HONOLULU – Hawaii has always been known for its sun, sand and surf. It may soon add another attraction: slots.

Hawaii is one of the last two states with no legalized gambling, but lawmakers facing billion-dollar budget deficits and hunting for ways increase revenue are thinking about allowing casinos in tourist-filled Waikiki or on Native Hawaiian lands.

Proponents say casinos would draw much-needed new money and jobs into the long-troubled, tourism-dependent economy.

Tourists from the mainland would skip Las Vegas to sun on pristine beaches and take a turn at the roulette tables. Coveted high-rollers from Asia could avoid the long trans-Pacific flight, shortening their trip to the slots while also checking out the hula dancing.

And the hundreds of thousands of Hawaii residents who fly about six hours to Vegas would only have to jump in the car or hop a short flight to place a wager. Las Vegas is known around here as Hawaii’s ninth island, and hotels in Nevada cater to the state’s needs by serving island dishes and dealers wear flora aloha shirts.

“The populace here loves to gamble. Hawaii by nature is a gambling community,” said Honolulu resident Ricky Graves, who travels to Las Vegas two or three times a year, but fears that casinos in Hawaii could ruin families by making it too easy for them to gamble away their money.

Gambling opponents are urging state legislators to block casinos so that the islands can maintain their status as a family-friendly destination lacking the serious crime and social problems they say accompanies legalized gambling elsewhere.

“People don’t come here to be shut up in a casino to gamble,” said Dianne Kay, president of the Hawaii Coalition Against Legalized Gambling. “It would be sad if we destroyed the beautiful ambiance we have here.”

Islanders have a long history with gambling, dating back to the days of the Hawaiian kingdom when there was betting on horse racing, said Kale Gumapac, spokesman for the Native Hawaiian group Kanaka Council Moka o Keawe.

And illegal gambling is thriving today, with sports books, cock fighting and card houses the more popular forms. The Internet has also made gaming more accessible.

But the state’s natural attractions and its religious missionary history have instilled a sense among many that gambling shouldn’t intrude on one of the nation’s last holdouts against it. Utah is the only other state where gambling is illegal, though Nevada is just next door.

“People in Hawaii like gambling, but they realize it’s not a very good idea to legalize it,” said Dennis Arakaki, head of the Hawaii Family Forum and Hawaii Catholic Conference. “Gambling isn’t a good way to deal with your financial problems, either personally or as a state.”

Police say legal gambling would increase crimes such as prostitution and drug dealing.

It’s difficult to quantify the extent of the underground gambling operations, said Maj. Susan Dowsett of the Honolulu Police Department. The department made 40 gambling-related arrests and initiated 65 felony gambling cases in 2009, a fraction of overall arrests.

Gambling supporters dispute claims that legalized gambling would spread crime. They’re more focused on the potential for gambling to jump-start the economy, especially if a casino could get running within a year as they claim.

Legislators view gambling as a rare opportunity to raise money without having to hike taxes, although they may not have the votes to override a potential veto. Republican Gov. Linda Lingle has said she opposes the introduction of gambling.

Lawmakers pitch gambling bills nearly ever year, but the measures rarely advance through several committees as they have this year.

One plan would set up a gaming commission to issue one five-year license to a casino on Oahu, which advocates say would create some 4,000 jobs and bring $100 million a year into state coffers through taxes on the casino.

Another would allow casinos on Hawaiian lands, with 80 percent of tax revenues going toward Native Hawaiians. That money could be used for more Hawaiian homes, better health coverage and financing for startup businesses, Gumapac said.

A casino in Waikiki would only need to be allowed under state law. But gambling on Hawaiian lands would be reviewed by the federal government before it could start, according to the U.S. Department of the Interior.

Opening a casino in the tourist-heavy Waikiki would help rejuvenate businesses and create jobs, business owners said.

“If I were a tourist, I’m coming here for the weather, the culture, the sightseeing. But one night I might go to the casino, because what other entertainment is there to do at night?” said James Boersema, an investor of a Waikiki nightclub and restaurant.

April 2, 2009 12:27 AM ET

Source: MSN Money Central

HONOLULU (AP) – Hawaii’s tourism industry is now in a “crisis mode,” and the isle economy won’t improve until tourism recovers, according to a new report.

The 16-page Economic Report, commissioned by First Hawaiian Bank and released Wednesday, said the state’s economy is now in a “serious recession, one that is broader, deeper, and will likely last longer than average.”

“Hawaii tourism is now threatened like never before,” the report said.

Economist Leroy Laney interviewed 15 industry and community leaders in compiling the report that outlines the importance of the tourism industry to Hawaii.

“Foremost, the tourism industry has an overwhelming economic importance for Hawaii,” he wrote. “It is imperative that all possible actions be taken to remedy the situation. If that does not happen, or until it does, the Hawaii economy will remain anemic.”

“Employment in all sectors will be down, as will tax revenues, business profits, and overall economic well being,” he said.

The report urges the tourism industry should receive the highest priority in receiving stimulus funding.

“Until tourism gets well, the rest of the economy cannot,” Laney said. “And the Hawaii tourism industry is in a crisis mode now.”

Laney said while there may be some recovery in the visitor industry in 2010, the increase in arrivals will likely remain almost flat, in the very low single digits at best.

Don Horner, First Hawaiian Bank’s chairman and chief executive, said Laney’s analysis reflects the reality that Hawaii’s economy and overall employment base remains critically dependent on tourism.

“The study clearly confirms that the solution, certainly in the short term, to our rapidly rising unemployment, weakened tax revenues and challenged nonprofit community is to work as a community to ensure our visitor industry is healthy while we seek economic diversification,” Horner said.

Among the developments that have hit Hawaii’s tourism industry hard are:

_ Last year’s collapse of Aloha and ATA airlines.

_ Norwegian Cruise Line removing two ships from the interisland market.

_ Job losses at Molokai Ranch, Maui Land & Pineapple Co. and Gay & Robinson on Kauai.

_ Financial global meltdown, resulting in significant declines in lifetime savings, making long distance leisure travel more difficult.

Laney said three-quarters of the total isle jobs in 2007 were directly or indirectly linked to tourism.

“For every direct tourism job in Hawaii, there are likely to be about 1.6 other jobs that are created indirectly,” he said.

The Economic Report also touched on “attitudes about tourism” of visitors and residents. For visitors, heavy discounting “is making this an unprecedented time to visit, and this can be an advantage that counters the negative income effects of a serious global economic downturn.”

Laney said there is a strong unfounded perception of competition versus partnership between visitors and residents over limited resources.

“Often local residents view visitors as competing with them over resources, and identify tourists with negative effects such as Hawaii’s high cost of living and congestion,” he wrote. “But all regional economies must make a living, and it would be hard to invent a better export driver than tourism.”

He said tourism is clean and enhances local tradition, history and culture.

Laney said lawmakers and government officials are the most important people in determining the future of Hawaii tourism.

Even when the national economy recovers, it still could take awhile before things get better in Hawaii.

“We should bear in mind that long-distance travel to places like Hawaii will not likely be among the first things to recover when the economy starts to grow again,” he said.

Laney, a professor of economics and finance at Hawaii Pacific University, is an economic adviser to First Hawaiian Bank, where he had previously served as chief economist and senior vice president.

The Honolulu Adviser

Maui News

West Hawaii Today

The Garden Island

Hawaii Tribune Herald

Honolulu Star Bulletin