Capsun's Corner – by Capsun M. Poe

Note:  This is the third installment of a series on Hawaii’s Economy.  If you missed it, check out the first and second installments.

Gov. Lingle, at least for now, is keeping gambling as an option and reiterated her stance yesterday.  And so, the debate continues.  It seems that everyone is writing about this.

Much of today’s post was excerpted from my Master’s capstone project, so the info is a year old now, but I think it contributes greatly to the public discourse on gambling.  It’s amusing that I am now sharing it with others; at Commencement, we vowed that we never wanted to hear about a lottery again! If you studied this issue almost exclusively for two semesters, you might feel the same.  Any emphasis in bold did not appear in the original, but by me today.

This is how we described our study, in our abstract (basically a summary):

This capstone examines several aspects surrounding a lottery and attempts to determine if Hawai‘i should implement a lottery.  It is unique in that it looks specifically at the issue of a state lottery, and no other form of gambling.  Starting with their history, moving on to processes for creation and implementation, it also explores the impact of state-run lotteries.  The capstone includes findings from data collected from focused interviews with two key stakeholder groups:  legislators and advocacy groups.  The authors were especially interested in exploring the attitudes, suggestions, and criticisms offered by these often-opposing stakeholder groups and provide discussion of these findings.  We conclude this capstone by offering our recommendations to policymakers regarding strategies, as well as tools for measuring public support or opposition, for possible implementation of a state-run lottery.

In our conclusion, we provided further discussion and analysis of our findings.  Unfortunately, results were mixed, with support and opposition about equally divided, and equally convinced their view should prevail.

Some respondents indicated they could not support a lottery unless it was economically necessary. Others did not personally oppose a lottery, but would oppose it if their constituents did.  Given the events that have transpired since this study was first proposed in December 2007, Hawai‘i’s economic landscape has changed:  the housing market has cooled locally and nationally, two airlines serving Hawai‘i have shut down, the state’s low unemployment is creeping up, and visitor arrivals are down.  As the economy slows and its full effect is felt on Hawai‘i’s tourism-dependent economy, prevailing views on the possibility of a lottery may change. To that end, a future Capstone group could revisit this study when the state is in the economic doldrums, and may likely have vastly different findings that reflect a newfound willingness to consider new means of revenue generation.

So here’s what we finally recommended, to whomever would listen:

That lawmakers introduce a well-crafted bill in the Legislature to authorize a state lottery, if it is warranted.  Any bill to authorize a lottery would have to be well-crafted because in order to be passed and signed into law, it would need the support of the community. It would also need that support to be a successful, revenue-generating program.  Even legislators who supported or were open to a state lottery expressed concerns over potential social implications (e.g. those receiving public assistance/welfare benefits would participate).  It needs to be precise and should address the challenges opponents have brought up during the study or may bring up in the future.  The bill needs to outline, in its proposed statutory language, all the concerns advocacy groups and their supporters are likely to raise, as well as administrative and legal questions.  Questions regarding administration and revenue allotment can be answered and influenced by looking at the results of the referendum.

Looking at two states in particular – Georgia and North Carolina – may prove especially useful to legislators and other policymakers as they craft the bill and make efforts to give life to the lottery.  Georgia was chosen because we anticipate a great deal of support for education programs to receive lottery proceeds while North Carolina was chosen because it is the most recent state to implement a lottery.  Georgia has awarded almost $3.6 billion through its HOPE scholarship program sincen 1993.  It has been so successful that one legislator mentioned it as a possible model to follow, and we concur with that recommendation.  Having started their lottery in 2006, North Carolina implemented their lottery through legislation, although we recommend the hybrid of a referendum first, then legislation if warranted.  North Carolina also experienced growing pains in the form of corruption charges against lottery officials.  It would behoove Hawai‘i officials to duplicate the successes of Georgia and avoid the pitfalls of North Carolina in implementing a lottery in the state.

Just as we saw with the rail issue, if a lottery is passed over strong opposition, let’s hope policymakers focus on doing it right.  Perhaps you should share this information with them.

Mahalo!

Tags: Hawaii, legislation, legislature, lottery, state lottery