Shipboard Gaming

Authorizes shipboard gaming on vessels in state waters.
Establishes the Hawaii gaming board within the department of
commerce and consumer affairs, for administrative purposes,
consisting of 6 members to be appointed by the governor.  Imposes
a $    admission tax for each gamer and a twelve per cent
wagering tax on the adjusted gross receipts.  Establishes a
gaming fund into which shall be deposited all revenue earned.
Requires periodic assessment and audits by the state auditor;
permits shipboard gaming at the option of the counties.

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Tourism is still the number one industry in
 2 Hawaii as there is no other industry that can readily match its
 3 capacity to generate continuing revenue.  But Hawaii's struggle
 4 in recent years to remain competitive with other "sun and sand"
 5 resort destinations has challenged the legislature to look beyond
 6 traditional means to attract mainland and global visitors.  With
 7 the new convention facility a reality, it is imperative that
 8 Hawaii aggressively compete in the world market.
 9      To be competitive in the international market place, Hawaii
10 must offer some type of gaming entertainment.  Shipboard gaming
11 would create a viable and unique visitor experience while
12 providing thousands of local jobs.  In addition, recent studies
13 have shown that shipboard gaming would generate hundreds of
14 millions of dollars, thereby expanding the state's economy.
15      The legislature has received a mandate from the electors of
16 the State of Hawaii to address the massive shortfall of revenue
17 that is threatening county and state programs and economic
18 growth.  To maintain much-needed social programs, guarantee
19 quality education, expand economic growth, and compete in the

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                                     H.B. NO.           

 1 ever more competitive global tourism market, the State should
 2 address these needs by enacting shipboard gaming.
 3      The purpose of this Act is to establish a regulatory
 4 framework for the conduct of legal shipboard gaming in Hawaii.
 5      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 6 a new chapter to be appropriately designated and to read as
 7 follows:
 8                             "CHAPTER
 9                         SHIPBOARD GAMING
10         -1  Legislative intent.  This chapter is intended to
11 benefit the people of the State of Hawaii by creating a new
12 revenue source, shipboard gaming, that will enhance investment,
13 development, and tourism in Hawaii.  As shipboard gaming can be
14 successful only if public confidence and trust in the credibility
15 and integrity of the gaming operations and the regulatory process
16 are maintained, this chapter strictly regulates the facilities,
17 persons, associations, and practices related to gaming
18 operations.
19         -2  Shipboard gaming authorized.(a)  Shipboard gaming
20 operations and the system of wagering incorporated therein, as
21 defined in this chapter, are authorized to the extent that they
22 are carried out in accordance with this chapter.

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 1      (b)  Shipboard gaming may be conducted upon any territorial
 2 and archipelagic waters within the State.
 3         -3  Definitions.  As used in this chapter unless the
 4 context otherwise requires:
 5      "Adjusted gross receipts" means the gross receipts less
 6 winnings paid to wagerers.
 7      "Board" means the Hawaii gaming board.
 8      "Department" means the department of business, economic
 9 development, and tourism.
10      "Director" means the director of business, economic
11 development, and tourism.
12      "Dock" means the location where a gaming ship moors for the
13 purpose of embarking passengers for and disembarking passengers
14 from a gaming excursion.
15      "Gaming excursion" means an outing during which gaming may
16 be operated on a ship licensed under this chapter.
17      "Gaming ship" means a ship or boat that is licensed under
18 this chapter of sufficient size to safely, in accordance with
19 state, federal, and international law, accommodate no fewer than
20 one hundred persons, to provide gaming activity within the
21 territorial and archipelagic waters of the State.
22      "Gross receipts" means the total amount of money wagered or
23 exchanged for the purchase of chips, tokens, or electronic cards
24 by shipboard gaming patrons.

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                                     H.B. NO.           

 1      "Occupational license" means a license issued by the board
 2 to a person or entity to perform an occupation that the board has
 3 identified as requiring a license to engage in shipboard gaming.
 4      "Shipboard gaming" means the operation of games aboard a
 5 ship licensed under this chapter, including but not limited to
 6 baccarat, twenty-one, poker, craps, slot machine, video game of
 7 chance, roulette wheel, klondike table, punch-board, faro layout,
 8 keno layout, numbers ticket, push card, jar ticket, pull tab, or
 9 other game of chance that is authorized by the board as a
10 wagering device.
11         -4  Hawaii gaming board.  (a)  There is established
12 within the department, for administrative purposes only, the
13 Hawaii gaming board that shall administer, regulate, and enforce
14 the system of shipboard gaming established by this chapter.  Its
15 jurisdiction shall extend to every person, association,
16 corporation, partnership, and trust involved in shipboard gaming
17 operations in the State.
18      (b)  The board shall consist of five members to be appointed
19 by the governor with the advice and consent of the senate
20 pursuant to section 26-34.  Of the five members, two shall be
21 appointed from a list of nominees submitted by the president of
22 the senate, and two shall be appointed from a list of nominees

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                                     H.B. NO.           

 1 submitted by the speaker of the house of representatives.  The
 2 members shall elect one from among them to be the chairperson.
 3      (c)  The term of office of a board member shall be four
 4 years.  Vacancies in the board shall be filled for the unexpired
 5 term in like manner as the original appointments.
 6      (d)  Each member of the board shall receive $300 for each
 7 day the board meets and for each day the member conducts any
 8 hearing pursuant to this chapter.  Each member shall also be
 9 reimbursed for all actual and necessary expenses incurred in the
10 execution of official duties.
11      (e)  No person shall be a member of the board if:
12      (1)  The person or the person's spouse, child, or parent is,
13           an official of, or a person financially interested in,
14           or has a financial relationship with, any gaming
15           operation subject to the jurisdiction of the board; or
16      (2)  The person is not of good moral character or has been
17           convicted of, or is under indictment for, a felony
18           under the laws of Hawaii or any other state, or the
19           United States.
20      (f)  No board member shall hold any other public office.
21 Any member of the board may be removed by the governor for
22 neglect of duty, misfeasance, malfeasance, or nonfeasance in
23 office.

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                                     H.B. NO.           

 1         -5  Board members; bond requirement.  Before assuming
 2 the duties of office, each member of the board shall take an oath
 3 that the member shall faithfully execute the duties of office
 4 according to the laws of the State and shall file and maintain
 5 with the director a bond in the sum of $25,000 with good and
 6 sufficient sureties.  The cost of any bond for any member of the
 7 board under this section shall be considered a part of the
 8 necessary expenses of the board.
 9         -6  Staff.(a)  The board shall appoint, without regard
10 to chapters 76 and 77, an administrator who shall perform any and
11 all duties that the board shall assign.  The salary of the
12 administrator shall be determined by the board.  The
13 administrator shall keep records of all proceedings of the board
14 and shall preserve all records, books, documents, and other
15 papers belonging to the board or entrusted to its care.  The
16 administrator shall devote full time to the duties of the office
17 and shall not hold any other office or employment.
18      (b)  The board may employ personnel, including personnel
19 with law enforcement authority, as may be necessary to carry out
20 its duties.  No person shall be employed by the board who is, or
21 whose spouse, parent, or child is, an official of, or has a
22 financial interest in or financial relationship with, any

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                                     H.B. NO.           

 1 operator engaged in gaming operations within this State.  The
 2 employment of any employee violating these prohibitions shall be
 3 terminated.
 4         -7  Powers of the board.  The board shall have all
 5 powers necessary and proper to fully and effectively supervise
 6 all shipboard gaming operations, including but not limited to the
 7 following:
 8      (1)  To determine the types and numbers of shipboard gaming
 9           licenses to be permitted and the types and numbers of
10           ships a licensee may own under this chapter; provided
11           that the total number of ships operating under licenses
12           granted pursuant to this chapter shall not exceed four;
13      (2)  To adopt standards for the licensing of all persons to
14           issue licenses, and to establish and collect fees for
15           such licenses;
16      (3)  To provide for the collection of all fees and taxes
17           imposed pursuant to this chapter;
18      (4)  To enter the office, gaming ships, facilities, or other
19           places of business of a licensee, where evidence of the
20           compliance or noncompliance with this chapter is likely
21           to be found;
22      (5)  To investigate alleged violations of this chapter and
23           to take appropriate disciplinary action against a

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                                     H.B. NO.           

 1           licensee or a holder of an occupational license for a
 2           violation, or institute appropriate legal action for
 3           enforcement, or both;
 4      (6)  To be present, through its inspectors and agents, any
 5           time gaming operations are conducted on any shipboard
 6           for the purpose of certifying the revenue thereof,
 7           receiving complaints from the public, and conducting
 8           other investigations into the conduct of the shipboard
 9           gaming and the maintenance of the equipment as from
10           time to time the board may deem necessary and proper;
11      (7)  To adopt appropriate standards for all gaming ships and
12           facilities, as well as for electronic or mechanical
13           gaming devices;
14      (8)  To require that the records, including financial or
15           other statements of any licensee, be kept in a manner
16           as prescribed by the board and that any licensee
17           involved in the ownership or management of gaming
18           operations submit to the board:
19           (A)  An annual balance sheet and profit and loss
20                statement;
21           (B)  A list of the stockholders or other persons having
22                a ten per cent or greater beneficial interest in
23                the gaming activities of each licensee; and

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                                     H.B. NO.           

 1           (C)  Any other information the board deems necessary to
 2                effectively administer this chapter;
 3      (9)  To conduct hearings, issue subpoenas for the attendance
 4           of witnesses and subpoenas duces tecum for the
 5           production of books, records, and other pertinent
 6           documents, and to administer oaths and affirmations to
 7           the witnesses, when, in the judgment of the board, it
 8           is necessary to administer or enforce this chapter;
 9     (10)  To prescribe an employment application criteria to be
10           used by any licensee involved in the ownership or
11           management of shipboard gaming operations for hiring
12           purposes;
13     (11)  To eject, exclude, or authorize the ejection or
14           exclusion of, any person from shipboard gaming
15           facilities where the person is in violation of this
16           chapter or where the person's conduct or reputation is
17           such that the person's presence within the gaming ship
18           facilities, in the opinion of the board, may call into
19           question the honesty and integrity of the shipboard
20           gaming operation or interfere with the orderly conduct
21           thereof; provided that the propriety of that ejection
22           or exclusion is subject to subsequent hearing by the
23           board;

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                                     H.B. NO.           

 1     (12)  To permit licensees of gaming operations to use a
 2           wagering system whereby gamers' money may be converted
 3           to tokens, electronic cards, or chips that shall be
 4           used only for wagering aboard the gaming ship;
 5     (13)  To approve the routes of a gaming ship and the stops a
 6           gaming ship may make within the territorial and
 7           archipelagic waters of the State;
 8     (14)  To suspend, revoke, or restrict licenses, to require
 9           the removal of a licensee or an employee of a licensee
10           for a violation of this chapter or a board rule or for
11           engaging in a fraudulent practice;
12     (15)  To impose and collect fines of up to $5,000 against
13           individuals and up to $10,000 or an amount equal to the
14           daily gross receipts, whichever is greater, against
15           licensees for each violation of this chapter, any rules
16           adopted by the board, any order of the board, or any
17           other action which, in the board's discretion, is a
18           detriment or impediment to shipboard gaming operations;
19     (16)  To hire employees to gather information, conduct
20           investigations, and carry out any other tasks
21           contemplated under this chapter;
22     (17)  To establish minimum levels of insurance to be
23           maintained by licensees;

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                                     H.B. NO.           

 1     (18)  To establish, after consultation with the U.S. Army
 2           Corps of Engineers or the U.S. Coast Guard, as
 3           appropriate, binding emergency orders upon the
 4           concurrence of a majority of the members of the board
 5           regarding the navigability of the territorial and
 6           archipelagic waters of the State in the event of
 7           extreme weather conditions, acts of God, or other
 8           extreme circumstances;
 9     (19)  To delegate the execution of any of its powers for the
10           purpose of administering and enforcing this chapter and
11           rules adopted under this chapter;
12     (20)  To adopt necessary rules under chapter 91 to implement
13           this chapter; and
14     (21)  To take any other action as may be reasonable or
15           appropriate to enforce this chapter and rules adopted
16           under this chapter.
17        -8  Meetings of the board.  The board shall hold at least
18 one meeting each quarter of the State's fiscal year.  In
19 addition, special meetings may be called by the chairperson or
20 any two board members upon seventy-two hours written notice to
21 each member.  All board meetings shall be subject to chapter 92.
22 Three members of the board shall constitute a quorum, and a
23 majority vote of the members present and constituting a quorum

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                                     H.B. NO.           

 1 shall be required for any final determination by the board.  The
 2 board shall keep a complete and accurate record of all its
 3 meetings.
 4        -9  Annual report.  The board shall file a written annual
 5 report with the governor and the legislature on or before sixty
 6 days following the close of each fiscal year and such additional
 7 reports as the governor or the legislature may request.  The
 8 annual report shall include:
 9     (A)   A statement of receipts and disbursements by the board;
10     (B)   Actions taken by the board; and
11     (C)   Any additional information and recommendations that the
12           board may deem valuable or which the governor or the
13           legislature may request.
14        -10  Hearings by the board.(a)  Upon order of the
15 board, a board member or a hearings officer designated by the
16 board may conduct any hearing provided for under this chapter or
17 by rule and may recommend findings and decisions to the board.
18 The board member or hearings officer conducting the hearing shall
19 have all powers and rights granted to the board in this chapter.
20 The record made at the time of the hearing shall be reviewed by
21 the board, or a majority thereof, and the findings and decision
22 of the majority of the board shall constitute the order of the
23 board in that case.

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 1     (b)  Any party aggrieved by an action of the board denying,
 2 suspending, revoking, restricting, or refusing to renew a license
 3 may request a hearing before the board.  A request for a hearing
 4 shall be made to the board in writing within five days after
 5 service of notice of the action of the board.  Notice of the
 6 action of the board shall be served either by personal delivery
 7 or by certified mail, postage prepaid, to the aggrieved party.
 8 Notice served by certified mail shall be deemed complete on the
 9 business day following the date of such mailing.  The board shall
10 conduct all requested hearings promptly and in reasonable order.
11        -11  Disclosure of records.  (a)  Notwithstanding any law
12 to the contrary, the board on written request from any person,
13 shall provide information furnished by an applicant or licensee
14 concerning the applicant or licensee, or the applicant's or
15 licensee's products, services, or gaming enterprises, and
16 business holdings, as follows:
17      (1)  The name, business address, and business telephone
18           number of any applicant or licensee;
19      (2)  An identification of any applicant or licensee
20           including, if an applicant or licensee is not an
21           individual or partnership, the state of incorporation
22           or registration, the corporate officers, and the
23           identity of all shareholders or participants;

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                                     H.B. NO.           

 1      (3)  An identification of any business, including, if
 2           applicable, the state of incorporation or registration,
 3           in which an applicant or licensee or an applicant's or
 4           licensee's spouse or children has an equity interest of
 5           more than five per cent.  If an applicant or licensee
 6           is a corporation, partnership, or other business
 7           entity, the applicant or licensee shall identify any
 8           other corporation, partnership, or business entity in
 9           which it has an equity interest of five per cent or
10           more, including, if applicable, the state of
11           incorporation or registration;
12      (4)  Whether an applicant or licensee has been convicted,
13           pleaded guilty or nolo contendere, or forfeited bail
14           concerning any criminal offense under the laws of any
15           jurisdiction, either felony or misdemeanor (except for
16           traffic violations), including the date, name, and
17           location of the court, arresting agency, and
18           prosecuting agency, and the case number, the offense,
19           the disposition, and the location and length of
20           incarceration;
21      (5)  Whether an applicant or licensee has had any license or
22           certificate issued by a licensing authority in Hawaii
23           or any other jurisdiction denied, restricted,

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                                     H.B. NO.           

 1           suspended, revoked, or not renewed and a statement
 2           describing the facts and circumstances concerning the
 3           denial, restriction, suspension, revocation, or
 4           nonrenewal, including the licensing authority, the date
 5           each such action was taken, and the reason for each
 6           such action;
 7      (6)  Whether an applicant or licensee has ever filed or had
 8           filed against it a proceeding in bankruptcy or has ever
 9           been involved in any formal process to adjust, defer,
10           suspend, or otherwise work out the payment of any debt
11           including the date of filing, the name and location of
12           the court, and the case and number of the disposition;
13      (7)  Whether an applicant or licensee has filed, or been
14           served with a complaint or other notice filed with any
15           public body, regarding the delinquency in the payment
16           of, or a dispute over the filings concerning the
17           payment of, any tax required under federal, state, or
18           county law, including the amount, type of tax, taxing
19           agency, and time periods involved;
20      (8)  A statement listing the names and titles of all public
21           officials or officers of any unit of government, and
22           relatives of such public officials or officers who,
23           directly or indirectly, own any financial interest in,

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                                     H.B. NO.           

 1           have any beneficial interest in, are the creditors of
 2           or hold any debt instrument issued by, or hold or have
 3           any interest in any contractual or service relationship
 4           with, an applicant or licensee;
 5      (9)  Whether an applicant or licensee has made any political
 6           contribution, or any loans, donations, or other
 7           payments, to any candidate or office holder, within
 8           five years from the date of filing the application,
 9           including the amount and the method of payment;
10     (10)  The name and business telephone number of any attorney
11           representing an applicant or licensee in matters before
12           the board;
13     (11)  A description of any proposed or approved shipboard
14           gaming operation, including the type of ship, home dock
15           location, expected economic benefit to the community,
16           anticipated or actual number of employees, statement
17           from an applicant or licensee stating the applicant or
18           licensee is in compliance with federal and state
19           affirmative action guidelines, projected or actual
20           admissions, and projected or actual adjusted gross
21           gaming receipts; and
22     (12)  A description of the product or service to be supplied
23           by an applicant for a supplier's license.

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                                     H.B. NO.           

 1     (b)  Notwithstanding any law to the contrary, the board, on
 2 written request from any person, shall also provide the following
 3 information:
 4     (1)   The amount of the wagering tax and admission tax paid
 5           daily to the State by the holder of an owner's license;
 6     (2)   Whenever the board finds an applicant for an owner's
 7           license unsuitable for licensing, a copy of the written
 8           letter outlining the reasons for the denial; and
 9     (3)   Whenever the board has refused to grant leave for an
10           applicant to withdraw an application, a copy of the
11           letter outlining the reasons for the refusal.
12     (c)  Subject to the above provisions, the board shall not
13 disclose any information that would be barred by:
14     (1)   Chapter 92F; or
15     (2)   The statutes, rules, regulations, or intergovernmental
16           agreements of any jurisdiction.
17     (d)  The board may assess fees for the copying of information
18 in accordance with chapter 92F.
19        -12  Application for owner's license.(a)  A qualified
20 person may apply to the board for an owner's license to conduct a
21 shipboard gaming operation.  The application shall be made on
22 forms provided by the board and shall contain such information as
23 the board prescribes, including but not limited to:

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                                     H.B. NO.           

 1      (1)  The identity of the ship on which such gaming operation
 2           is to be conducted and the exact location where the
 3           ship will be docked or anchored off-shore within the
 4           territorial and archipelagic waters of the State;
 5      (2)  A certification that the ship will be registered under
 6           this chapter at all times during which gaming
 7           operations are conducted on board;
 8      (3)  Detailed information regarding the ownership and
 9           management of the applicant; and 
10      (4)  Detailed personal information regarding the applicant. 
11 Information provided on the application shall be used as the
12 basis for a thorough background investigation which the board
13 shall conduct with respect to each applicant.  An incomplete
14 application shall be cause for denial of a license by the board.
15      (b)  Applicants shall submit with their application all
16 documents, resolutions, and letters of support from the governing
17 body that represents the county wherein the licensee will dock or
18 anchor off-shore.
19      (c)  Each applicant shall disclose the identity of every
20 person, association, trust, or corporation having a greater than
21 five per cent direct or indirect pecuniary interest in the
22 shipboard gaming operation with respect to which the license is
23 sought.  If the disclosed entity is a trust, the application

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                                     H.B. NO.           

 1 shall disclose the names and addresses of the beneficiaries; if a
 2 corporation, the names and addresses of all stockholders and
 3 directors; if a partnership, the names and addresses of all
 4 partners, both general and limited.
 5      (d)  An application fee of $25,000 shall be paid at the time
 6 of filing to defray the costs associated with the background
 7 investigation conducted by the board, and the search and
 8 classification of fingerprints obtained by the board with request
 9 to the application.  If the costs of the investigation exceed
10 $25,000, the applicant shall pay the additional amount to the
11 board.  If the costs of the investigation are less than $25,000,
12 the applicant shall receive a refund of the remaining amount.
13 All information, records, interviews, reports, statements,
14 memoranda, or other data supplied to or used by the board in the
15 course of its review or investigation of an application for a
16 license shall be privileged, strictly confidential, and used only
17 for the purpose of evaluating an applicant.  The information,
18 records, interviews, reports, statements, memoranda, or other
19 data shall not be admissible as evidence, nor discoverable in any
20 action of any kind in any court or before any tribunal, board,
21 agency, or person, except for any action deemed necessary by the
22 board.

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                                     H.B. NO.           

 1      (e)  The licensed owner shall be the person primarily
 2 responsible for the ship itself.  Only one shipboard gaming
 3 operation may be authorized by the board on any ship.  The
 4 applicant shall identify each ship it intends to use and certify
 5 that the ship:
 6      (1)  Has the capacity required in this chapter;
 7      (2)  Is accessible to persons with disabilities; and
 8      (3)  Is fully registered and licensed in accordance with any
 9           applicable laws.
10      (f)  A person who knowingly makes a false statement on an
11 application is guilty of a petty misdemeanor.
12         -13  Owner's licenses.(a)  No person shall operate and
13 maintain a gaming ship in this State unless the person has first
14 obtained an owner's license from the board pursuant to this
15 section.  If the board finds that the applicant meets the
16 eligibility requirements, the board shall issue an owner's
17 license upon payment by the applicant of a $15,000 license fee
18 for the first year of operation.  An applicant shall not be
19 eligible to receive an owner's license if:
20      (1)  The person has been convicted of a felony under the
21           laws of this State, any other state, or the United
22           States;

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                                     H.B. NO.           

 1      (2)  The person has been convicted of any violation
 2           under part II, chapter 712, or substantially similar
 3           laws of another jurisdiction;
 4      (3)  The person has submitted an application for a license
 5           under this chapter that contains false information;
 6      (4)  The person is a member of the board;
 7      (5)  A person defined in paragraph (1), (2), (3), or (4) is
 8           an officer, director, or managerial employee of the
 9           firm or corporation;
10      (6)  The firm or corporation employs a person defined in
11           paragraph (1), (2), (3), or (4) who participates in the
12           management or operation of gaming operations authorized
13           under this chapter;
14      (7)  The person, firm, or corporation has more than a ten
15           per cent ownership interest in any entity holding an
16           owner's license issued under this chapter; or
17      (8)  A license of the person, firm, or corporation issued
18           under this chapter, or a license to own or operate
19           gaming facilities in any other jurisdiction, has been
20           revoked.
21      (b)  In determining whether to grant an owner's license to
22 an applicant, the board shall consider:

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                                     H.B. NO.           

 1      (1)  The character, reputation, experience, and financial
 2           integrity of the applicants and of any other or
 3           separate person that either:
 4           (A)  Controls, directly or indirectly, the applicant,
 5                or
 6           (B)  Is controlled, directly or indirectly, by the
 7                applicant or by a person that controls, directly
 8                or indirectly, the applicant;
 9      (2)  The facilities or proposed facilities for the conduct
10           of shipboard gaming;
11      (3)  The highest prospective total revenue to be derived by
12           the State from the conduct of shipboard gaming;
13      (4)  The financial ability of the applicant to purchase and
14           maintain adequate liability and casualty insurance;
15      (5)  Whether the applicant has adequate capitalization to
16           provide and maintain, for the duration of a license, a
17           shipboard gaming operation; and
18      (6)  The extent to which the applicant exceeds or meets
19           other standards for the issuance of an owner's license
20           which the board may adopt by rule.
21      (c)  Each applicant shall submit with the application, on
22 forms provided by the board, two sets of the applicant's
23 fingerprints.

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                                     H.B. NO.           

 1      (d)  In the application for an owner's license, the
 2 applicant shall specify the dock at which the gaming ship will be
 3 based and the area within the territorial and archipelagic waters
 4 of the State on which the gaming ship will operate.  In
 5 determining the territorial and archipelagic waters upon which
 6 gaming ships will operate with licenses, the board shall consider
 7 the economic benefit that shipboard gaming confers on the State
 8 and shall seek to ensure that all counties of the State share in
 9 the economic benefits of shipboard gaming.
10      (e)  In granting licenses, the board shall give favorable
11 consideration to applicants who have operated non-gaming ships in
12 Hawaii prior to the effective date of this act.  The board shall
13 also give favorable consideration to applicants presenting plans
14 which provide for significant economic development and applicants
15 licensed in other United States jurisdictions. The board shall
16 review all applications for owner's licenses, and shall inform
17 each applicant of the board's decision.
18      (f)  The board may revoke the owner's license if a licensee
19 fails to begin regular shipboard gaming excursions within twelve
20 months of receipt of the board's approval of the application upon

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                                     H.B. NO.           

 1 a finding by the board that license revocation is in the best
 2 interest of the State.
 3      (g)  Licenses shall be issued for a two-year period and
 4 shall be renewable annually upon payment of a $5,000 license fee
 5 and a determination by the board that the licensee continues to
 6 meet all of the requirements of this chapter.
 7      (h)  The board may authorize a licensee to own and operate
 8 up to two gaming ships per owner's license.
 9      (i)  The board shall establish a process to facilitate and
10 expedite the approval of the necessary licenses and permits.  The
11 board may establish its own procedures for the issuance of liquor
12 licenses for any holder of an owner's license under this chapter;
13 provided that all state laws and county ordinances relating to
14 liquor are met.
15      (j)  Nothing in this chapter shall be interpreted to
16 prohibit a licensed owner from operating a school for the
17 training of any occupational licensee.
18         -14  Bond of licensee.  Before an owner's license is
19 issued, the licensee shall file a bond in the sum of $200,000
20 with the department.  The bond shall be used to guarantee that
21 the licensee faithfully makes the payments, keeps books and
22 records, makes reports, and conducts games of chance in
23 conformity with this chapter and the rules adopted by the board.

Page 25                                                    2904
                                     H.B. NO.           

 1 The bond shall not be canceled by a surety on less than thirty
 2 days notice in writing to the board.  If a bond is canceled and
 3 the licensee fails to file a new bond with the board in the
 4 required amount on or before the effective date of cancellation,
 5 the licensee's license shall be revoked.  The total and aggregate
 6 liability of the surety on the bond shall be limited to the
 7 amount specified in the bond.
 8         -15  Supplier's licenses.(a)  No person shall furnish
 9 any equipment, devices, or supplies to a licensed shipboard
10 gaming operation unless the person has first obtained a
11 supplier's license pursuant to this section.  The board may issue
12 a supplier's license to any person, firm, or corporation who pays
13 a nonrefundable application fee of $50,000 upon a determination
14 by the board that the applicant is eligible for a supplier's
15 license and upon payment by the applicant of a $1,000 license
16 fee.  Supplier's licenses shall be renewable annually upon
17 payment of the $1,000 annual license fee and a determination by
18 the board that the licensee continues to meet all of the
19 requirements of this chapter.
20      (b)  The holder of a supplier's license may sell or lease,
21 or contract to sell or lease, gaming equipment and supplies to
22 any licensee involved in the ownership or management of gaming
23 operations.

Page 26                                                    2904
                                     H.B. NO.           

 1      (c)  Gaming supplies and equipment shall not be distributed
 2 unless supplies and equipment conform to standards adopted by
 3 rules of the board.
 4      (d)  A person, firm, or corporation shall not be eligible to
 5 receive a supplier's license if:
 6      (1)  The person has been convicted of a felony under the
 7           laws of this State, any other state, or the United
 8           States;
 9      (2)  The person has been convicted of any violation under
10           part II, chapter 712, or substantially similar laws of
11           another jurisdiction;
12      (3)  The person has submitted an application for a license
13           under this chapter that contains false information;
14      (4)  The person is a member of the board;
15      (5)  The firm or corporation is one in which a person
16           defined in paragraph (1), (2), (3), or (4) is an
17           officer, director, or managerial employee;
18      (6)  The firm or corporation employs a person defined in
19           paragraph (1), (2), (3), or (4) who participates in the
20           management or operation of shipboard gaming authorized
21           under this chapter; or
22      (7)  The license of the person, firm, or corporation issued
23           under this chapter, or a license to own or operate

Page 27                                                    2904
                                     H.B. NO.           

 1           gaming facilities in any other jurisdiction, has been
 2           revoked.
 3      (e)  A supplier shall:
 4      (1)  Furnish to the board a list of all equipment, devices,
 5           and supplies offered for sale or lease in connection
 6           with games authorized under this chapter;
 7      (2)  Keep books and records for the furnishing of equipment,
 8           devices, and supplies to gaming operations separate and
 9           distinct from any other business that the supplier
10           might operate;
11      (3)  File a quarterly return with the board listing all
12           sales and leases;
13      (4)  Permanently affix its name to all its equipment,
14           devices, and supplies for gaming operations; and
15      (5)  File an annual report listing its inventories of gaming
16           equipment, devices, and supplies.
17      (f)  Any person who knowingly makes a false statement on an
18 application is guilty of a petty misdemeanor.
19      (g)  Any gaming equipment, devices, or supplies provided by
20 any licensed supplier may either be repaired on the shipboard or
21 removed from the shipboard to a facility owned by the holder of
22 an owner's license for repair.  Any supplier's equipment,
23 devices, and supplies that are used by any person in an
24 unauthorized gaming operation shall be forfeited to the State.

Page 28                                                    2904
                                     H.B. NO.           

 1         -16  Occupational licenses.(a)  The board may issue an
 2 occupational license to an applicant upon the payment of a
 3 nonrefundable application fee as set by the board, upon a
 4 determination by the board that the applicant is eligible for an
 5 occupational license, and upon payment of an annual license fee
 6 in an amount set by the board.  To be eligible for an
 7 occupational license, an applicant shall:
 8      (1)  Be at least twenty-one years of age if the applicant
 9           will perform any function involved in gaming by
10           patrons.  Any applicant seeking an occupational license
11           for a nongaming function shall be at least eighteen
12           years of age;
13      (2)  Not have been convicted of a felony offense, or a
14           similar statute of any other jurisdiction, or a crime
15           involving dishonesty or moral turpitude;
16      (3)  Have met standards for the holding of an occupational
17           license as provided in rules adopted by the board,
18           including background inquiries and other requirements
19           similar to those for an owner's license.
20      (b)  Each application for an occupational license shall be
21 on forms prescribed by the board and shall contain all
22 information required by the board.  The applicant shall set forth
23 in the application whether the applicant:

Page 29                                                    2904
                                     H.B. NO.           

 1      (1)  Has been issued prior gaming-related licenses in any
 2           jurisdiction;
 3      (2)  Has been licensed in any other jurisdiction under any
 4           other name, and, if so, the name and the applicant's
 5           age at the time; or
 6      (3)  Whether or not a permit or license issued to the
 7           applicant in any other jurisdiction has been suspended,
 8           restricted, or revoked and, if so, for what period of
 9           time.
10      (c)  Each applicant shall submit with the application, two
11 sets of the applicant's fingerprints.  The board shall charge
12 each applicant a fee to defray the costs associated with the
13 search and classification of fingerprints obtained by the board
14 with respect to the application.
15      (d)  The board may refuse an occupational license to any
16 person:
17      (1)  Who is unqualified to perform the duties required of
18           such applicant;
19      (2)  Who fails to disclose or states falsely any information
20           called for in the application;
21      (3)  Who has been found guilty of a violation of this
22           chapter or whose prior gaming related license or

Page 30                                                    2904
                                     H.B. NO.           

 1           application therefor has been suspended, restricted,
 2           revoked, or denied for just cause in any other
 3           jurisdiction; or
 4      (4)  For any other just cause.
 5      (e)  The board may suspend, revoke, or restrict any
 6 occupational licensee:
 7      (1)  For any violation of this chapter;
 8      (2)  For any violation of the rules of the board;
 9      (3)  For any cause which, if known to the board, would have
10           disqualified the applicant from receiving the license;
11      (4)  For default in the payment of any obligation or debt
12           due to the State; or
13      (5)  For any other just cause.
14      (f)  A person who knowingly makes a false statement on an
15 application is guilty of a petty misdemeanor.
16      (g)  Any license issued pursuant to this section shall be
17 valid for a period of one year from the date of issuance and
18 shall be renewable annually upon payment of the annual license
19 fee and a determination by the board that the license continues
20 to meet all of the requirements of this chapter.
21      (h)  Any training provided for occupational licensees may be
22 conducted either on a licensed gaming ship or at a school with
23 which a licensed owner has entered into an agreement.

Page 31                                                    2904
                                     H.B. NO.           

 1         -17  Conduct of gaming.  Gaming may be conducted by
 2 licensed owners aboard gaming ships, subject to the following
 3 standards:
 4      (1)  Gaming shall be permitted after a vessel departs and
 5           gaming may continue during subsequent docking and
 6           reboarding;
 7      (2)  Gaming excursions shall not exceed five hours for a
 8           round trip; provided that the board, by rule, may
 9           provide for exceptions for inter-island cruises;
10      (3)  Minimum and maximum wagers on games shall be set by the
11           licensee;
12      (4)  Agents of the board may board and inspect any gaming
13           ship at any time for the purpose of determining
14           compliance with this chapter.  Every gaming ship, if
15           under way and being hailed by a law enforcement officer
16           or agent of the board, shall stop immediately and lay
17           to;
18      (5)  Employees of the board shall have the right to be
19           present on the gaming ship or on adjacent facilities
20           under the control of the licensee;
21      (6)  Gaming equipment and supplies customarily used in
22           conducting shipboard gaming shall be purchased or
23           leased only from suppliers licensed under this chapter;

Page 32                                                    2904
                                     H.B. NO.           

 1      (7)  Persons licensed under this chapter shall permit no
 2           form of wagering on games except as permitted by this
 3           chapter;
 4      (8)  Wagers may be received only from a person present on a
 5           licensed gaming ship.  No person present on a licensed
 6           gaming ship shall place or attempt to place a wager on
 7           behalf of another person who is not present on the
 8           gaming ship;
 9      (9)  Wagering shall not be conducted with money or other
10           negotiable currency, except for wagering on slot
11           machines;
12     (10)  A person under age twenty-one shall not be permitted on
13           an area of a gaming ship where gaming is being
14           conducted, except for a person at least eighteen years
15           of age who is an employee of the shipboard gaming
16           operation.  No employee under age twenty-one shall
17           perform any function involved in gaming by the patrons.
18           No person under age twenty-one shall be permitted to
19           make a wager under this chapter;
20     (11)  Gaming excursions shall be permitted only when the
21           territorial and archipelagic waters for which the ship
22           is licensed are navigable as determined by the board in
23           consultation with the U.S. Army Corps of Engineers or
24           the U.S. Coast Guard, as appropriate;

Page 33                                                    2904
                                     H.B. NO.           

 1     (12)  All tokens, chips, or electronic cards used to make
 2           wagers shall be purchased from a licensed owner either
 3           aboard a gaming ship or at an onshore facility that has
 4           been approved by the board and that is located where
 5           the gaming ship docks.  The tokens, chips, or
 6           electronic cards may be purchased by means of an
 7           agreement under which the owner extends credit to the
 8           patron.  The tokens, chips, or electronic cards may be
 9           used while aboard the gaming ship only for the purpose
10           of making wagers on authorized games; and
11     (13)  Gaming shall be conducted in accordance with all rules
12           adopted by the board.
13        -18  Collection of amounts owing under credit agreements.
14 Notwithstanding any law to the contrary, a licensed owner who
15 extends credit to a shipboard gaming patron may institute a cause
16 of action to collect any amounts due and owing under the
17 extension of credit, as well as the owner's costs, expenses, and
18 reasonable attorney's fees incurred in collection; provided that
19 all collections activity be subject to state and federal fair
20 debt collection practices.
21        -19  Wagering tax; rate; distribution.  A tax shall be
22 imposed on the adjusted gross receipts received from games
23 authorized under this chapter at the rate of twelve per cent.

Page 34                                                    2904
                                     H.B. NO.           

 1 The tax imposed by this section shall be paid by the licensed
 2 owner to the board on the last day of each month that the wagers
 3 were made and shall be deposited into the state gaming fund
 4 pursuant to section    -27.  The wagering tax imposed by this
 5 section shall be in lieu of all other state taxes on gross or
 6 adjusted gross receipts, except income taxes, including taxes
 7 levied under chapters 237 and 239.
 8        -20  Licensees; records; reports; supervision.(a)  A
 9 licensed owner shall keep books and records to clearly show:
10      (1)  The daily number of admissions and the amount of
11           admission tax payable each day;
12      (2)  The total amount of gross receipts; and
13      (3)  The total amount of the adjusted gross receipts.
14      (b)  The licensed owner shall furnish to the board reports
15 and information as the board may require with respect to its
16 activities on forms designed and supplied for such purpose by the
17 board.
18      (c)  The books and records kept by a licensed owner are
19 government records and the examination, publication, and
20 dissemination of the books and records shall be subject to
21 chapter 92F.
22         -21  Audit of licensee operations.  Within ninety days
23 after the end of each quarter of each fiscal year, the licensed

Page 35                                                    2904
                                     H.B. NO.           

 1 owner shall transmit to the board an audit of the financial
 2 transactions and condition of the licensee's total operations.
 3 All audits shall be conducted by certified public accountants
 4 selected by the board.  Each certified public accountant shall be
 5 registered and licensed to practice in this State.  The
 6 compensation for each certified public accountant shall be paid
 7 directly by the licensed owner to the certified public
 8 accountant.
 9         -22  Judicial review.  Jurisdiction and venue for the
10 judicial review of a final order of the board relating to
11 owner's, supplier's, occupational, shuttle service, or special
12 event licenses shall be vested in the circuit court of the
13 appropriate jurisdiction.  A petition for judicial review of a
14 final order of the board shall be filed within thirty days after
15 entry of the final order.
16         -23  Prohibited activities; penalty.(a)  A person is
17 guilty of a misdemeanor for any of the following:
18      (1)  Intentionally operating a gaming ship where wagering is
19           used or to be used without a license issued by the
20           board;
21      (2)  Intentionally operating a gaming ship where wagering is
22           permitted other than in the manner authorized under
23           this chapter;

Page 36                                                    2904
                                     H.B. NO.           

 1      (3)  Knowingly permitting a person under twenty-one years to
 2           make a wager; or
 3      (4)  Knowingly violating section    -17(12).
 4      (b)  A person wagering or accepting a wager at any location
 5 outside the gaming ship shall be subject to the penalties in
 6 sections 712-1220 to 712-1230.
 7      (c)  A person shall be barred for life from gaming ships
 8 under the jurisdiction of the board, if the person commits a
 9 class C felony and does any of the following:
10      (1)  Offers, promises, or gives anything of value or benefit
11           to a person who is connected with a gaming ship owner
12           including but not limited to an officer or employee of
13           a licensed owner or holder of an occupational license
14           pursuant to an agreement or arrangement or with the
15           intent that the promise or thing of value or benefit
16           will influence the actions of the person to whom the
17           offer, promise, or gift was made in order to affect or
18           attempt to affect the outcome of a gaming activity or
19           to influence official action of a member of the board;
20      (2)  Solicits or knowingly accepts or receives a promise of
21           anything of value or benefit while the person is
22           connected with a gaming ship including but not limited
23           to an officer or employee of a licensed owner, or

Page 37                                                    2904
                                     H.B. NO.           

 1           holder of an occupational license, pursuant to an
 2           understanding or arrangement or with the intent that
 3           the promise or thing of value or benefit will influence
 4           the actions of the person to affect or attempt to
 5           affect the outcome of a gaming activity, or to
 6           influence official action of a member of the board.
 7      (3)  Cheats at a gaming activity;
 8      (4)  Manufactures, sells, or distributes any cards, chips,
 9           dice, game, or device that is intended to be used to
10           violate this chapter;
11      (5)  Alters or misrepresents the outcome of a gaming
12           activity on which wagers have been made after the
13           outcome is made sure but before it is revealed to the
14           players;
15      (6)  Places a bet after acquiring knowledge, not available
16           to all players, of the outcome of the gaming activity
17           that is subject of the bet or to aid a person in
18           acquiring the knowledge for the purpose of placing a
19           bet contingent on that outcome;
20      (7)  Claims, collects, or takes, or attempts to claim,
21           collect, or take, money or anything of value in or from
22           the games, with intent to defraud, without having made
23           a wager contingent on winning a gaming activity, or

Page 38                                                    2904
                                     H.B. NO.           

 1           claims, collects, or takes an amount of money or thing
 2           of value of greater value than the amount won;
 3      (8)  Uses counterfeit chips or tokens in a gaming activity;
 4           or
 5      (9)  Possesses any key or device designed for the purpose of
 6           opening, entering, or affecting the operation of a
 7           gaming activity, drop box, or an electronic or
 8           mechanical device connected with the gaming activity or
 9           for removing coins, tokens, chips, or other contents of
10           a gaming activity.  This paragraph does not apply to a
11           gaming licensee or employee of a gaming licensee acting
12           in furtherance of the employee's employment.
13      (d)  An action to prosecute any crime occurring during a
14 gaming excursion shall be tried in the county of the dock at
15 which the gaming ship is based.
16         -24  Forfeiture of property.(a)  Except as provided in
17 subsection (b), any gaming ship used for the conduct of gaming in
18 violation of section    -17, shall be subject to section 712-
19 1222.5.  Every gaming device found on a ship operating games in
20 violation of this chapter shall be subject to seizure,
21 confiscation, and destruction.
22      (b)  It is not a violation of this chapter for a ship or
23 other watercraft that is licensed for gaming by a foreign nation

Page 39                                                    2904
                                     H.B. NO.           

 1 or another state or territory of the United States to dock on the
 2 shores of this State if the State has granted permission for
 3 docking; provided no gaming is conducted on the ship or other
 4 watercraft while it is docked on the shores of this State or
 5 traversing in the territorial and archipelagic waters of the
 6 State.  No gaming device shall be subject to seizure,
 7 confiscation, or destruction if the gaming device is located on
 8 such a ship or other watercraft.
 9         -25  Prohibited activities; civil penalties.  Any person
10 who conducts a gaming operation without first obtaining a license
11 to do so, or who continues to conduct such games after revocation
12 of the person's license, or any licensee who conducts or allows
13 to be conducted any unauthorized games on a ship where it is
14 authorized to conduct its shipboard gaming operation, in addition
15 to other penalties provided, shall be subject to a civil penalty
16 equal to the amount of gross receipts derived from wagering on
17 the games, whether unauthorized or authorized, conducted on that
18 day as well as confiscation and forfeiture of all gaming
19 equipment used in the conduct of unauthorized games.
20         -26  Criminal history record information.  Whenever the
21 board is authorized or required by law to consider some aspect of
22 criminal history record information for the purpose of carrying
23 out its statutory powers and responsibilities, upon request from

Page 40                                                    2904
                                     H.B. NO.           

 1 the board, the Hawaii criminal justice data center shall furnish
 2 such information contained in its files.
 3         -27  The state gaming fund; disposition of taxes
 4 collected.(a)  There is established within the state treasury
 5 the state gaming fund, into which shall be deposited all fees,
 6 taxes, and fines collected under this chapter which shall be used
 7 for expenses incurred for the administration and enforcement of
 8 this chapter.  All amounts exceeding       per cent of the total
 9 collections each quarter shall be deposited to the credit of the
10 general fund.
11      (b)  In addition to the annual report required under section
12    -9, the board shall submit to the legislature prior to the
13 convening of each regular session, a comprehensive financial
14 report detailing:
15      (1)  The revenues collected from the taxes, fees, and fines
16           imposed under this chapter; and
17      (2)  The amounts allocable to administrative and enforcement
18           costs.
19         -28  Legislative oversight.(a)  Beginning with the
20 second fiscal year after gaming activities commence, the auditor
21 shall conduct a biennial financial and social assessment of
22 shipboard gaming operations.  In conducting the assessment, the
23 auditor shall identify the financial impacts of shipboard gaming

Page 41                                                    2904
                                     H.B. NO.           

 1 on the state economy and the social impacts of gaming upon the
 2 community.  The auditor shall submit a report of findings and
 3 recommendations to the legislature prior to the convening of the
 4 next regular session after the biennial assessment is completed.
 5      (b)  Beginning with the second fiscal year after gaming
 6 activities commence, the auditor shall conduct a program and
 7 financial audit of the Hawaii gaming board.  Thereafter, the
 8 auditor shall conduct a program and financial audit every four
 9 years after the first audit is completed."
10      SECTION 3.  Section 36-30, Hawaii Revised Statutes, is
11 amended by amending subsection (a) to read as follows:
12      "(a)  Each special fund, except the:
13      (1)  Transportation use special fund established by section
14           261D-1;
15      (2)  Special summer school and intersession fund under
16           section 302A-1310;
17      (3)  School cafeteria special funds of the department of
18           education;
19      (4)  Special funds of the University of Hawaii;
20      (5)  State educational facilities improvement special fund;
21      (6)  Special funds established by section 206E-6;
22      (7)  Aloha Tower fund created by section 206J-17;

Page 42                                                    2904
                                     H.B. NO.           

 1      (8)  Domestic violence prevention special fund under section
 2           321-1.3;
 3      (9)  Spouse and child abuse special account under section
 4           346-7.5;
 5     (10)  Spouse and child abuse special account under section
 6           601-3.6;
 7     (11)  Funds of the employees' retirement system created by
 8           section 88-109;
 9     (12)  Unemployment compensation fund established under
10           section 383-121;
11     (13)  Hawaii hurricane relief fund established under chapter
12           431P;
13     (14)  Convention center capital and operations special fund
14           established under section 206X-10.5;
15     (15)  Hawaii health systems corporation special funds;
16     (16)  Tourism special fund established under section 201B-11;
17     (17)  Compliance resolution fund established under section
18           26-9;
19     (18)  Universal service fund established under chapter 269;
20     (19)  Integrated tax information management systems special
21           fund;
22     (20)  Insurance regulation fund under section 431:2-215;

Page 43                                                    2904
                                     H.B. NO.           

 1     (21)  Hawaii tobacco settlement special fund under section
 2           328L-2; [and]
 3     (22)  Emergency and budget reserve fund under section 328L-3;
 4           and
 5     (23)  State gaming fund under section    -27;
 6 shall be responsible for its pro rata share of the administrative
 7 expenses incurred by the department responsible for the
 8 operations supported by the special fund concerned.
 9      SECTION 4.  Section 712-1222.5, Hawaii Revised Statutes, is
10 amended by amending subsection (3) to read as follows:
11      "3)  This section shall not apply to gambling activity
12 [conducted] during travel from foreign nations or another state
13 or territory of the United States to the point of first entry
14 into state waters or during travel to foreign nations or another
15 state or territory of the United States from the point of final
16 exit from state waters; provided that nothing herein shall
17 preclude prosecution for any offense under this part.
18      Except as specifically provided in chapter    , this part
19 shall not apply to gaming activity authorized on ships licensed
20 under chapter    ."
21      SECTION 5.  If any person commences a proceeding in any
22 court of competent jurisdiction to extend any provision of this
23 Act to allow shipboard gaming as defined in this Act on any land,

Page 44                                                    2904
                                     H.B. NO.           

 1 on or in any building, structure, or improvement attached to or
 2 on land within the jurisdiction of the State, or if any person
 3 contests, challenges, or defends against any prosecution or claim
 4 that no provision of this Act allows shipboard gaming as defined
 5 in this Act on any land, on or in any building, structure, or
 6 improvement attached to or on land within the jurisdiction of the
 7 State, the commencement of the proceeding, prosecution, or claim
 8 shall be deemed to be public notice that this Act shall be
 9 repealed on the date that a court of competent jurisdiction
10 issues a final order that would allow shipboard gaming on land,
11 on or in any building, structure, or improvement attached to or
12 on land.
13      This Act shall be repealed on the date that a court of
14 competent jurisdiction issues a final order that would allow
15 shipboard gaming on land, on or in any building, structure, or
16 improvement attached to or on land.
17      SECTION 6.  Statutory material to be repealed is bracketed.
18 New statutory material is underscored.
19      SECTION 7.  This Act shall take effect upon its approval and
20 shall be repealed on December 31, 2008.
22                         INTRODUCED BY:___________________________