H.R. NO.
















     WHEREAS, horse racing began in Hawaii in the late nineteenth century.  The Hawaiian Jockey Club was founded in 1872 by King Kalakaua.  It was the Hawaiian Jockey Club that brought order out of the irregular conduct of the early races and organized the sport according to the rules that governed races elsewhere.  Among the original members of the club were such prominent personages as King Kalakaua, Governor John Owen Dominis, Samuel Parker, Major Cornwell, and A.S. Cleghorn; and


     WHEREAS, prior to the Second World War, horse racing was an active pursuit for a great many people for recreation and employment on the Big Island.  On Oahu, horse racing officially began in 1939 when the Oahu Jockey club was incorporated and the Kailua race track was constructed.  According to newspaper accounts, modern horse racing on Oahu flourished until 1952.  The sport of horse racing enjoyed the hearty patronage of King Kalakaua V.  The anniversary of the birth of Kamehameha the Great was first made a legal holiday on June 11, 1872, the occasion being celebrated by horse races at Kapiolani Park.  A few years later, the races were held on a regular mile course, and on every recurring holiday, crowds gathered there to enjoy racing and trotting events.  Attempts to conduct horse racing at Kapiolani Park failed in 1949, and a bill to permit horse racing on Maui failed to pass the House of Representatives in 1959; and


     WHEREAS, during this time, Hawaii's economy depended heavily on agriculture, exporting sugar cane and pineapples, but since then, tourism has taken over to become the State's number one industry; and


     WHEREAS, as the Legislature contemplates different alternatives to revitalize Hawaii's economy, it is clear that the State needs to diversify Hawaii's economy and expand other industries, in order to assure that economic downturns in other areas do not have such a great impact on our own economy.  Other industries the Legislature has attempted to provide additional support for include green, high-return, high-technology, and agricultural industries; and


     WHEREAS, the Legislature believes that the time has come to take a hard look at supporting a form of gaming in Hawaii, and parimutuel wagering on horse racing is a well-regulated, economically-advantageous, fair, and industry-diversifying alternative to other forms of gaming; and


     WHEREAS, horse racing has a long and honorable international history.  Parimutuel wagering is a popular and widespread form of legalized gambling in the United States and is approved in forty states.  Parimutuel horse racing and facilities are operated by private groups under strict federal and state government regulation and law enforcement.  The industry is also regulated by the Thoroughbred Racing Association, the Thoroughbred Racing Protective Bureau, the United States Trotting Association, and the Association of Racing Commissioners International; and


     WHEREAS, from an economic standpoint, a fully-operating track will employ more than six thousand employees in well-paying union jobs.  In areas where a race track was built, this industry has spawned the development of many small businesses.  It has been estimated that one hundred thousand new jobs have been created in cities with race tracks; and


     WHEREAS, race track activities include betting, which is classified as "parimutuel", as opposed to casino gambling.  With parimutuel betting, approximately eighty per cent is paid out to the players (which is the reason for the established odds), while ten per cent is paid to the State in taxes and the remaining ten per cent is applied to track expenses.  Casino gambling, on the other hand, pays eighty per cent to the house with ten per cent paid to the players; and


     WHEREAS, development of a parimutuel horse racing industry in Hawaii would encourage agriculture and the breeding of horses in this State, along with generating employment and economic development opportunities in the veterinary and farming services, among others, as well as provide a landscape reminiscent of the days when the paniolos were prominent.  A horse racing facility could even be included in the planning and development of an international sports complex in Hawaii; and


     WHEREAS, additionally, the development of a horse racing industry would serve to bolster the State's key tourism industry by providing increased sources of revenue from newly-generated business, hotel, restaurant, and airline activities.  The State is currently losing revenues as many residents travel to other states to observe and wager on horse racing and participate in other casing gaming activities; and


     WHEREAS, horse racing, which is controlled and regulated by the State, will serve to prevent and deter unlawful bookmaking and gambling activities and will diversify Hawaii's economy, while also diversifying Hawaii's tourism industry; now, therefore,


     BE IT RESOLVED by the House of Representatives of the Twenty-fifth Legislature of the State of Hawaii, Regular Session of 2010, that the Department of Commerce and Consumer Affairs is requested to convene a Task Force to examine the establishment of parimutuel wagering for horse racing in Hawaii, including proposed legislation and a draft regulatory scheme; and


     BE IT FURTHER RESOLVED that the Legislature requests that the Task Force membership comprise seven persons with knowledge, interest, and proven expertise in one or more of the following fields:  equitation and operations of the horse racing industry, accounting, agriculture, commerce and trade, computer science, corporate management, economics, finance, law, law enforcement, tourism, marketing, and the parimutuel industry; and


     BE IT FURTHER RESOLVED that the Director of Commerce and Consumer Affairs is requested to appoint the task force members based on lists of candidates submitted by the Department of Business, Economic Development, and Tourism, the Governor, the President of the Senate, and the Speaker of the House of Representatives; and


     BE IT FURTHER RESOLVED that the Director of Commerce and Consumer Affairs is requested to submit a report to the Legislature no later than twenty days prior to the convening of the Regular Session of 2011, containing the findings and recommendations of the Task Force, including any proposed legislation and the draft regulatory scheme; and


     BE IT FURTHER RESOLVED that the Task Force members are requested to serve on a voluntary basis and to assume responsibility for any costs associated with their participation on the Task Force; and


     BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Governor, Director of Commerce and Consumer Affairs, and the Director of Business, Economic Development, and Tourism.









Report Title: 

Parimutuel Wagering; Gambling; DCCA; DBEDT