When it comes to growing the economy and raising revenues, the 30th Legislature needs to learn to work smarter, not harder. Since no one else wants to say it, I will: it’s time for a state lottery system, casinos and legalized, taxable gambling in Hawaii.

The official position of most local state and county agencies when it comes to gambling is almost perfectly captured by the Department of Business, Economic Development and Tourism’s recent testimony to the House Judiciary Committee on a bill that merely proposed to study online sports gaming:

“DBEDT believes that legalized gambling in any form puts at risk the values that make Hawaii the Aloha State. Specifically, there are too many unintended social and economic impacts that may outweigh the perceived benefits.”

Hawaii doesn’t have to become Las Vegas, but it should tap some of the revenue from legal gambling that it’s currently leaving on the table. Anthony Quintano/Civil Beat

Private individuals and family values nonprofit organizations have also made compelling emotional arguments against gambling in any form in Hawaii; for years, nearly every hearing at the Legislature on the topic draws testimonies warning of addictions, broken homes, increased alcoholism, prostitution and seniors squandering their Social Security money.

The social impacts of lotteries in particular and gambling in general have been studied for decades. No Hawaii task force or technical research paper is needed. We also know that problem gambling is associated with, but does not necessarily lead to, problems in substance abuse, particularly among minorities.

These studies, however, nearly always come with a paternalistic, discriminatory spin on them which imply that “vulnerable populations” like African-Americans, Hispanics, Filipinos or Native Americans somehow need to be sheltered by government or isolated from temptation, lest they will engage in risky behavior. One could just as easily make the specious and absurd argument that Ivy League institutions should be abolished, because they sucker poor students into costly degree programs that drain their disposable income and create massive debt.

I’d rather take the money out of a lottery than out of the paychecks of overburdened waiters, hotel workers, nurses, construction workers, teachers and civil servants.

Market activity is like water in a river; when obstructed, it will always spill over into black markets or find somewhere else to go. Whatever one might believe about the morality of gambling, the fact of the matter is that a disparity exists when an economic activity is illegal in one jurisdiction but legal in another within the same country.

It is estimated that out of the 42 million visitors to Las Vegas each year, some 300,000 of them are from Hawaii. Despite all of the public opposition and rancor against gambling in Hawaii, someone is obviously still going to Las Vegas when no one else is looking.

Like our other problem of locals fleeing overpriced Hawaii to live on the mainland, the fact that gambling is illegal in Hawaii but legal in Las Vegas is causing an exodus of money and potential tax revenue that our state is foolish to acquiesce to.

With the Hawaii Department of Education alone set to spend in excess of $2 billion dollars in the coming fiscal year, it is unreasonable, if not draconian, to involuntarily place the whole burden of government on regressive means of collecting revenue.

Taxing the things people vitally need – housing, fuel, vehicles, professional services, income – slows the economy because it increases the cost of living, working and doing business. Taxing gambling and other similar recreational activities is a much more equitable option because it taxes non-vital activities and products that consumers already expect to pay a premium price on.

Beggars Can’t Be Choosers

Hawaii is dependent on visitors and tourists for our way of life. The military may be a significant source of income, but that is an unreliably volatile benefactor as political or economic shifts could easily result in the force structure demobilizing or moving elsewhere. And apart from legalizing cannabis, you can forget about a new agricultural boom in Hawaii because the Legislature, for all its talk, is giving that shrinking industry lip service.

Beggars can’t be choosers. We need to act pragmatically, not philosophically, in times like these. There is only one guaranteed way to extract revenue for growing government without scalping Hawaii taxpayers, and that is legalized gambling.

I don’t agree with Gov. David Ige’s massive spending and infrastructure proposals, but if we absolutely must pay for them, I’d rather take the money out of a lottery than out of the paychecks of overburdened waiters, hotel workers, nurses, construction workers, teachers and civil servants. We could even pay for the troubled rail with a lottery.

Contact Key Lawmakers

Hawaii is the navel of the Pacific Ocean and the most beautiful vacation destination in the world. We can keep our locals from going to Las Vegas, pull tourists from Macau, and draw wealthy visitors from all of Asia if we legalize casinos and gaming.

If communist regimes and Muslim countries can make special administrative regions for the indulgence of highly affluent visitors engaging in profitable activities, it seems unreasonable that a state as tolerant as Hawaii needs to have cultural police to prevent gambling. If necessary, Hawaii could even carve out a special zone where legal gambling could take place.

Legislators need to stop trying to squeeze oil from a stone with one overpriced, half-baked economic stimulus proposal after another. The saying goes that “the house always wins.” If the objective is to strip Daddy Warbucks of his cash to redistribute wealth, do it equitably with legalized gambling, rather than socialism.

Let’s not waste another session. Just legalize it. Are you in or are you out?

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