A Hawaiian lawmaker is proposing a ban on Nevada casino companies advertising in the state, arguing that Hawaii carries an economic burden due to problem gambling as residents make hundreds of thousands of trips annually to gamble in Las Vegas.
Senate Bill 935, introduced by Democratic Hawaii state Senator Stanley Chang, would prohibit advertisements, including on television or online, for Nevada hotels, resorts, or other services that promote gambling or gambling devices licensed by the Nevada Gaming Commission.
Chang’s measure would also impose a 30 percent excise tax on those “engaged in the arrangement, provision or sale within the state of vacation packages or gambling devices that is not prohibited by state law.”
He noted that for Hawaii residents, gambling is as popular as it is in the rest of the country, but it remains illegal within the state. That makes Hawaii a target market “for a growing number of jurisdictions where gambling is legal.”
“Hawaii residents generate hundreds of millions of dollars, perhaps billions, in economic activity in other jurisdictions related to gambling, and in return, Hawaii receives no benefit,” Chang said in his proposed legislation.
Chang’s bill also highlights that Hawaii residents take an estimated 300,000 trips to Las Vegas and other gambling markets each year, with many residents making multiple trips per year.
Las Vegas is so popular with residents that it is known as Hawaii’s “ninth island.”
According to the Las Vegas Convention and Visitors Authority (LVCVA), 310,626 people traveled from Hawaii to Las Vegas in 2021, a substantial increase from the 107,831 arriving passengers in 2020 as coronavirus restrictions caused visitor numbers to decline significantly.
Travel from Hawaii to Las Vegas hit a five-year high of 335,488 in 2019.
Total visitor spending reached $36.1bn in 2021, according to the LVCVA’s latest figure. The agency does not break down visitor spending by U.S. state.
Chang’s measure also highlights the importance of the Hawaii market to Boyd Gaming, saying the Las Vegas gaming company earned about $600m from the state annually in 2011.
In a 2021 annual investor report, Boyd highlighted that customers from the Hawaiian market comprised more than half the room nights sold at the California, the Fremont, and Main Street Station properties in downtown Las Vegas and that decreases in the Hawaiian market “could adversely affect their business and financial condition.”
A Boyd spokesman said Monday (January 30) that the company has no comment on Chang’s proposal at this time.
Keith Smith, Boyd’s chief executive, told analysts during a third-quarter earnings conference call in October that the casino operator saw strong growth from its Hawaiian guests.
“While overall visitation from our Hawaiian guests is still below pre-pandemic levels, total play from Hawaiian guests was 7 percent higher than the third quarter of 2019,” Smith told analysts.
Overall, for the first nine months of 2022, revenue from the company’s downtown Las Vegas casinos was $152.89m. Boyd is scheduled to report its fourth-quarter and 2022 results on Thursday (February 2).
Every year, members of the Hawaii legislature introduce gaming bills seeking to legalize sports betting, a lottery, or even proposals for land-based casinos. But none of the recent gambling-related bills have garnered enough support to pass either chamber of the state legislature.
The state is one of two, alongside Utah, where all forms of gambling remain illegal.
That has not deterred Representative John Mizuno, a Democrat, who has introduced measures to allow for a single, standalone sportsbook and cardroom to be licensed for ten years on the island of Oahu, which is home to the state capital, Honolulu.
Mizuno also introduced House Bill 344 to legalize mobile sports betting in Hawaii, which has been referred to the House Committee on Economic Development. The bill does not include a tax rate or license fee for mobile wagering, which should be worked out in committee.
In February 2022, Mizuno introduced House Bill 1815, which along with House Bill 1973 would have legalized sports betting, but neither piece of legislation ever received a committee hearing.
Opponents have successfully argued that legalizing gambling in Hawaii would create crime, and increase personal bankruptcy and rates of problem gambling.
In his bill to ban casino advertisements, Chang quotes a National Council on Problem Gambling estimate from 2016 of 25,000 state residents that can be classified as problem gamblers. Hawaii also remains one of ten states that does not fund problem gambling treatment and prevention.