Lottery bill is passed by Senate education committee

By Kate Northrop

A bill that advocates for the creation of a state lottery was approved by the Hawaii Senate Education Committee on Wednesday, which means that the state is one step closer to potentially operating its own lottery.

Following Alabama, Hawaii is the latest state to push a lottery bill to the Senate Judiciary to further the discussion of starting a lottery that could generate additional revenue for the state.

The bill details a plan to implement a lottery and maintains a focus on funding public education. More specifically, 40% of all revenue generated will equally fund public school operations, university facilities and operations, and the general state fund. At least 45% of all revenue would be paid out in prizes, while the remaining 15% would be used to operate the lottery.

The proposal also originally indicated a launch date of Jan. 1, 2022, but Senate Education Committee Chairwoman Michelle Kidani amended the bill and pushed the date a year back to Jan. 1, 2023 so that there would be more time for a task force and a would-be lottery commission to strategize and plan for the venture.

"We are looking at this very carefully," Kidani reassured. "We don't want this to be a fly-by-night operation. It will be vetted, it'll have a five-member commission, the director will be appointed by the governor and confirmed by the Senate. And, of course, like anything else, if it's not going to pan out, then we have to look at it again."

However, Hawaiians in favor of a lottery might not want to get their hopes up too soon. It is unclear whether a lottery would actually see the light of day given the opposition to gambling in the state. Next to Utah, Hawaii is the only other state to ban all legalized forms of commercial gaming that operate on a "house." In other words, "social" gambling is allowed as long as there is no overarching entity that is profiting from the games.

Honolulu Prosecuting Attorney Steve Alm was among those who strongly opposed the implementation of a state lottery and stated that lotteries risk "fuel[ing] excessive gambling problems" while simultaneously profiting mostly "from people of lower educations and lower socioeconomic standing."

"Despite the substantial hardship of steering Hawaii's economic recovery in the coming years, from the first global pandemic seen in over 100 years, the Department strongly urges the Legislature not to give in to temptation to introduce deleterious — albeit lucrative — industries such as legalized gambling into Hawaii's communities," Alm wrote in testimony.

Tom Yamachika, President of the Tax Foundation of Hawaii, also argued against the bill and echoed Alm's statements.

"There are studies where researchers have concluded that lotteries have a reverse 'Robin Hood' effect, namely they take from the poor and give to the rich," Yamachika stated. "And this is because for a lot of people who are poor, they don't see the way to get out of their situation except by winning the lottery."

Others argue that the extra funds generated by the lottery are all-too necessary, especially since Governor David Ige proposed budget cuts in response to the COVID-19 pandemic for the Department of Education of $270 million over the next two years. Included in the cuts are potential "labor savings," which could translate to teacher furloughs.

"Our public schools cannot sustain these dramatic cuts, while simultaneously ensuring the delivery of [a] quality K-12 public education system," Superintendent of Schools Christina Kishimoto stated. She emphasized the need for additional methods of education funding in light of the potential budget cuts but was neutral toward the bill.

Funds are desperately needed in other areas as well. The Chief Financial Officer of the University of Hawaii, Kalbert Young, cited a backlog for maintenance projects that exceed $500 million. He also expressed neutrality toward the bill.

Senator Kidani hopes that the time is right for Hawaii to adopt a state lottery and that the public will support the idea.

"But again, we don't know if we don't try," she added. "I'm thinking, as we talk about gambling bills before, that, maybe this will not be something that is as heavy as a casino but will have some substance to it being just a lottery."