursday, 07/02/2026, and this is our 1PM agenda. We're in Conference Room 2 To 9. This information briefing is being streamed live on YouTube. Please note that we are taking no testimony at this time.

And let's go ahead and have the committee introduce themselves. I'll start from left to right, Brandon.

Hello, Brandon. Maka'ava'ava, nation of Hawaii.

Hi. I'm Ken Caputo with the Marnell Companies.

Hi, Senator DeCoite, co chairing the working gaming group.

Hi. Stanford Carr with Aloha Aloha District Partners.

Hey. Paul Anderson with Boyd Gaming.

And on Zoom.

I'm I'm Jim Dylan, d o h, Dothmanalo. And and Michael Pollock, Spectrum Gaming Group.

And then aloha.

I'm Louis Hoccoana, University of Hawaii.

Dane Wicker, deputy director at DBEDT, attending on behalf of director Toyoka.

Hello. Tyler Gomes, Hawaiian Council.

Gary Suganuma with Department of Taxation.

Anybody else on Zoom?

Hi. It's Alan Feldman with the International Gaming Institute at UNLV.

Hi, Alan. Okay. I I guess Alan was the last individual on there. Okay. So let's let's move on.

Of course, we have the agenda set for today. The first presentation and only presentation we have is fifty years of gaming lessons. This is for the fiftieth state. Joining us on Zoom is Michael Pollock, senior policy adviser at Spectrum Gaming Group. Michael Michael Pollock serves as a senior policy advisor after more than twenty years as managing director of Spectrum Gaming Group, where he oversaw economic impact and feasibility studies for government and private sector clients worldwide, including projects in Cyprus, Spain, Greece, Guam, and Korea.

He also serves as the executive director of the National Council of Legislators from gaming state NCLGS. A nationally recognized expert in gaming policy, Polak has led groundbreaking research on lotteries, gaming sports, gaming sports betting, tax policy and regulation. He began analyzing the casino industry in 1978 and served as a spokesman for the New Jersey casino control commission from 1991 to 1996.

Helping maintaining public confidence during a period of regulatory change, Pollock is the author of the award winning book, Hostage to Fortune, Atlantic City and casino gambling and founded the east coast gaming Congress. He also created spectrum spectrum tricks, the successor to the award winning gaming industry observer newsletter.

He has testified before legislative bodies ranging from Brazil chamber theft chamber, commerce deputies to the US senate select committee on Indian gaming and has spoken at gaming conferences around the world. He also served

the world. He also served

as an expert witness in faculty of New York University, Rutgers University, and Stockton University, Pollock has received 20 journalism awards and is frequently cited by major media outlets, including the New York Times, The Wall Street Journal, CNN, BBC, ABC News, MSNBC, and NPR. So without further ado, I'd like to introduce Michael Pola. But just before I do that, I wanna introduce also co Chair joining me, representative Gregor Elodat. So let's I I know we only have an hour and a half off.

So I I wanna just get started, Michael, with your presentation.

So

Yeah.

Go go right ahead. Thank you.

Well, Aloha. Thank you. Thank you for the privilege of addressing this working group. The very existence of this group, I would suggest, demonstrates that Hawaii intends to get it right. Now I that was a wonderful introduction.

I could save a lot of time now. But I do wanna point out that I've been around since the beginning of the modern gaming era, and what we have learned and what we did not know has been astounding. By by one example, for we look at pathological gambling, what was then called compulsive gambling. And the way it was addressed back in the early days was you would have a slogan on each slot machine at table game saying, bet with your head, not over it.

And that was the beginning and end of the responsibility.

Obviously, we've come a long way. My favorite title, though, is policy wonk, capital w on that. Gaming policy has been the central focus of my entire career. And Spectrum I I wanna point out that many of you are familiar with Spectrum. We've been around a long time, but Spectrum is the the last bullet point in bold.

Spectrum is neither pro gaming nor anti gaming. That's a critical point. Now this slide gives a basic summary of essentially a century of gaming's history. Nevada was the first state to offer casinos, doing it in the depths of the Great Depression in 1931, and not until 1976. Fifty years ago from this very year was there a competitor, and that was New Jersey.

And that was New Jersey's second effort. A '74 referendum failed. A '76 referendum passed to authorize casinos in Atlantic City. And many of you know Atlantic City, the inspiration for the board game Monopoly. It had hosted the nineteen sixty four Democratic National Convention shortly after JFK's assassination.

And within a dozen years, Atlantic City entered its own Great Depression. It was arguably the poorest city of The United States in The United States. It rolled the dice effectively. And that unprecedented experiment

a focus on integrity has led to incredible national expansion. And that expansion offers numerous lessons for Hawaii in what to do and what to avoid when considering gaming as public policy. Most important, starting with you get one chance to get it right. When you're a pioneer with no precedent to guide you, mistakes can occur, and New Jersey made several. Most notably, I would suggest that lawmakers thought their work was done, was completed following the passage of governing legislation, the New Jersey Decent Control Act.

with

They learned the hard way. What happened was the already solid suburbs of Atlantic City flourished while the city center did not. So more work needed to be done and more policies needed to be developed and implemented. So the issues to be addressed, there's there's numerous starting points. Obviously, the number and location of licensed casinos, the tax rate, the capital investment requirements, and the comprehensive licensure process, which is central. Now The

hold on. Let me get my to my oh, I missed I hope

I didn't miss this page here. Here it is. Okay. You have one chance to get it right. Gaming is not gonna solve every problem or meet every challenge.

The work of legislators, policymakers does not end, and authorization is not the beginning. It's the starting point. So the issues have to include the the research I mentioned before. And it it works best when you keep your goals realistic. You have your an existing tourism infrastructure, which obviously you have in better than better than almost any other set I could think of.

The local communities are supportive, and the focus starts with brick and mortar casinos because that's where the policies get implemented. And that policies can be anything from employment and tourism growth to attracting additional capital investment. So the licensure process has to be there's no there's no way around this. It has to be comprehensive and effective.

Notably, the applicants have the burden of proof to to demonstrate that they meet the state's requirements and regulators are given the flexibility, the necessary flexibility to, address challenges that some are expected, but you can there's gonna be a lot that you never anticipated.

The principles start with number one. A gaming license is a privilege. No one has a right to it. New Jersey made this clearer from the outset that a number of companies in Nevada who are operating for years did not meet the test. So the applicants had to demonstrate that they meet the standards of good character, honesty, and integrity.

That's a mantra that was repeated in every gaming state that takes it seriously, which is frankly all of them. And, the applicants demonstrate that they possess the wherewithal to meet the state's policy goals. Whatever those goals might be, and usually involve capital investment and things along those lines. And that they have demonstrated that they can prioritize the principles of socially responsible gaming. So the application process.

You start with a competitive process and you set the clear requirements in advance that applicants have to demonstrate they have both gaming and non gaming growth strategies that they will and have demonstrated the experience of working with local businesses that they can leverage Hawaii's existing assets while enhancing them and investing significant capital.

That's three two.

Now, obviously, I don't have to go I have to tell you the the Hawaii's existing assets are awesome. And no state that I can think of has that's consider has considered gaming or offered gaming starts from such a a a terrific point. You've got the Hawaii brand, the culture, the the transportation assets, the global reach, the natural attractions, and a tourism infrastructure that's without parallel.

So the realistic goals that they that applicants can meet or exceed, frankly, the number of visits from existing markets, grow the existing markets, extend the length of stay.

And while identifying and developing new markets, it also requires absolutely essential growing the conventions and meetings business and creating incentives for US gaming visitors in the 30 plus states that now offer casinos, creating incentives that applicants have the ability to get them to their gambling in whatever state that they know they can earn points and get get offers to come visit and redeem those points and spend some quality time in Hawaii.

Something that I know from experience, they will want. So interestingly, I know there's some people from the the tax office on this, which is very welcome because that is a critical point. And one thing I've learned it's interesting. New Jersey was the first state outside Nevada to offer casinos. And New Jersey offered a rate of 8%.

It's so incredibly low at this point. But why was why did they offer 8%? Because in 1976, that was the highest in the country. It was two points higher roughly two points higher than Nevada's. And subsequently, almost every state that has offered casinos has come in with the political idea that in order to get this through, they have

to come up with

the highest rate on gross gaming revenue, that every state was higher than previous states. And, politically, that they're thinking that the highest rate's most easily achievable, but it is not the most effective. One of my favorite anecdotes, I testified before a gaming committee in Maryland when Maryland was considering casinos, and it had an application process in place for they they had a total a grand total of four applicants for five potential licenses.

And the Chair of the Committee asked me, what can we do to and they had a they had to follow that principle, and they had a tax rate of about 64% at that time. And the the Chair of the Committee asked me, what should we do to generate more interest in our licenses?

And my answer was, well, the first thing I would do is lower that tax rate. Then there was silence. And he looked at me and said, what's the second thing you do? Okay. The rate should be established.

I I it's often on political principles, but if you establish on economic principles, what rates will attract the greatest capital investment and growth both gaming and non gaming revenue streams, both of which generate their own fiscals benefits and have their own tax streams. So what are the building blocks of effective gaming policy? You've got to create an attractive option for domestic and international visitors.

You've got to have a comprehensive plans that the local businesses and the existing attractions, the ability to to reach gaming customers because there are a lot of them, and never comp never compromise on licensing standards or gaming integrity and learn from gaming pioneers. And notably, for example, there there's been over over the years, many examples of states and communities that just didn't quite understand what they were trying to do or could do.

Gaming communities like Gary, Indiana or a Chester, Pennsylvania, wonderful places. They they, seen us there are are great employers, but they're never gonna create a tourist attraction. It's never gonna be a tourist destination. They have to learn what mistakes they've made and what mistakes to what mistakes you can avoid and what what are the good things that they have done that you can endeavor to emulate. But the the ultimate goal is is generating a greater return on investment.

That is the that is the that is a shared goal for the state, local communities, and the operators, the licensees. And with that, that that's my presentation.

Mike, Michael, thank you. With that, we're gonna go to, the committee, with questions and I'm gonna start from left to right. And, sorry, Michelle. I know you just walked in. Michelle, can you introduce yourself and who you represent as well?

I'm Michelle Puhu from the Attorney General's Office. My apologies. My agenda said Room 329. I was trying to get into 329 with no luck.

Sorry about that. Michelle, you wanna start with, any questions for our speaker today? Or are you

on a In looking at your your PowerPoint, I I didn't see anything relating to law enforcement. And, obviously, my concern is crime. Certainly. Would you to address those areas of concern?

No. No. It's a it's a it's a great question. And I I use the just the the overall art the overarching term of regulation to include law enforcement. Because in in most states, New Jersey, for example, the division of gaming enforcement, which is the primary, regulatory agency along with the casino control commission does the licensing.

But the division of gaming enforcement is in the division Department of Law and Public Safety under the aegis of the attorney general.

And that is something that that has to be addressed at the local and the state level because it is an ongoing concern, and it is something that has to be addressed, whether it's whether it's street crime where local law enforcement has to have the ability to take on the additional challenges that are gonna come forth or whether it's white collar crime in other areas that that have to be addressed through and and that ties into problem gambling and and and a lot of other areas.

But, no, the budget for law enforcement is critical, and that is part and parcel of the regulatory process, certainly at the state level. But local law enforcement is they're going to have when you get more visitors and you get more traffic and and so forth, you're going to have more challenges. And, again, I know from experience the the challenges that New Jersey did not think about at the time and learned the hard way what to address.

Some some amazing tales that I could tell you from those days, but you learn and you can learn from from those states. But the critical point is that local and and state law enforcement has to be given the budget to meet the challenge.

Thank you, sir. As a New

York Giants fan, I've spent quite a bit of time in New Jersey.

Oh, no.

Michelle, any any follow-up to? No, sir. Thank you. Okay. Thank you.

Brandy.

Hey. Thank you, Michael, for your presentation. You know, as you've watched gaming evolve over the past fifty years, how important have community participation, native Hawaiian leadership and local ownership been to the long term success and legitimacy of grain gaming framework? Sorry. I threw in the native Hawaiian leadership part.

But, yeah. How is that yeah. What does that mean for as far as gaming frameworks?

Well, when you say local ownership, are you mean, like, the actual ownership interest within the gaming properties, or you told me to Yeah. That that's gonna vary. In most commute most states that I'm aware of, that I'm familiar with, certainly in the commercial side, not the tribal gaming side. On the commercial side, those are are the the national the global companies that have the experience that really are are public companies for the most part that trade on the on stock exchanges and so forth.

I'm not that familiar with examples in which a there's actual local ownership of it because it's it's a very capital to do it right, it's a very capital intensive industry.

And it's gonna take significant amounts of capital, and that usually comes from, well financed public companies.

Right. Yeah. Well, I I you know, I mean, if you bring in, like,

a But company. Yeah. I was just gonna say that ownership ownership in its broader sense means that those companies and those properties are going to work with local businesses. And those local businesses and they could be b to c businesses that deal with with with the growing visitor base, and it could be b to b businesses that that actually sell goods and services to the casinos. And that's where I think the local ownership has a a, a greater opportunity to play a role.

Right. And that's significant, frankly.

Okay.

I have one more.

Yeah. Go go ahead. I figured you had a follow-up call. I would've followed up with you on that one too. That's good, but

You know, Michael, one of the things we've studied as a nation is tourism focused gaming. Jurisdictions such as Singapore, Japan, and UAE. What insights can you share about how tourism for strategies have shaped those gaming markets compared to jurisdictions where gaming has been pursued primarily as a source of government revenue?

Well, that's an interesting question because, if if those you mentioned Singapore, for example, and and done significant work in Singapore and Macau and so forth. And what those destinations have is they have an existing tourism infrastructure. They didn't try to build a tourism infrastructure from scratch. And when you talk about the goal of just generating in the absence of a tourism infrastructure, you're gonna be effectively dealing with a local market. And you mentioned, fiscal growth and creating fiscal revenue streams.

And I would respectfully suggest that you're you've got a significant advantage because you'll be building on top of a tourism an existing robust tourism infrastructure. And that is going to that that is the secret, the not so secret secret to the most robust fiscal stream. That's gonna get you the the tax stream going forward. Not without a focus on tourism, you that's you you cannot have an effective focus on fiscal growth.

Yeah. Thank you, Michael.

K.

Thank you. Michael, great presentation. And I think one thing that's been very consistent over the prior months of testimony from experts has been the, let's get it right. Right? Do it right here in Hawaii, and there's a lot to learn from what's happened in other jurisdictions.

One thing I'm trying to come to some closure on as we move on to kind of the next level of this panel of moving from taking in information to starting to figure out what does a report wanna look like, what does potential legislation look like, is are there different formats that can live in a compatible way within a broader model? Right?

For instance, can we look at tribal gaming and take maybe cherry pick from there and look at the possibility of some level of government or government entity owned gaming and work alongside private sector gaming? Can there be more than one format within a broader model in the best interest of the state to not only maximize revenue, but also think about how you partner with the native Hawaiian community, how you look at broader tourism community here and have a rising tide lift all boats.

So from a regulatory or a model framework, how do you do that?

Maybe there's one that is a private sector. There's one that's government owned and works in some other way of partnering or otherwise to do the right mix that these two legislative leaders can really look at in a broader best interest of the state, best interest of Hawaiians type of model. I I wonder if you could talk about that and how those might be different ways but are compatible overall.

Wait. Hawaii is in an incredibly enviable position in that you have a vast number of models to look at and to and to choose from. But I suggested the process has to begin with with with a with

a blank slate. Identify the goals specifically. And those goals could be employment, tourism growth, targeting certain communities, certain neighborhoods, certain islands that that may need something more than than others and identify those goals and then look at what is the best regulatory ownership financial structure to meet those goals. You raise some interesting points, and there's gonna be upside and downside to to any of those models. For example, the question and it's an open question.

Will you be able to get the most, the greatest amount of capital investment in a ownership structure in which the state is a partner or or not? And what the what if they're not a partner, what's what is their role? What is their tax rate going to be? These are open questions, but start with identifying the very specific goals and then identify the ownership structure or structures because you might have more than one option that can best meet those goals.

Thank you.

Do you

have a follow-up? K. Any follow-up?

No. I'm good.

Thank you. Thank you. Stanford?

No question. That was

what I

was looking for. What's the format? What's the best ideal format and structure? Still struggling with that.

My turn. Yeah. Michael, thanks for the presentation. It's it's good to hear from you. As I think through this, I I've tried to sort of figure out what the lens is that we should be looking at.

And I think you touched on a few, Ken touched on a few and Brandon as well. And some of them are competing, right? So in one lane you have, we need to maximize the benefit for Hawaii. We have to protect consumers and on top of that we need to protect and amplify their reputation and the culture of Hawaii. Yep.

And sometimes those three lanes can compete with each other depending upon what you're looking at. And that could be that to maximize the benefit you have gaming everywhere but that doesn't protect consumers or that doesn't protect reputation, right? So that's what I mean by maybe they can compete or be contrary. On the island, you have also some fairly big obstacles outside of say Honolulu or Oahu.

You have a much smaller population so you have a relatively small market in relative to maybe other markets where you don't have big freeways and highways driving by your cities and it's not easily connected.

And then you have extremely expensive development costs. So factoring those in, speak to In those lenses, how do you figure out, and this is, I guess goes to Ken's question, how many licenses make sense? What should the tax rate be to incentivize the amount of capital that's gonna be required to develop out what is gonna maximize the benefit? And I have a follow-up to that from the suitability regulatory side, but maybe you could touch on those first. That was a really long question.

I apologize and

That's alright. Circle. What's interesting, you began with talking about these potential goals that might conflict with each other. My first point would be if your goals are in conflict with each other, you've got to you've gotta address that from the outset. They can't conflict with each other.

You have to establish very clear, goals that are are you that you the the public sector has bought into and that the private sector will buy into.

And the other issues that you you addressed, whether it's the tax rate, the number of casinos, that has to be as to go back to my earlier point, if you start with the notion as to what your your policies are, what your your your specific goals are, and then take that from there as to how how to advance those goals, that's gonna address the issue.

That that will certainly help address the issue as to where the casinos should be, what the minimum capital investment should be, and what the tax rate should be. And the minimum capital investment, which you wanna obviously exceed the minimum, but you set you set a a baseline, that is tied to the tax rate. And you can you don't have to, but you certainly can.

Tax rates don't necessarily have to be fixed. You can have a tax rate that an operator can say, at a certain percentage, they can build a lot more at a lower tax rate, they can and would build a lot more than you would at a higher tax rate if they can demonstrate that by doing so, they're going to generate both gaming and nongaming revenue growth, employ more people, build more, and advance the interest of of local businesses.

So you put the burden on the applicants in that instance to to, they're the ones who have to advance those particular goals once you set the clear policy in place. Do you do you have

an example of a of a clear policy you think would apply to Hawaii?

I think the well, I think the I I would suggest I put it in a way that these are the issues that you have to address. I don't wanna sit here and say what your policies should be. I think we've talked about what the the baselines are that have to be focused on, including the inviolable focus on integrity and so forth. And I I think the policies have to focus on it's gonna vary from the location.

I think in Oahu, it might be more of of an urban development issue.

In other islands, it it might be just more a tourism growth. You you're gonna have multiple issues, and it's it's it's something that a working group and their consultants have to really identify and and delineate. I hope that answers your question. It's a it's a it's a good question. It's a tough one because it's hard I'm trying to avoid answering these questions at the outset because these are questions that really require some significant homework.

Yeah. And I and I think you heard it in a couple of questions here where, you know, we're trying to get to those answers. And and through these meetings, we've heard a lot of these are the questions you should be asking. I think we've got a laundry list of those. And I think at each of these meetings, we've asked a lot of those questions and we're trying to seek, you know, down to the maybe a little bit more pinpoint of answers to those or suggested answers.

I'm not suggesting that anyone has the right answer in any of these fifteen, twenty minute presentations. However, I think we're trying to narrow the focus a bit.

Sure. Well, I would suggest that in response to that point, I think one of the policy goals should be to make sure that the, the licensing process and the bidding process, the competitive licensing review process, puts the burden on applicants to demonstrate that they have the wherewithal to meet the specific goals.

And you you as as I said, depending on the locations in terms of and and what each location is going to require, assuming there's more than one location, the burden has to be on the applicants for the for that particular license to demonstrate that they can meet the that they can advance those goals, that they're best positioned to advance those goals.

Cherry, I have a separate question, but I'll I'll wait and circle back. I don't know. Okay. Let

Let me go straight to, on Zoom, and then start with, DBED, deputy first. And, of course, Mike, welcome. Mike Lambert from DLE is also joining us as well. But, Dean, can we start if you have any questions?

I I do not. Listen to conversations, some of the questions involving the tax structure. But, no, I don't have any other follow-up questions right now. If I do, I'll I'll raise my hand. Thank you.

Thank you. Because the guy to the right of you is far he's asleep, so I'll just jump over to I think I get Alan over here. DOH, keep an eye on your employee. Alan, you're up.

Hi, Michael. Great great to see you if if only through Zoom. I'm I've got a couple of questions, some of which you've touched on, but one of them is the licensure process or the bidding rather than licensure process. The bidding process and, you know, what is the infrastructure that you would see needed to produce a high quality result in terms of going through a bidding process and determining who a winning bidder might be.

Oh, that that in in and of itself, Alan, you you that's a a that touches back to the one of the questions earlier questions in terms of law enforcement regulatory process. There's gonna be a role for the existing government in in multiple areas to investigate and respond to the applications. Do they have the wherewithal? Where are they where are the applicants currently operating, and and and what success or lack thereof are they having in those jurisdictions? Do they have the financial wherewithal?

Can they meet their obligations? Have they had any problems in the past with socially responsible gaming or or any related matters? Have they had any licensing or law enforcement red flags in their history, and are those individuals still involved? It's it's it's gotta be a comprehensive process and it's gotta be done right from the outset. And and applicants and and these these companies are are familiar with that.

They're the ones that are going to apply, presumably, have done this in multiple jurisdictions, and they are prepared. But I think the most important one is, do they have the wherewithal to keep their promises to meet their to meet their obligations? We just saw this, by the way, in New York. New York just had a process where they awarded three licenses Downstate New York City, the first time in history in in, obviously, a major, metropolitan area. And it was an extremely lengthy and comprehensive process.

It took a long time, but I like to think they got it right.

And then on the the tax relationship to investment level, I I can't think of a jurisdiction, and I apply this globally, not just in The United States, where a higher tax rate has actually driven greater economic benefit in terms of total economic impact. It seems to me the jurisdictions with the lower rates generate higher levels of economic activity across the community, across the the state. Is that an observation that you would agree with or disagree with? And I would agree with

I would I would agree with with an exclamation point. It is absolutely it is absolutely a a a reality, an economic reality that there's gonna be a an optimal tax rate that the highest tax rate is rare is not gonna be the optimal tax rate. It's just not. If you if Hawaii and I don't think I I certainly get the impression that that's not gonna be the case, but follow the tradition of always being higher than other states, you're not gonna get the investment you need.

You've gotta get you've got and, again, the burden should be on the applicants to demonstrate that they are going they would take advantage of that effective, attractive tax rate with significant capital investment that will create employment and will generate gaming and nongaming revenue and as well as importantly, we touched on this earlier, purchases of goods and services from local and and other businesses.

And I I wonder you know, I've been trying to think of what other jurisdictions might Hawaii look at. And in my mind, I keep coming back to Singapore where they had tourism, but they were very specific that their objectives were to increase tourism and increase meeting and convention activity. And both of those things were were successful at at extraordinary levels. I'd also note that they said incredibly but by comparison in other parts of the world, they said a very low tax rate. Yep.

Because they understood that the only way to get to the objectives was to have significant investment, and they have these these two extraordinary resorts now.

Well and that's that's right. First of all, the there's a couple points. Low tax rate, limited to two licenses, and very strong, I I would suggest, cooperation from from government. Government was was very much on board with supporting in the necessary with with the transportation infrastructure and other necessary elements to allow them to achieve that success.

I I think I'm gonna leave it there and hear from others. If I have any other questions, we'll come back. Thank you so much. Thank you. Thank you, Michael.

Thank you. Chancellor Hukawano, do you have any questions for the speaker?

It's funny. I kinda Wanna continue on that train of thought. Right? I I I think, so first, I think one of the assumptions is that there is a significant economic advantage to having gambling. So I just Wanna make sure that of the fifty years of literature that you've looked at, that really is the case.

And then the second part is about the the cost, right, the social cost. And you would think that after fifty years, there would be some kind of a comprehensive summative assessment that talks about the cost of gambling, the social impact of gambling on the on the places that they had it. We we did hear from some of the I think when we heard from the Washington tribe, they did not see a significant increase in crime, but there are other ways that gambling can socially impact communities.

I'm just wondering from your work in this area for the last or studying for the last fifty years if you've done saw saw some summative studies about that.

Well, there's been enormous progress. I I just by way of anecdote, and it's just a sad anecdote, but just what we've one of the ways we learn hard lessons is that there was a gentleman who was, obviously, had a was a pathological gambler, had a serious gambling problem, and was about to be sentenced to to years in prison for embezzling money, and he had gambled at at casinos.

And I'm sad to say he actually had a gun and shot himself in the courtroom as he was about to be sentenced, and that just woke a lot of people up that we we gotta do something about this.

And what the industry and governments have learned over the years the hard way, frankly, is that, socially that the licensees themselves, the operators themselves have to demonstrate as part of the application process that they have implemented and demonstrated proven socially responsible gaming programs that have numerous elements, including and and, essential to that is, exclusion lists that, they can person can put themselves on an exclusion list or be put on an exclusion list. And that that's frankly that's essential.

And the responsible operators welcome that. The responsible operators recognize that the path to profitability and their own corporate reputation rests on on being good corporate citizens and with a focus on responsible gaming. It's not antithetical to success. It's not antithetical to profitability.

Perfect. Thank you.

Director Lambert?

Yeah. Standing by, Senator.

I you do you have any questions for the speaker?

No. Not right now. Sorry. I missed a couple meetings. I'm just trying to catch up to the temperature and where we are.

And then I do like what I'm hearing is it's more of the protections that, you know, if I do chime in, I'm I'm more concerned about, you know, making sure that we're dealing with the addiction and the fallout that could potentially happen, is kinda where I'm trying to stay in tune with.

Thank you, directors of Subhanoma.

Yeah. Thank you. I just wanted to follow-up on the tax rate. There's been a lot of talk about that. So I guess the first question would be, I guess, I could foresee I guess, what often happens with tax legislation is the the rate is oftentimes calculated based on amount of revenue that needs to be generated under the under particular measures.

So in in in this case, I'm assuming, you know, we're gonna need enough the state's gonna need enough revenue to address some of the potential issues that may come up with legalizing gambling. So we already talked about crime and, addiction and, you know, those other social costs.

So, in order to do that, though, to to figure out an appropriate tax rate to achieve a certain amount of tax revenue, is there how would you or how would we try to predict the amount of potential casino revenue or what the tax base might be based on one casino, two casinos? Is there a way is there, like, a a best practice for trying to figure that out?

There there are, firms we we work with, a number of of, economic firms and and, great universities such as UNLV that, have do modeling where they look at the direct benefits, the indirect, and and and so forth. And you look at the whole mix of of fiscal benefits. You look at the gaming related and the nongaming, and you can't just look at what the tax rate itself will generate. You have to look at it with the big picture. Will this generate additional nongaming revenue?

When I talk about nongaming revenue, I'm talking anything from hotels and meals to shows, conventions and meetings and and so forth, as well as employment related taxes that has to be brought into the mix and has to be fully considered. One additional point I should point out, though, is that, again, this is applicants are are certainly accustomed to this.

But the the cost of investigating and on much of ongoing regulation is comes through a special assessment on the licensees or the applicants themselves as opposed to doesn't come from necessarily from the general state budget. That's something that has to be taken into account, and that's something that, the the larger the the applicants are are certainly accustomed to in other gaming states.

K. So getting back to I said I I think you mentioned that deriving at an optimal tax rate is what we need to be looking at doing.

Yeah.

Is there some place easy for us to take a look and see what the various tax rates are among those jurisdictions with gambling?

Sure. I I'm I've certainly believe the American Gaming Association list that. But it it isn't the the optimal tax rate, it it's a has to be coupled with capital investment. That that's if you're gonna have a a the tax rate has to be identified and established through a focus on capital investment. Without that, the optimal tax rate will not be optimal.

If you understand that, they're going to invest based on on what their returns are going to be.

If you understand that, they're going to invest based on on what their returns are going to be.

I hope that answers your question.

Yeah. Thank you.

Next up, Tyler.

Thanks, sir. I'm gonna turn my video off because I think I'm having bandwidth issues. Michael, thanks for the presentation. I have, I think, three questions. So I think the first question is I'm hearing a lot of discussion around the tax rate, and I just wanna confirm.

There are models in which a flat tax on the revenue generated from the gaming itself does not need to be the primary method of revenue, and I mean that to say there are examples in which, say, a state-owned or a public/tribally-owned facility licenses out the operation to an operator, say like a Caesars or whomever, and then the net revenue is the revenue source for the owner, correct? And in this hypothetical, it'd be the state. Like, we don't necessarily have to get caught in the weeds of designing a hyper-specific tax rate immediately, correct?

Correct. Correct. Matter of fact--

So then--

Yeah. Go ahead. I'm sorry.

So my second question really is, like, I think the questions here are good ones, but they sorta-- they are presupposing a question that I don't think is answered yet and that's a question of who. And so, in your experience, is the most successful models--and let's say the safest models that develop in new markets--are these details best hammered out by, say, the legislature in arguing over a bill, which can be very, you know, tumultuous, or are those responsibilities better put off to, say, a commission established by a legislature to be debated in a smaller forum?

That is a terrific question because-- I would answer that by saying that-- and I've certainly been through both the legislative and the regulatory process. I've seen both at work, and a process in which the decision makers, be they regulators or smaller groups of legislators or something to that effect, having the ability to respond to changing circumstances can be a lot more effective to identify the necessary circumstances; can certainly be the most effective. The legislative process is just-- in my view, it's just generally not designed to be that responsive.

My final question, I think, is in follow-up to Director Suganuma's concerns about sufficient funds generated, whether it's based off of a flat tax on revenue or whether or not the operator's net revenue is the source. But in your studies--and you may not have prepared this for today--do you have any idea to estimate how much money is currently exported out of the State of Hawaii in terms of revenue generated by Hawaii residents gambling elsewhere?

It's a great question, and I certainly have not done that research, but that would certainly be something that you would want to know early on, and it's not that easy to get but certain operators certainly--you know, Boyd is a good example--would be able to provide some guidance to that.

Does-- I mean, I remember there being an older report. Sorry. This is my final question, Chair. I know I'm now, like, 5D.

<unintelligible> the whole time.

But there's a-- my final question is I thought I read-- you know, a ways back, there was a report, and you can just tell me in your experience if this sounds about right that there was a guesstimate that, let's say 15 years ago, about $1 billion was leaving the state annually to support Hawaii residents gaming elsewhere. Does that sound reasonable?

It certainly doesn't sound-- it's hard to say. It certainly doesn't sound unreasonable, and we certainly need to-- I'd like to know where-- how that number was arrived at, but I also wanna point out that it's-- part of the issue is obviously, like, getting the question as to how much money is leaving Hawaii and going to other gaming jurisdictions and how that would be coupled with the ability to target new markets and to get more visits and more visitors from existing markets.

I mean, Hawaii, you've already-- you've tapped into so many markets already, and I think one of the great opportunities that Hawaii faces that other states, most can only marvel at, is the ability to work with operators in those other states that have effective loyalty programs that players can earn points or be marketed to to generate visits to Hawaii because I can't imagine anyone gambling anywhere who would not wanna visit Hawaii as a result. They just-- I just can't conceive of that, to be candid.

Michael, thank you very much. That's all my questions, Chair.

Thank you. And then I'll move back up to Department of Health, if you have a question for the presenter as well. You can unmute.

Okay, yeah. I'm just curious about how you regulate honesty and character.

That was the challenge that New Jersey faced right from day one, and you-- first of all, the way you do that is the applicants have to demonstrate their own good character, honesty, and integrity. They do that through very detailed, robust licensing and investigative processes that take place where you you literally go back into their history and you can examine their financial records as individuals and as corporations to determine how they've reacted in the past and what they endeavor to do in the future.

New Jersey learned this early on, and that-- and I'll be candid with you. That factor, the ability to address that issue is one reason why over the past half century, we've gone from one state to two states to now more than 30 states that have it because they have effectively been able to demonstrate that it can be done.

And I would also add to that that one of the risks is that if you are inclined, if you're-- let's say, if you don't have that necessary integrity and you're endeavoring to get in this business, then you've got a great incentive to get your act together and to keep your act together because you can lose your license. And if you lose your license, you lose everything.

You don't just lose your license in one state, presumably, because other states would look at that and say, what's going on here? There's a lot riding on the ability and the willingness of applicants and operators to continually maintain those standards of good character, honesty, and integrity.

Thank you.

Thank you. Co-Chair, do you have any questions for the speaker? Yeah, Alan spoke earlier. I'll go back around in a second, though.

Thank you. Michael, thank you for the presentation and thank you for the slide here. I have several questions, but let's start off with some big thought questions. So we have no nuclear in our constitution, and the reason why is because we don't want nuclear in the state, environmental reasons, the uncertainty. We also have approved medical marijuana or cannabis because of the fact that, health reasons, we want to make sure it's accessible, but we don't have recreation. My question to you is what problems does legalizing gambling solve in Hawaii?

Well, I wouldn't put gambling as a problem-solver, and I wouldn't characterize it as a problem-solver without knowing what issues it's being asked to address. I mean, it's-- in other states, the--and I'm putting air quotes around the word problems--that it has been asked to address include everything from urban development to tourism growth. I don't see that as being, in Hawaii's standpoint, problems to be solved. I think these are issues that can be enhanced.

But I wouldn't look at gaming as a-- and by the way, this question-- there was an earlier question that touched on the same theme that the simple process of legalization does not solve any problem or solve the problem. It's gonna be an ongoing process, but I wouldn't look at gaming as a problem-solver. How can gaming address and enhance certain very specific issues that you have identified as issues that need to be addressed? And they range from we need more tourism to state's fiscal revenue, so forth. But I wouldn't characterize it as a-- in those terms as the solver or the solution.

Thank you, Michael, for your thoughts. I do wanna state that with gaming prohibition right now, we have illegal gaming happening in this state, and I believe our DLE director concluded an estimation of-- remind me what the numbers were every year?

Seven hundred to 800 million.

Seven hundred to 800 million when gaming is illegal. I am taking an assumption that that number would start being addressed because now there's a legal outlet of gaming. Now, with your answer, enhancing, we have always talked about diversifying our economy. I would assume gaming would start diversifying our economy and have not only the military and tourism as our top two but gaming would be a percentage of the market share of our economy. Michael, in other states, what is the market share of gaming to their economy? I assume Vegas or Nevada would be at the highest rate, but at just the top of your head, do you happen to know that number?

I don't, but surely Nevada would be the highest, and I would say that gaming-- when you say diversify, gaming is gonna be part and parcel of tourism and hospitality, and it gives it a new flavor and it gives a new opportunity to reach a broader market but it's going to help address the issue of illegal gambling in a couple ways.

First of all, obviously, it's going to create a legal, attractive, trustworthy alternative for people who are gambling illegally to turn to something that's legal, but it also-- the revenues generated will also give law enforcement more tools and more-- a greater ability to go after those illegal operators.

So, I want to dwell on this a little bit more. Because of the fact that we would have revenue coming from gaming, I think my fear has always been that money leaving the state and not staying in our state. And one of the things that really opened my eyes in this working group is the frame-- I think it's a given that there has to be community benefit out of this whole process. That's a given, but I think what really opened my eyes is--and I gotta thank Brandon for this--is the local ownership of gaming.

And when you started talking about, on your slide, the burden of proof goes to the application or the applicant, how do we ensure that the burden of proof for local people here in our state who doesn't have very much experience in gaming, who has never-- they might be lucky to have worked in Vegas or someplace else and then come back to our state, but how do you ensure that those entrepreneurs or business investors in our state who's locally minded, who cares about our community, don't have the same stipulations as a multibillion dollar gaming industry who has run multiple states and can never get to that stage because it's new?

How do we create a framework to allow Hawaii ownership but also ensure that there's competition and there's possible outside individuals who knows the industry very well and can run it efficiently? How do we create that framework? What should we be asking when we ask for the burden of proof?

Sure. Well--

As a regulator, I'm sure you know the answer.

You've touched on a number of critical issues. Number one, in terms of the-- coming back to the application process and having the burden of proof on the applicant for licensure to develop and put forth for review a very detailed robust plan for how they intend to-- what their mix of gaming and non-gaming is going to be, how are they going to purchase goods and services from local businesses? What is the relationship going to be with local businesses?

Are they gonna have some, for example, on-site restaurants and so forth? Are they gonna be purchasing supplies from existing local businesses? Are they going to have training? Well, I'm sure they will. They will put forth training programs for their employees and senior managers. And in terms of money leaving Hawaii and going to other states, I think that through, obviously, the fiscal tax streams, number one, but also just through repatriating, which was touched on earlier, money that Hawaiians now spend visiting other states to gamble.

Okay, Michael. I do have a lot more questions. I gotta say your answers, they're still very vague, and I understand that you have your presentation, and like everyone says, it's hard to get all the answers in such a short time, so I'm just gonna leave it to one more thing I had in mind.

You gave me some time to look at your website and there's a lot of good resources there. It's good studies. One of the studies that I was reading while you were answering questions is the social impact for New England states and New Hampshire, and one of the things that I found interesting was one of the recommendations is a 5% gross revenue tax in Massachusetts. That was the recommendation. Do you know anything about that study?

Yeah. If the study of that you're referring to is what I'm thinking of is when Massachusetts first was considering gaming, that's a very good precedent for Hawaii because, again, that was something that we started essentially from scratch, started with reaching out to legislators and other leaders as to what their policy goals were, and then developing a recommended strategy from that.

The study is the Social Impact Study Overview of Responsible Gaming and Problem Gaming Best Practices in the United States, and it was prepared for the New Hampshire Charitable Gaming Senate.

Well, neighboring state, but the same principles would apply, and please understand that my answers are--and I suggest they have to be--vague only because all we can do at this point is establish the principles, the guiding principles that have to be in place prior to getting into the very specific policy details.

And those principles effectively are having an effective tax rate from the outset, having certainly capital requirements from the outset, having applicants have the burden of proof as to how they're gonna specifically meet those goals, including socially responsible gaming and so forth. But my answers are vague because they require a lot of research to get into the specifics. But the--

Well, thank you, Michael. Your principles are great. I do agree with those principles. You just start-- you were gonna go into the Massachusetts study before you go to the next question. Did you have anything you would like to say about it?

Well, Massachusetts was a good example of how the process worked. We started again with a clean slate. Where is gaming around Massachusetts and where is it needed and what are the specific policy goals? And my recollection is there were several policy goals, and depending on the location of the license process, focused on those specific goals, and they range from urban development to tourism growth and so forth.

But again, we started with a clean slate and then worked with the leadership to develop all of the necessary components, including the tax rate, number of licenses, and locations and so forth. But we didn't have the answer, and no one should have the answers going into the process. Just establish rules on which you're going to do your research and then come up with the answers.

Thank you, Michael.

Thank you.

Thank you, Michael. So, Michael, I wanna-- I got a few questions, you know? And just to bring light, thank you for one of your presentation. You know, I guess we wanna know the problems, right? You know? We're trying to solve our problem of cash flow revenue, which is why the biggest question is the tax rate. What is the tax base rate?

We know illegal gambling exists. We know that Hawaii is the last state to legalize gambling. We know that we have cost of living one the highest in the nation. And when I look at Las Vegas, not to say I'm for gaming or not for gaming, but when I see families struggle in Hawaii, and we've looked at just about everything under the sun, whether you wanna legalize medical marijuana and you wanna legalize anything to draw revenue, if I had to compare apples to oranges, which is why I see half of our native Hawaiian people moving to Las Vegas, because we just can't afford to live here in Hawaii, illegal gaming exists on every island, and I believe we hit about 1 billion in illegal gaming out there.

I know that the cost of enforcement has taken away from our enforcement to be looking at more pressing issues than to continue, which Mike has done a great job in cracking down on illegal gaming. Comparing Hawaii to Las Vegas, and I can tell you my dad will go to Las Vegas every chance he has, which drives me crazy, how do you come up with the scenario of why gaming exists in these other states that have drawn people, many of my families that are there living in Las Vegas when they wanna be here in Hawaii?

What is the lure that brings them back or allows them the affordability to live here, at the same time allowing gaming to exist in addressing, which is why I believe the license is what you're pointing towards and how that license goes out and the parameters set around it can help us address the issue of having cultural, native Hawaiian issues, just issues of the people involved in the control around it, and we as policymakers trying to set those parameters to say, this is what is allowable?

This is what is palatable to the people of Hawaii at the same time addressing gaming addiction, addressing the fact that, coupled with gaming, which has literally been incorporated with gaming addiction is inclusive of alcohol and drugs, does the revenue stream help us to address all of those issues along with educational issues as a native Hawaiian tribe that had spoke earlier had said now their revenues allow them the affordability to provide scholarships for higher educations for many of which I have always supported are native Hawaiian kids for higher education and a better education in many of those elite schools that they could never afford? And I know there's plenty of questions in one, but--

Yeah.

--I kinda want you to wrap your head around that so I can get a better idea of how I would like to form some kind of policy or legislation around addressing those issues.

Okay. Well, first of all, I would make clear that gaming is not a magic bullet and gaming does not solve the problems. Gaming can structure, and in an effective way can provide the tools for the state and local officials and others to give them the ability to address problems. But the issues that you've raised from-- gaming does not solve or will not solve affordability, but it can give states the ability to address it through other means.

In New Jersey, for example, they determined to take certain levels of casino revenue and essentially give them as incentives to developers to build housing at a lower cost. I'm not saying that that's-- that's one example you can look at, but it gives you the tools to essentially to do that. But that's-- you know, the issues you-- and no state, Hawaii or any other state-- you can look to Las Vegas and you can look to Nevada, but you're never gonna emulate that.

A lot of states, it's just not gonna do it, only because the secret there, the not-so-secret secret is that it was many billions of dollars in private capital that went into building a gaming infrastructure in the desert that was able to-- that has proven to be successful. That's-- I don't think you're gonna emulate, but you don't have to because you've got a tourism infrastructure in place and then-- and build upon that and enhance that as opposed to trying to do what Las Vegas did.

You can create an effective alternative for a significant number of people to come to Hawaii, even regular Las Vegas visitors. If it's a-- you know, whoever it might be, whether it's a Boyd, a Caesars, an MGM or whomever, many of their visitors to Las Vegas are gonna want that option of coming to Hawaii and are gonna take advantage of that if given that opportunity. But again, it's not gonna solve the problems. It'll give you the tools to address the problems. It can give you the tools to address the problems.

So, Michael, let me ask you this other question, then. Have you ever seen a Caesars, an MGM, a Boyd, come in for a license for-- in partnership on a civil and native Indian tribe on a licensure?

Well, certainly. There are examples in which commercial operators are operating on behalf of tribes. Absolutely. I can't even-- just-- like for example, the Seminoles of Florida, they own Hard Rock. That's-- they own that brand. But initially, Hard Rock came in as something that-- to help them operate, and Seminoles bought Hard Rock. But that's certainly doable.

Can you give me one entity that has done that?

Well, certainly.

Well, maybe Paul can answer that.

Mike-- Michael, I'll answer that because I can give you real-time examples. So, Boyd currently is in partnership with the Wilton Rancheria Tribe outside of Sacramento. We operate the Sky River Casino. It's initially a seven-year process. They're a sovereign tribe on sovereign land.

We helped the first 10 years fund the entire process to get to that point, funded the build of that casino and are operating it with them currently. That's an ongoing partnership and still to this day. Our other tribal partnership is actually a commercial license on commercial land in Norfolk, Virginia with the Pamunkey tribe. That is a-- just a normal, commercial partnership that we have with them.

They won that license through ballot initiative and looked for a partner, qualified partners, multiple partners over the years to find the right partner, and we won that opportunity with them and are in the development of a $750 million resort in Norfolk, Virginia in partnership with the Pamunkeys.

Thank you. Thank you.

That's a great example. There are many other examples of actually tribal operators that have gained the wherewithal and have accrued the capital to then go out into commercial and other tribal jurisdictions to become the operators. They've gained that ability, and there's numerous examples of that.

Perfect. Thank you. I'm gonna jump back to Zoom. I saw Alan. You had your hand up a while. Go ahead, Alan.

Thank you very much, Madam Chair. A couple of questions. I mean, I've got a lot, but I'm gonna keep this brief. It has been my understanding that the greatest benefits have accrued in the states that have offered a license for a brick-and-mortar investment. Can you think, Michael, of any jurisdiction where that isn't true, where they've basically given-- we've heard some discussion of Internet gaming, online gaming. Is there any state where that activity has created greater benefits through investment and employment?

By definition, the answer is no because it's-- you're absolutely right. Internet gaming, iGaming, any aspect of that best functions as an element of and in addition to as an adjunct to land-based gaming where the people who sit at home and play on their phones or on their computer, where you can market to them. There's a critical difference, Alan. And to everyone, there's a critical difference between a transaction and an experience. iGaming and its elements are transactions.

They're not experiences. You have to leverage transactions, the people who are engaged in those transactions, then reach out to them because they want to have experiences, and you have to develop a formula, a mechanism, an incentive for the operators to then say you've earned the ability to then come to a casino. Because no one sits at home on a Friday night and says, well, you know, I'm gonna stay on my phone instead of going to a casino and playing craps or playing Islamastine, having a meal, seeing a show, and so forth.

You have to-- there is a distinction between a transaction and an experience, and iGaming--and lottery, frankly, for that matter--are transactions. Casino gaming, brick-and-mortar gaming offers experiences. Critical difference.

Thank you. I'll make this my last question, and there's probably even a bit of comment in here. There have been a lot of questions about issues surrounding problem gambling, gambling disorder, and I notice in the comments, Mr. Campos specifically says that we must ensure sufficient services to combat any potential detrimental effects. And I just wanna concur.

I think he's exactly right, but one of the topics that Hawaii must address is the public health infrastructure in order to provide treatment for those who need it. Now having said that, I also wanna place some context around this. It doesn't mean that there's-- that that isn't important.

It means that's critical, but in the State of Nevada, which has a population maybe double-- maybe even a little more than double of Hawaii, our annual appropriation for problem gambling services, which includes treatment, prevention activities, education activities, that is $2 million a year, and of that, roughly 1.2--it likely is going to get to 1.3 because we've increased some reimbursement rates, so let's say it's $1.3 million a year. I think when we talk about the issues surrounding problem gambling, without any analysis, we believe that it's just overwhelming and enormous, and it really isn't.

These problems are incredibly serious, and when they affect people, they have incredibly serious impacts. But relatively speaking, it's a relatively small number of people. We still wanna make certain we can address this, but I think-- we've heard some comments and questions throughout about, you know, the public cost. And I note-- and maybe, Co-Chair, earlier on this, this may address one of the things you were talking about.

In Massachusetts, the state set aside money every year for research, and they call it the SEIGMA, the Social and Economic Impact of Gambling in Massachusetts, and it studied a very wide array of impacts. And I would urge that, you know, we go and take a look at some of that work because one of their findings was there was no increase in problem gambling. What there was was an increase in people seeking problem gambling services. In other words, it exists.

You're just not treating it. And what the gambling did-- and I guess this is kind of a-- sort of this point that you've made, Michael, about gambling is a means to an end. It's not the end unto itself. What the gambling has done is provided the funds so that services can be made available. But again, I simply wanted to acknowledge that if it matters in Nevada, our public allocation, annual allocation right now stands at $2 million a year.

Well, Alan, states are working together, you know, in multiple ways in terms of sharing information as well as--it's interesting--sharing exclusion lists, that if you're on an exclusion list in one state, you should not be able--and theoretically, you cannot be able--to gamble in other states. And that's welcome, and the operators that are likely to be seeking a license in Hawaii will certainly be supportive of that because their licenses are tied to that.

So that's a critical point, but there has to be ongoing communication between states and there has to be-- and to your point, the fiscal streams that would be generated, gaming and non-gaming through the establishment of casinos, much of that would have to go to both research and treatment of problem gambling.

Okay. Thank you.

Thank you, and then let's go move to the last question. I think, Paul, you had one more question, and then I gotta shut it down.

Okay. And then-- so, Michael, I wanted to circle back to suitability. There was-- you spoke on it about the risks that an operator may take. If they run afoul in one state, they risk their investment in another state potentially. I'd like you to dig into that a little bit more and the need, and I'll put on my former legislator cap for a minute. Pressing the green or red button seems simple but it's an extremely difficult choice to make.

There are always pros and cons to every single choice you make and you never understand the pressures you're under unless you've been in that seat and have had to take those votes. Understanding that, the best thing you can do is attempt to mitigate any potential downside to a yes or no vote. No votes often are in favor of a status quo that have its own consequences. Yes votes bring in a lot of unknowns that may also bring in unintended consequences.

And so when you're looking at-- you'd, I think, brought up the idea that you need to have a potential operator or licensee prove their worth or prove that they're gonna be able to accomplish the things they say they are, how much of that falls into suitability in other markets, history, you know, their ability to have, say, a proven track record? Where does that lie from a sort of comfort level when a state is looking at something so significant of a change?

That's the heart of it, Paul. That's everything, and I would say one thing. You said, would someone falling into having licensing problems in one state may affect their license in other states? I would say it should and it likely will affect them in other states.

And states-- and regulators and investigators speak to each other, and they should speak to each other so that they know what's going on. And obviously, operators and-- you know, again, the Caesars, the Boyds, the MGMs of the world have operated multiple states. They know this. They're not gonna put themselves at risk, and starting with that principle and having that principle front and center in the statute and in the regulatory process is essential. You cannot-- it can't function without it. It's-- everything depends on that. Everything from public acceptance to capital investment depends on that.

Thank you. I'm gonna wrap this up. Co-Chair, if you wanna-- you have something to say before he goes?

Thanks, Chair. One thing I did learn in this meeting is the voluntary exclusion list and that different states actually confiscate those monies and put it into their fund. And I think we definitely need to do something similar and we also definitely need to allocate funding for social service as well as public safety.

And I just wanna state that because I had three funding sources. Now I have four in my mind that definitely needs to be in legislation, and that voluntary exclusion list, I don't know the intricacies of it because some states like, I think, Massachusetts, only in the form of a ticket within the machine they confiscate. I believe Maine has whatever winnings a person who is in the exclusion list. They confiscate.

So I'm not sure the legalities, and the AGs can figure all that stuff out, but definitely needs to have something that it goes back to the state because if we don't have anything, then it's just a free-for-all and what happens with that money?

That's my comment.

Well, a couple of points--

One is a voluntary exclusion list is not limited to the state you're volunteering it in. When you take that serious step and you do within any state, you cannot gamble in any state, and Hawaii would presumably sign on to that. That's number one. And yes, that the revenues generated have to include allocations as noted earlier for law enforcement, local and state law enforcement, for treatments, and all of the necessary expected outcomes that we've discussed.

Michael, thank you. First of all, I just wanted to thank you for your presentation. Committee members, thank you as well. And this is where the working group is at, at the forefront. It's basically to address a lot of these issues as we build a framework around the finalization of the report.

We have about four more months to go, and as we have different presenters present, it allows us to then bring on other presenters that can address a lot of the problems as well as the offering up to look at other states or other tribal and reservation areas where we can educate ourselves better. I think this was really good of today's-- my apologies.

I did put on just one speaker today because I noticed that in our presentations, we always run out of time and, you know, there are a lot of questions. This is a very important matter to the State of Hawaii and I wanna make sure we deliver on a promise that we can present as much information and accurate information that is gonna be liking to the community as well as where we move forward, but there has been no doubt in my mind as a framework gets set up behind it, as our Co-Chair has alluded to, I do believe this is where we set that precedent on what we expect within that license and licensures that is built going forward.

So this is a great meeting for today, and I look forward to seeing all of you. At the next meeting, I think that was set for August. We're gonna confirm that date probably in the next few days, but thank you all for being here, and with that, we are adjourned.

If I may say real quick--