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March 2002
Annual Meeting - April 27, 2000
Vote Count
Evening with Mayor Harry Kim
East Hawaii Meeting
West Hawaii Activities
Proposed Budget 2002-2003
Can the state of Hawaii afford costs of casino gaming? (Joanne Ralston)
Remarks by Mary Anne Raywid, Ph.D. (Mary Anne Raywid)

Can the state of Hawaii afford costs of casino gaming?

Reprinted from West Hawaii Today, December 2001


I was both amused and dismayed by the Dec. 18 page one banner story, "Cayetano favors isle casino" - amused at the governor's lack of logic and dismayed by his void of knowledge about the gaming industry.

Having spent nearly eight years as public affairs liaison for a major, publicly held mainland casino corporation with seven casinos in Nevada and New Jersey, I have seen both sides of the gambling coin.

While the governor may have the best of intentions - or commitments? - he has failed to recognize the pitfalls and hard dollar costs that are imposed on a community and state with the advent of casino gaming.

From a pure regulatory standpoint, how does Hawaii intend to regulate gaming? Gaming is the single most highly regulated industry in America - and for good reason.

One look at the volumes of rules, regulations and laws in Nevada and New Jersey should cause policy makers to pause. The cost of manpower, regulation and enforcement is not cheap.

Gaming is a cash business.

A big cash business, subject to incredible abuse. It requires consumer protection laws of unprecedented degree and experienced investigators for on-site enforcement.

A few examples:

  • Unannounced audits of cash counting rooms to avoid skimming and fraud;
  • Mandatory casino credit limits;
  • Unannounced inspection of slot machines and other gaming devices, designed to detect electronic or other tampering by either the house or customer;
  • State mandated casino payout percentages to prevent ripping off unsuspecting customers;
  • Destruction and replacement of all dice, chips and playing cards every 24 hours, with environmentally sound disposal methods;
  • Prohibited hiring of any personnel ever convicted of a felony, e.g., stringent licensing requirements for the casino operator, management and employees;
  • Maintenance of a state "prohibited" list of persons not permitted to enter a casino - card counters, etc.;
  • Required casino materials and advertising warning customers of gaming addiction;
  • Mandatory security provisions, such as eye-in-the-sky camera monitors and "mantraps" - a double entry-exit bulletproof glass door system designed to trap a would-be thief without endangering customers or employees;
  • And, most important severe penalties for violations coupled with rigid enforcement.

A sound regulatory system protects both consumers and casino operators.

In New Jersey, for example, the Division of Gaming Enforcement is part of the Attorney General's office, and a separate Gaming Commission oversees licensing, auditing and all the personnel required to enforce provisions like those above. The Gaming Commission maintains an on-site office at every casino.

Have any of these safeguards and resultant overhead costs even been discussed in Hawaii?

Half pregnant

The governor's statement proposing legislation for a single casino - not in his back yard on Oahu, where it might make population sense for a casino operator, but here in our front yard - is naïve at best

His direct quote, "Approving one casino for Hawaii would remove the reasons I oppose gambling in Hawaii," is mystifying. There is no such thing as half pregnant.

And his notion that "adding a casino in the Kona area would keep it out of easy reach of most local people," is contradictory, discriminatory and devoid of logic.

If a casino is such a hot idea, why does he want to keep gaming away from local residents? What happened to Sun Intemational's proposed $800 million resort-casino at Ko Olina on Oahu?

The governor appears solely focused on the "state's share of the profits ...for health care or education."

Yet he fails to discuss any of the social and economic ramifications with his own taxpayers.

His defensive posture on having met with Hilton Corp. and Sun International - both excellent gaming companies by the way - results in the misguided notion of putting a casino "out for bid..."

By "bid," one assumes he is only interested in the profit percentage a casino operator would pay the state.

That is one of the least important factors in state selection of a gaming operator.

One of the most important considerations should be finding a company already licensed in Nevada and/or New Jersey, a company cognizant of consumer protection that does not want to risk its reputation or lose its license in those states as a result of misdeeds in Hawaii.

Indeed, the most sensible statement in the entire article was that of Senate Minority Leader Sam Slom, R-Hawaii Kai-Aina Haina, who said, "We don't buy the idea that just having gambling will help the economy."

Unintended consequences

With millions of dollars in play, is it any wonder no one wants to talk about the social harms unleashed by gambling?

The congressionally appointed 1998 National Gambling Impact Study Commission carefully noted that Americans are losing more than $50 billion a year in legal wagering.

Worse still, this figure increases every year and often at double-digit rates.

Can Hawaii afford legalized gambling in these uncertain economic times?

Consequences exist. Several research studies and government statistics show that the arrival of gambling causes significant social problems - increased bankruptcies, suicides, divorces, domestic violence, child abuse and child neglect.

Increased bankruptcies

Bankruptcies in the mid- and late-1990s have approached record levels despite this period of robust and sustained economic growth.

A national study found that counties having at least one gambling operation averaged 18 percent higher bankruptcies than counties without gaming.

Nevada - the 35th most populous state - ranks fourth in total bankruptcies.

Gambling-related bankruptcies in metro Detroit increased as much as 40 fold within a year and a half of the opening of Casino Windsor.

Increased suicides

In Gulfport, Miss., suicides increased 213 percent (from 24 to 75) in the first two years after casinos arrived.

In neighboring Biloxi, suicide attempts jumped 1,000 percent (from 6 to 66) in the first year alone.

The National Council on Problem Gambling, citing various studies, concludes that one in five pathological gamblers attempt suicide - a rate higher than any other addictive disorder.

A survey of nearly 200 Gamblers Anonymous members in Illinois found 79 percent wanted to die, 66 percent had contemplated suicide and 45 percent had a definite plan to kill themselves.

Increased divorces

Nearly three out of every 10 Gamblers Anonymous members reported being separated or divorced as a direct result of their gambling.

A nationwide survey of divorced adults found "2 million adults identified a spouse's gambling as a significant factor in their prior divorce."

The number of divorces in Harrison County, Mississippi - home to 10 casinos - has increased by almost 300 percent since the introduction of casinos.

Increased domestic violence

National Research Council studies indicate between 25 and 50 percent of spouses of compulsive gamblers have been abused.

Mississippi domestic violence shelters reported increases between 100 percent and 300 percent in requests for assistance after casinos were established on Mississippi's Gulf Coast.

A University of Nebraska Medical Center study concluded that problem gambling is as much a risk factor for domestic violence as alcohol abuse.

Increased child abuse and neglect

The National Gambling Impact Study Commission said: "Children of compulsive gamblers are often prone to suffer abuse, as well as neglect, as a result of pathological gambling."

In Indiana, the state's gaming commission records revealed 72 children found abandoned on casino premises during a 14-month period.

An Illinois mother suffocated her infant daughter in order to collect insurance money to continue gambling.

So what?

Why does our governor think Hawaii residents would be immune from the consequences of legalized gambling?

And why is there so little discussion of the harms associated with gambling as public policy leaders debate the future of casinos in our state?

The stakes are high. Real lives and real families will be affected.

Taxpayers should demand that Hawaii's governor and legislature do their homework and study the social and economic costs of gambling.

Is the social wreckage of ruined families and lives really worth it? Are the efforts to clean up and revitalize the ohana atmosphere of Kona meaningless? Who will pay for added social services? Will the economic struggles of local merchants be compounded by a singular focus on gambling? Are taxpayers willing to gamble that unemployment will actually go down as a casino operation becomes the focal point of the local economy? Or will it go up as mom and pop restaurants and small retail shops find it impossible to compete with the glitz and glamour of a casino?

Like the practice of medicine, the old adage, "first, do no harm" applies here in no uncertain terms.

Joanne Ralston

Ralston served nearly eight years as corporate public affairs director of Del Webb Corp., which then owned and operated seven casinos in Nevada and New Jersey. Her experience includes direct liaison with regulators in both states. She has resided in Kapaau for two years.

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