Hawaii’s Economy: Time for a Lottery?
Jan 14th, 2009 by Capsun
Note: This is the second installment of a series. If you missed it, check out the first installment.
On Sunday, Ian Lind noted the gaming/gambling buzz word in coverage of Senate Ways and Means Chair Donna Kim and how to deal with the state’s worsening budget woes. Then there’s the grim news that the State expects $250 million less in tax revenues, thus confirming points in my post on Paul Brewbaker. And just yesterday, we had Twitter reports on (the) Hawaii economy.
It is within this context that I ask: Is it time for a state lottery? I do note that Kim Fassler beat me by a day in asking that question.
Consider this discussion of recent lottery legislation in Hawaii:
At the Hawai‘i State Legislature, between 2001-2007, lawmakers have considered only nine proposals authorizing a state lottery in one form or another. Six of those bills were introduced in the Senate and the remaining three were introduced in the House of Representatives. The small number of lottery proposals is in stark contrast to the number of measures introduced to authorize gambling in general or casinos in particular, of which dozens have been introduced each legislative session. In fact, in 2003 and 2005, no legislation concerning lotteries was introduced in either the House or the Senate.
The relatively low number of lottery bills introduced makes it difficult to explore possible reasons legislators may have opposed a lottery. Furthermore, there is a very limited amount of publicly available data on legislative actions regarding a lottery. During the time period covered, none of the lottery bills was ever scheduled for a hearing before a committee of the Legislature, effectively “killing” the measure by not allowing it to get to the floor of the respective chambers for a discussion and vote by all members.
Despite the paucity of information available, themes and trends can be gleaned from the information that is available. Four bills would have directed lottery profits, either in whole or in part, to education:
- 2007’s SB951, Relating to a Limited Lottery;
- 2006’s HB3085, Relating to a State Lottery for Education;
- 2006’s SB2613, Relating to a Limited Lottery; and
- 2001’s SB732, Relating to a State Lottery for Education.
Where education would not have been the only beneficiary of lottery proceeds, other priorities would have included rail transit, mental health and substance abuse programs. HB3085 also tried to address some possible social problems by prohibiting recipients of state financial assistance from buying lottery tickets.
Three bills would have required a referendum be conducted by placing a question on the ballot, which would have to be approved by the state’s electorate before authorizing lotteries:
- 2007’s HB434, Relating to an Advisory Referendum on a State Lottery in Hawai‘i;
- 2004’s SB83, Relating to a Referendum on Gaming; and
- 2002’s SB2326, Relating to a Referendum on Gaming.
Two bills would have let the four county councils (City and County of Honolulu for the island of O‘ahu, County of Kaua‘i, County of Hawai‘i for the Big Island and County of Maui for Maui, Moloka‘i and Lana‘i) decide whether or not to authorize gambling, including lotteries, in their respective counties:
Another trend concerns those legislators who introduced the above legislation. Of the nine bills, five were sponsored or co-sponsored by three people: Senators Clayton Hee (two bills; SB951 and SB2613), Cal Kawamoto (three bills; SB83, SB2326 and SB1375) and Donna Kim (two bills; SB2326 and SB1375). A majority of the sponsors in both houses served on committees with purview over either education or economic development issues in their chamber.
So now, knowing about Sen. Donna Kim’s past support of lottery legislation, it is not surprising that she is now asking about the option to legalize gambling. If lawmakers authorize a lottery, what do we need to know and do? Please come back tomorrow for an answer to that question. While the question of whether it is finally politically viable to float the idea of a lottery remains to be seen, it will be interesting to see how this plays out.
Mahalo!
Note: A substantial portion of this post was excerpted from my Master’s capstone project, Betting on a Lottery: Should the State of Hawai‘i Implement a State Lottery? I co-authored it with Arlah Canchola, Neha Chaturvedi, Hung Nguyen, and Tammy Watts. The capstone is much like a group thesis, but with an applied focus to it.
Hmm, I thought lotteries were basically just a regressive tax hike? Anyway, the “lotteries for education” are the worst, cause it’s just a sham. Most times the money that goes to the state from an “education lottery”, does go to education. However, the education budget from the general funds get smaller and smaller, because the legislature knows the schools get lottery money. In the end, education is pretty much funded the same amount overall before the lottery, and all that comes of it is a new regressive tax.
David: Wow, you must really be interested to visit and post a reply! Tomorrow’s post will have some of our discussion and recommendations. I agree with your points; in fact, we discuss it in some detail in the Capstone, but I figure none of my readers will actually read dozens of pages of academic writing.
Given the current economic downturn, I’m fearful that gambling is being revisited for all the wrong reasons. Basically, I bet(!) most people are looking at it as a band-aid to replace lost revenue from traditional travelers. What happens when we discover that our infrastructure can’t sustain a sufficient number of gambling and non-gambling tourists? How (and who) do we decide which type is more desirable once the economy recovers? Betcha not too many people in the big square building are thinking about that.
Art: Excellent point. It was definitely in our capstone that a future group could build upon our research during an economic downturn, such as the current one. It’s mentioned in tomorrow’s post. Today was just to get the discussion going.
[...] wrote up an excellent historical breakdown here of previous attempts to start a State [...]
For the most part it will be locals buying lottery tickets — and it won’t be the well-heeled locals. Those folks who can least afford it are the ones who buy lottery tickets, and in many instances they spend the money that should have put food on the table.
quilly: Good point. As I’ve told Art and David, this was addressed in the bigger paper. I will touch on it in tomorrow’s post, but I’m not sure it will do your concern justice. If you’ve ever got a lot of time, I could show you the whole section.
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