REPORT TITLE:
Shipboard Gambling


DESCRIPTION:
Authorizes casino gaming on floating vessels in state waters.
Adds language for an advisory referendum.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           477
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT
RELATING TO SHIPBOARD GAMING.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                             "CHAPTER
 
 5                         SHIPBOARD GAMING
 
 6      §   -1  Legislative intent.  An aggressive effort is needed
 
 7 to diversify Hawaii's revenue resources to meet the growing needs
 
 8 for education and human services funding.  The downturn in
 
 9 tourism has not only placed a strain on the economy and reduced
 
10 revenue, it has emphasized the need to diversify Hawaii's visitor
 
11 attractions if Hawaii is to remain a competitive destination.
 
12      Shipboard gaming has been legalized in six states bordering
 
13 the Missouri, Ohio, and Mississippi Rivers and at least fifteen
 
14 other states, from Texas to New Hampshire, are considering making
 
15 it legal. The Wall Street Journal estimated recently that
 
16 $1,000,000,000 in gross revenues was generated by U.S. waterborne
 
17 United States casinos in 1993. In Iowa alone, tax revenues from
 
18 ship-board gaming totalled  $44,216,776.  And while Louisiana has
 
19 had some regulatory challenges with riverboat gaming, state
 
20 revenues from this attraction have risen almost 400% in only one
 
21 year, for a total of $137,022,361.  Shipboard gaming is 
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 especially attractive because it provides a specific boundary
 
 2 where gaming may take place and allows for greater control by
 
 3 states.
 
 4      Federal law permits the use of gaming devices on interstate
 
 5 or foreign segments of voyages and on cruises-to-nowhere and
 
 6 intrastate segments of a voyage on state inland waters to the
 
 7 extent permitted by state statute. 
 
 8 
 
 9      §   -2  Shipboard gaming authorized.(a)  Shipboard gaming
 
10 operations and the system of wagering incorporated therein, as
 
11 defined in this chapter, are hereby authorized to the extent that
 
12 they are carried out in accordance with this chapter.
 
13      (b)  Shipboard gaming pursuant to this chapter may be
 
14 conducted upon any navigable waters within the State.
 
15      §   -3  Definitions.  As used in this chapter unless the
 
16 context otherwise requires:
 
17      "Adjusted gross receipts" means the gross receipts less
 
18 winnings paid to wagerers.
 
19      "Board" means the Hawaii gaming board.
 
20      "Director" means the director of business, economic
 
21 development, and tourism.
 
22      "Dock" means the location where a gaming ship moors for the
 
23 purpose of embarking passengers for and disembarking passengers
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 from a gaming excursion.
 
 2      "Gaming excursion" means an outing during which gaming may
 
 3 be operated on a ship licensed under this chapter.
 
 4      "Gaming ship" means a ship or boat licensed under this
 
 5 chapter to operate for the sole purpose of providing gaming
 
 6 excursions within the navigable territorial waters of the State.
 
 7      "Gross receipts" means the total amount of money exchanged
 
 8 for the purchase of chips, tokens, or electronic cards by
 
 9 shipboard gaming patrons.
 
10      "Occupational license" means a license issued by the board
 
11 to a person or entity to perform an occupation which the board
 
12 has identified as requiring a license to engage in shipboard
 
13 gaming in Hawaii.
 
14      "Shipboard gaming" means the operation of games aboard a
 
15 ship licensed under this chapter, including but not limited to,
 
16 baccarat, twenty-one, poker, craps, slot machine, video game of
 
17 chance, roulette wheel, klondike table, punch-board, faro layout,
 
18 keno layout, numbers ticket, push card, jar ticket, or pull tab
 
19 that is authorized by the board as a wagering device.
 
20      §   -4  Hawaii gaming board.  (a)  There is established
 
21 within the department of business, economic development, and
 
22 tourism, for administrative purposes only, the Hawaii gaming
 
23 board which shall administer, regulate, and enforce the system of
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 shipboard gaming established by this chapter.  Its jurisdiction
 
 2 shall extend to every person, association, corporation,
 
 3 partnership, and trust involved in shipboard gaming operations in
 
 4 the State of Hawaii.
 
 5      (b)  The board shall consist of five members of which three
 
 6 shall be appointed by the governor with the advice and consent of
 
 7 the senate, one shall be appointed by the president of the
 
 8 senate, and one shall be appointed by the speaker of the house of
 
 9 representatives.  The members shall elect one from among them to
 
10 be the chairperson.  Each member shall have reasonable knowledge
 
11 of the practice, procedure, and principles of gaming operations.
 
12 Each member shall either be a resident of Hawaii or shall certify
 
13 that the member will become a resident of Hawaii before taking
 
14 office.  At least one member shall be experienced in law
 
15 enforcement and criminal investigation, at least one member shall
 
16 be a certified public accountant experienced in accounting and
 
17 auditing, and at least one member shall be an attorney licensed
 
18 to practice law in Hawaii.
 
19      (c)  The terms of office of the board members shall be three
 
20 years, except that the terms of office of the initial board
 
21 members appointed shall be staggered with one member serving a
 
22 term of one year, one serving a term of two years, and two
 
23 serving terms of three years each.  Upon the expiration of the
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 foregoing terms, the successors shall serve terms of three years.
 
 2 Vacancies in the board shall be filled for the unexpired term in
 
 3 like manner as the original appointments.
 
 4      (d)  Each member of the board shall receive $300 for each
 
 5 day the board meets and for each day the member conducts any
 
 6 hearing pursuant to this chapter.  Each member shall also be
 
 7 reimbursed for all actual and necessary expenses incurred in the
 
 8 execution of official duties.
 
 9      (e)  No person shall be appointed a member of the board or
 
10 continue to be a member of the board if:
 
11      (1)  The person or the person's spouse, child, or parent is,
 
12           a member of the board of directors of, or a person
 
13           financially interested in, any gaming operation subject
 
14           to the jurisdiction of this board; or
 
15      (2)  The person is not of good moral character or has been
 
16           convicted of, or is under indictment for, a felony
 
17           under the laws of Hawaii or any other state, or the
 
18           United States.
 
19      (f)  No board member shall hold any other public office.
 
20 Any member of the board may be removed by the governor for
 
21 neglect of duty, misfeasance, malfeasance, or nonfeasance in
 
22 office.
 
23      §   -5  Board members; bond requirement.  Before assuming
 

 
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                                     S.B. NO.           477
                                                        
                                                        

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

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1      §   -7  Powers of the board.  The board shall have all
 
 2 powers necessary and proper to fully and effectively supervise
 
 3 all shipboard gaming operations, including, but not limited to,
 
 4 the following:
 
 5      (1)  To adopt standards for the licensing of all persons
 
 6           under this chapter, to issue licenses, and to establish
 
 7           and collect fees for such licenses;
 
 8      (2)  To provide for the collection of all fees and taxes
 
 9           imposed pursuant to this chapter;
 
10      (3)  To enter the office, gaming ships, facilities, or other
 
11           places of business of a licensee, where evidence of the
 
12           compliance or noncompliance with this chapter is likely
 
13           to be found;
 
14      (4)  To investigate alleged violations of this chapter and
 
15           to take appropriate disciplinary action against a
 
16           licensee or a holder of an occupational license for a
 
17           violation, or institute appropriate legal action for
 
18           enforcement, or both;
 
19      (5)  To be present through its inspectors and agents any
 
20           time gaming operations are conducted on any shipboard
 
21           for the purpose of certifying the revenue thereof,
 
22           receiving complaints from the public, and conducting
 
23           such other investigations into the conduct of the
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1           shipboard gaming and the maintenance of the equipment
 
 2           as from time to time the board may deem necessary and
 
 3           proper;
 
 4      (6)  To adopt appropriate standards for all gaming ships and
 
 5           facilities, as well as for electronic or mechanical
 
 6           gaming devices;
 
 7      (7)  To require that the records, including financial or
 
 8           other statements of any licensee under this chapter, be
 
 9           kept in such manner as prescribed by the board and that
 
10           any licensee involved in the ownership or management of
 
11           gaming operations submit to the board an annual balance
 
12           sheet and profit and loss statement, list of the
 
13           stockholders or other persons having a one per cent or
 
14           greater beneficial interest in the gaming activities of
 
15           each licensee, and any other information the board
 
16           deems necessary in order to effectively administer this
 
17           chapter;
 
18      (8)  To conduct hearings, issue subpoenas for the attendance
 
19           of witnesses and subpoenas duces tecum for the
 
20           production of books, records, and other pertinent
 
21           documents, and to administer oaths and affirmations to
 
22           the witnesses, when, in the judgment of the board, it
 
23           is necessary to administer or enforce this chapter;
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1      (9)  To prescribe an employment application form to be used
 
 2           by any licensee involved in the ownership or management
 
 3           of shipboard gaming operations for hiring purposes;
 
 4     (10)  To eject or exclude or authorize the ejection or
 
 5           exclusion of, any person from shipboard gaming
 
 6           facilities where such person is in violation of this
 
 7           chapter or where such person's conduct or reputation is
 
 8           such that the person's presence within the gaming ship
 
 9           facilities may, in the opinion of the board, call into
 
10           question the honesty and integrity of the shipboard
 
11           gaming operations or interfere with orderly conduct
 
12           thereof; provided that the propriety of such ejection
 
13           or exclusion is subject to subsequent hearing by the
 
14           board;
 
15     (11)  To require all licensees of gaming operations to
 
16           utilize a cashless wagering system whereby all players'
 
17           money is converted to tokens, electronic cards, or
 
18           chips which shall be used only for wagering aboard the
 
19           gaming ship;
 
20     (12)  To authorize the routes of a gaming ship and the stops
 
21           which the ship may make;
 
22     (13)  To authorize the operation of shuttles to transport
 
23           individuals to and from gaming ships from designated
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1           onshore locations;
 
 2     (14)  To suspend, revoke, or restrict licenses, to require
 
 3           the removal of a licensee or an employee of a licensee
 
 4           for a violation of this chapter or a board rule or for
 
 5           engaging in a fraudulent practice;
 
 6     (15)  To impose and collect fines of up to $5,000 against
 
 7           individuals and up to $10,000 or an amount equal to the
 
 8           daily gross receipts, whichever is larger, against
 
 9           licensees for each violation of this chapter, any rules
 
10           adopted by the board, any order of the board or any
 
11           other action which, in the board's discretion, is a
 
12           detriment or impediment to shipboard gaming operations;
 
13     (16)  To hire employees to gather information, conduct
 
14           investigations, and carry out any other tasks
 
15           contemplated under this chapter;
 
16     (17)  To establish minimum levels of insurance to be
 
17           maintained by licensees;
 
18     (18)  To establish, after consultation with the U. S. Army
 
19           Corps of Engineers, binding emergency orders upon the
 
20           concurrence of a majority of the members of the board
 
21           regarding the navigability of the territorial waters of
 
22           the State in the event of extreme weather conditions,
 
23           acts of God or other extreme circumstances;
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1     (19)  To delegate the execution of any of its powers for the
 
 2           purpose of administering and enforcing this chapter and
 
 3           its rules hereunder;
 
 4     (20)  To adopt necessary rules to implement this chapter; and
 
 5     (21)  To take any other action as may be reasonable or
 
 6           appropriate to enforce this chapter and rules
 
 7           hereunder.
 
 8      §   -8  Meetings of the board.  The board shall hold at
 
 9 least one meeting each quarter of the fiscal year.  In addition,
 
10 special meetings may be called by the chairperson or any two
 
11 board members upon seventy-two hours written notice to each
 
12 member.  All board meetings shall be subject to chapter 92.
 
13 Three members of the board shall constitute a quorum, and three
 
14 votes shall be required for any final determination by the board.
 
15 The board shall keep a complete and accurate record of all its
 
16 meetings.
 
17      §   -9  Annual report.  The board shall file a written
 
18 annual report with the governor and the legislature on or before
 
19 sixty days following the close of each fiscal year and such
 
20 additional reports as the governor or the legislature may
 
21 request.  The annual report shall include a statement of receipts
 
22 and disbursements by the board, actions taken by the board, and
 
23 any additional information and recommendations which the board
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 may deem valuable or which the governor or the legislature may
 
 2 request.
 
 3      §   -10  Hearings by the board.(a)  Upon order of the
 
 4 board, one of the board members or a hearings officer designated
 
 5 by the board may conduct any hearing provided for under this
 
 6 chapter or by board rule and may recommend findings and decisions
 
 7 to the board.  The board member or hearings officer conducting
 
 8 such hearing shall have all powers and rights granted to the
 
 9 board in this chapter.  The record made at the time of the
 
10 hearing shall be reviewed by the board, or a majority thereof,
 
11 and the findings and decision of the majority of the board shall
 
12 constitute the order of the board in that case.
 
13      (b)  Any party aggrieved by an action of the board denying,
 
14 suspending, revoking, restricting, or refusing to renew a license
 
15 may request a hearing before the board.  A request for a hearing
 
16 must be made to the board in writing within five days after
 
17 service of notice of the action of the board.  Notice of the
 
18 action of the board shall be served either by personal delivery
 
19 or by certified mail, postage prepaid, to the aggrieved party.
 
20 Notice served by certified mail shall be deemed complete on the
 
21 business day following the date of such mailing.  The board shall
 
22 conduct all requested hearings promptly and in reasonable order.
 
23      §   -11  Disclosure of records.  (a)  Notwithstanding any
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 other law to the contrary, the board on written request from any
 
 2 person, shall provide information furnished by an applicant or
 
 3 licensee concerning the applicant or licensee, or the applicant's
 
 4 or licensee's products, services or gaming enterprises, and
 
 5 business holdings, as follows:
 
 6      (1)  The name, business address, and business telephone
 
 7           number of any applicant or licensee;
 
 8      (2)  An identification of any applicant or licensee
 
 9           including, if an applicant or licensee is not an
 
10           individual, the state of incorporation or registration,
 
11           the corporate officers, and the identity of all
 
12           shareholders or participants;
 
13      (3)  An identification of any business, including, if
 
14           applicable, the state of incorporation or registration,
 
15           in which an applicant or licensee or an applicant's or
 
16           licensee's spouse or children has an equity interest of
 
17           more than five per cent.  If an applicant or licensee
 
18           is a corporation, partnership, or other business
 
19           entity, the applicant or licensee shall identify any
 
20           other corporation, partnership, or business entity in
 
21           which it has an equity interest of five per cent or
 
22           more, including, if applicable, the state of
 
23           incorporation or registration;
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1      (4)  Whether an applicant or licensee has been indicted,
 
 2           convicted, pleaded guilty or nolo contendere, or
 
 3           forfeited bail concerning any criminal offense under
 
 4           the laws of any jurisdiction, either felony or
 
 5           misdemeanor (except for traffic violations), including
 
 6           the date, the name, and location of the court,
 
 7           arresting agency, and prosecuting agency, the case
 
 8           number, the offense, the disposition, and the location
 
 9           and length of incarceration;
 
10      (5)  Whether an applicant or licensee has had any license or
 
11           certificate issued by a licensing authority in Hawaii
 
12           or any other jurisdiction denied, restricted,
 
13           suspended, revoked, or not renewed and a statement
 
14           describing the facts and circumstances concerning the
 
15           denial, restriction, suspension, revocation or
 
16           nonrenewal, including the licensing authority, the date
 
17           each such action was taken, and the reason for each
 
18           such action;
 
19      (6)  Whether an applicant or licensee has ever filed or had
 
20           filed against it a proceeding in bankruptcy or has ever
 
21           been involved in any formal process to adjust, defer,
 
22           suspend or otherwise work out the payment of any debt
 
23           including the date of filing, the name and location of
 

 
Page 15                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1           the court, the case and number of the disposition;
 
 2      (7)  Whether an applicant or licensee has filed, or been
 
 3           served with a complaint or other notice filed with any
 
 4           public body, regarding the delinquency in the payment
 
 5           of, or a dispute over the filings concerning the
 
 6           payment of, any tax required under federal, state, or
 
 7           local law, including the amount, type of tax, the
 
 8           taxing agency, and time periods involved;
 
 9      (8)  A statement listing the names and titles of all public
 
10           officials or officers of any unit of government, and
 
11           relatives of said public officials or officers who,
 
12           directly or indirectly, own any financial interest in,
 
13           have any beneficial interest in, are the creditors of
 
14           or hold any debt instrument issued by, or hold or have
 
15           any interest in any contractual or service relationship
 
16           with, an applicant or licensee;
 
17      (9)  Whether an applicant or licensee has made, directly or
 
18           indirectly, any political contribution, or any loans,
 
19           donations or other payments, to any candidate or office
 
20           holder, within five years from the date of filing the
 
21           application, including the amount and the method of
 
22           payment;
 
23     (10)  The name and business telephone number of the counsel
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1           representing an applicant or licensee in matters before
 
 2           the board;
 
 3     (11)  A description of any proposed or approved shipboard
 
 4           gaming operation, including the type of ship, home dock
 
 5           location, expected economic benefit to the community,
 
 6           anticipated or actual number of employees, any
 
 7           statement from an applicant or licensee regarding
 
 8           compliance with federal and state affirmative action
 
 9           guidelines, projected or actual admissions and
 
10           projected or actual adjusted gross gaming receipts; and
 
11     (12)  A description of the product or service to be supplied
 
12           by an applicant for a supplier's license.
 
13      (b)  Notwithstanding any provision of law to the contrary,
 
14 the board, on written request from any person, shall also provide
 
15 the following information:
 
16      (1)  The amount of the wagering tax and admission tax paid
 
17           daily to the State by the holder of an owner's license;
 
18      (2)  Whenever the board finds an applicant for an owner's
 
19           license unsuitable for licensing, a copy of the written
 
20           letter outlining the reasons for the denial; and
 
21      (3)  Whenever the board has refused to grant leave for an
 
22           applicant to withdraw an application, a copy of the
 
23           letter outlining the reasons for the refusal.
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1      (c)  Subject to the above provisions, the board shall not
 
 2 disclose any information which would be barred by:
 
 3      (1)  Chapter 92F; or
 
 4      (2)  The laws, rules, regulations, or intergovernmental
 
 5           agreements of any jurisdiction.
 
 6      (d)  The board may assess fees for the copying of
 
 7 information in accordance with chapter 92F.
 
 8      §   -12  Application for owner's license.(a)  A qualified
 
 9 person may apply to the board for an owner's license to conduct a
 
10 shipboard gaming operation.  The application shall be made on
 
11 forms provided by the board and shall contain such information as
 
12 the board prescribes, including but not limited to the identity
 
13 of the ship on which such gaming operation is to be conducted and
 
14 the exact location where the ship will be docked, a certification
 
15 that the ship will be registered under this chapter at all times
 
16 during which gaming operations are conducted on board, detailed
 
17 information regarding the ownership and management of the
 
18 applicant, and detailed personal information regarding the
 
19 applicant.  Information provided on the application shall be used
 
20 as a basis for a thorough background investigation which the
 
21 board shall conduct with respect to each applicant.  An
 
22 incomplete application shall be cause for denial of a license by
 
23 the board.
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1      (b)  Applicants shall submit with their application all
 
 2 documents, resolutions, and letters of support from the governing
 
 3 body that represents the county wherein the licensee will dock.
 
 4      (c)  Each applicant shall disclose the identity of every
 
 5 person, association, trust, or corporation having a greater than
 
 6 one per cent direct or indirect pecuniary interest in the
 
 7 shipboard gaming operation with respect to which the license is
 
 8 sought.  If the disclosed entity is a trust, the application
 
 9 shall disclose the names and addresses of the beneficiaries; if a
 
10 corporation, the names and addresses of all stockholders and
 
11 directors; if a partnership, the names and addresses of all
 
12 partners, both general and limited.
 
13      (d)  An application fee of $50,000 shall be paid at the time
 
14 of filing to defray the costs associated with the background
 
15 investigation conducted by the board, and the search and
 
16 classification of fingerprints obtained by the board with request
 
17 to the application.  If the costs of the investigation exceed
 
18 $50,000, the applicant shall pay the additional amount to the
 
19 board.  If the costs of the investigation are less than $50,000,
 
20 the applicant shall receive a refund of the remaining amount.
 
21 All information, records, interviews, reports, statements,
 
22 memoranda or other data supplied to or used by the board in the
 
23 course of its review or investigation of an application for a
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 license shall be privileged, strictly confidential, and shall be
 
 2 used only for the purpose of evaluating an applicant.  The
 
 3 information, records, interviews, reports, statements, memoranda,
 
 4 or other data shall not be admissible as evidence, nor
 
 5 discoverable in any action of any kind in any court or before any
 
 6 tribunal, board, agency, or person, except for any action deemed
 
 7 necessary by the board.
 
 8      (e)  The licensed owner shall be the person primarily
 
 9 responsible for the ship itself.  Only one shipboard gaming
 
10 operation may be authorized by the board on any ship.  The
 
11 applicant must identify each ship it intends to use and certify
 
12 that the ship:
 
13      (1)  Has the capacity required in this chapter;
 
14      (2)  Is accessible to persons with disabilities; and
 
15      (3)  Is fully registered and licensed in accordance with any
 
16           applicable laws.
 
17      (f)  A person who knowingly makes a false statement on an
 
18 application is guilty of a petty misdemeanor.
 
19      §   -13  Owner's licenses.(a)  No person shall operate and
 
20 maintain a gaming ship in this State unless the person has first
 
21 obtained an owner's license from the board pursuant to this
 
22 section.  If the board finds that the applicant meets the
 
23 eligibility requirements, the board shall issue an owner's
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 license upon payment by the applicant of a $25,000 license fee
 
 2 for the first year of operation.  An applicant is ineligible to
 
 3 receive an owner's license if:
 
 4      (1)  The person has been convicted of a felony under the
 
 5           laws of this State, any other state, or the United
 
 6           States;
 
 7      (2)  The person has been convicted of any violation of or
 
 8           substantially similar laws of any other jurisdiction;
 
 9      (3)  The person has submitted an application for a license
 
10           under this chapter which contains false information;
 
11      (4)  The person is a member of the board;
 
12      (5)  A person defined in paragraph (1), (2), (3), or (4) is
 
13           an officer, director, or managerial employee of the
 
14           firm or corporation;
 
15      (6)  The firm or corporation employs a person defined in
 
16           paragraph (1), (2), (3), or (4) who participates in the
 
17           management or operation of gaming operations authorized
 
18           under this chapter;
 
19      (7)  The person, firm, or corporation has more than a ten
 
20           per cent ownership interest in any entity holding an
 
21           owner's license issued under this chapter; or
 
22      (8)  A license of the person, firm, or corporation issued
 
23           under this chapter, or a license to own or operate
 

 
Page 21                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1           gaming facilities in any other jurisdiction, has been
 
 2           revoked.
 
 3      (b)  In determining whether to grant an owner's license to
 
 4 an applicant, the board shall consider:
 
 5      (1)  The character, reputation, experience, and financial
 
 6           integrity of the applicants and of any other or
 
 7           separate person that either:
 
 8           (A)  Controls, directly or indirectly, the applicant,
 
 9                or
 
10           (B)  Is controlled, directly or indirectly, by the
 
11                applicant or by a person which controls, directly
 
12                or indirectly, the applicant;
 
13      (2)  The facilities or proposed facilities for the conduct
 
14           of shipboard gaming;
 
15      (3)  The highest prospective total revenue to be derived by
 
16           the State from the conduct of shipboard gaming;
 
17      (4)  The financial ability of the applicant to purchase and
 
18           maintain adequate liability and casualty insurance;
 
19      (5)  Whether the applicant has adequate capitalization to
 
20           provide and maintain, for the duration of a license, a
 
21           shipboard; and
 
22      (6)  The extent to which the applicant exceeds or meets
 
23           other standards for the issuance of an owner's license
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1           which the board may adopt by rule.
 
 2      (c)  Each applicant shall submit with the application, on
 
 3 forms provided by the board, two sets of the applicant's
 
 4 fingerprints.
 
 5      (d)  In the application for an owner's license, the
 
 6 applicant shall specify the dock at which the gaming ship will be
 
 7 based and the area within the navigable territorial waters of the
 
 8 State on which the gaming ship will operate.  In determining the
 
 9 navigable waters upon which gaming ships will operate with
 
10 licenses, the board shall consider the economic benefit which
 
11 shipboard gaming confers on the State and shall seek to assure
 
12 that all counties of the State share in the economic benefits of
 
13 shipboard gaming.
 
14      (e)  In granting licenses, the board may give favorable
 
15 consideration to economically depressed areas of the State, to
 
16 applicants presenting plans which provide for significant
 
17 economic development over a large geographic area, and to
 
18 applicants who currently operate nongaming ships in Hawaii.  The
 
19 board shall review all applications for owner's licenses, and
 
20 shall inform each applicant of the board's decision.
 
21      (f)  The board may revoke the owner's license if a licensee
 
22 fails to begin regular shipboard gaming excursions within twelve
 
23 months of receipt of the board's approval of the application upon
 

 
Page 23                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 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 one-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)  An owner's license shall entitle the licensee to own up
 
 8 to two ships.  Ships licensed to operate shall have an authorized
 
 9 capacity of at least three hundred persons.
 
10      (i)  A licensed owner may apply through the board for all
 
11 licenses and permits necessary for the operation of a gaming
 
12 ship, including a liquor license, a license to prepare and serve
 
13 food for human consumption, and other necessary licenses.  The
 
14 board shall establish a process to facilitate and expedite the
 
15 approval of the necessary licenses and permits.
 
16      (j)  Nothing in this chapter shall be interpreted to
 
17 prohibit a licensed owner from operating a school for the
 
18 training of any occupational licensee.
 
19      §   -14  Bond of licensee.  Before an owner's license is
 
20 issued, the licensee shall file a bond in the sum of $200,000
 
21 with the department.  The bond shall be used to guarantee that
 
22 the licensee faithfully makes the payments, keeps books and
 
23 records, makes reports, and conducts games of chance in
 

 
Page 24                                        
                                     S.B. NO.           477
                                                        
                                                        

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

 
Page 25                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1 management of gaming operations.
 
 2      (c)  Gaming supplies and equipment may not be distributed
 
 3 unless supplies and equipment conform to standards adopted by
 
 4 rules of the board.
 
 5      (d)  A person, firm, or corporation is ineligible to receive
 
 6 a supplier's license if:
 
 7      (1)  The person has been convicted of a felony under the
 
 8           laws of this State, any other state, or the United
 
 9           States;
 
10      (2)  The person has been convicted of any violation of or
 
11           substantially similar laws of any other jurisdiction;
 
12      (3)  The person has submitted an application for a license
 
13           under this chapter which 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
 
20           the management or operation of shipboard gaming
 
21           authorized under this chapter; and
 
22      (7)  The license of the person, firm, or corporation issued
 
23           under this chapter, or a license to own or operate
 

 
Page 26                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 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 A misdemeanor.
 
19      (g)  Any gaming equipment, devices, and 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 which are used by any person in an
 

 
Page 27                                        
                                     S.B. NO.           477
                                                        
                                                        

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

 
Page 28                                        
                                     S.B. NO.           477
                                                        
                                                        

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

 
Page 29                                        
                                     S.B. NO.           477
                                                        
                                                        

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

 
Page 30                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1 which a licensed owner has entered into an agreement.
 
 2      §   -17  Conduct of gaming.  Gaming may be conducted by
 
 3 licensed owners aboard gaming ships, subject to the following
 
 4 standards:
 
 5      (1)  No gaming may be conducted while a ship is docked;
 
 6      (2)  Gaming excursions may not exceed six hours for a round
 
 7           trip; provided that the board may provide by rule for
 
 8           extended hours for inter-island cruises;
 
 9      (3)  Minimum and maximum wagers on games shall be set by the
 
10           licensee;
 
11      (4)  Agents of the board may board and inspect any gaming
 
12           ship at any time for the purpose of determining
 
13           compliance with this chapter.  Every gaming ship, if
 
14           under way and being hailed by a law enforcement officer
 
15           or agent of the board, must stop immediately and lay
 
16           to;
 
17      (5)  Employees of the board shall have the right to be
 
18           present on the gaming ship or on adjacent facilities
 
19           under the control of the licensee;
 
20      (6)  Gaming equipment and supplies customarily used in
 
21           conducting shipboard gaming must be purchased or leased
 
22           only from suppliers licensed under this chapter;
 
23      (7)  Persons licensed under this chapter shall permit no
 

 
Page 31                                        
                                     S.B. NO.           477
                                                        
                                                        

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

 
Page 32                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1           aboard a gaming ship or at an onshore facility which
 
 2           has been approved by the board and which is located
 
 3           where the gaming ship docks.  The tokens, chips, or
 
 4           electronic cards may be purchased by means of an
 
 5           agreement under which the owner extends credit to the
 
 6           patron.  The tokens, chips, or electronic cards may be
 
 7           used while aboard the gaming ship only for the purpose
 
 8           of making wagers on authorized games;
 
 9     (13)  Notwithstanding any other provision to the contrary,
 
10           the board may issue special event licenses allowing
 
11           persons not otherwise licensed to conduct shipboard
 
12           gaming to conduct such gaming on a specified date or
 
13           series of dates.  Shipboard gaming under such a license
 
14           may take place on a ship not normally used for
 
15           shipboard gaming.  The board shall establish standards,
 
16           fees, and fines for, and limitations upon, such
 
17           licenses which may differ from the standards, fees,
 
18           fines, and limitations otherwise applicable.  All fees
 
19           and fines collected shall be deposited into the state
 
20           gaming fund pursuant to section    -28; and
 
21     (14)  In addition to the above, gaming must be conducted in
 
22           accordance with all rules adopted by the board.
 
23      §   -18  Collection of amounts owing under credit
 

 


 

Page 33                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1 agreements.  Notwithstanding any other law to the contrary, a
 
 2 licensed owner who extends credit to a shipboard gaming patron is
 
 3 expressly authorized to institute a cause of action to collect
 
 4 any amounts due and owing under the extension of credit, as well
 
 5 as the owner's costs, expenses, and reasonable attorney's fees
 
 6 incurred in collection.
 
 7      §   -19  Admission tax.  (a)  A tax is hereby imposed upon
 
 8 admissions to gaming excursions authorized under this chapter at
 
 9 a rate of $10 per person admitted.  This admission tax is imposed
 
10 upon the licensed owner conducting the gaming excursion.
 
11      (1)  If tickets are issued which are good for more than one
 
12           gaming excursion, the admission tax shall be paid for
 
13           each person using the ticket on each gaming excursion
 
14           for which the ticket is used;
 
15      (2)  If free passes or complimentary admission tickets are
 
16           issued, the licensee shall pay the same tax upon these
 
17           passes or complimentary tickets as if they were sold at
 
18           the regular and usual admission rate;
 
19      (3)  The owner's licensee may issue tax-free passes to
 
20           actual and necessary officials and employees of the
 
21           licensee or other persons actually working on the
 
22           gaming ship; and
 
23      (4)  The number and issuance of tax-free passes is subject
 

 
Page 34                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1           to the rules of the board, and a list of all persons to
 
 2           whom the tax-free passes are issued shall be filed with
 
 3           the board.
 
 4      (b)  The $10 tax imposed under subsection (a), shall be
 
 5 collected by the board and deposited into the state gaming fund
 
 6 pursuant to section    -28.
 
 7      (c)  The licensed owner shall pay the entire admission tax
 
 8 to the board on a daily basis.  Accompanying each payment shall
 
 9 be a return on forms provided by the board which shall include
 
10 other information regarding admissions as the board may require.
 
11 Failure to submit either the payment or the return within the
 
12 specified time may result in suspension or revocation of the
 
13 owner's license.
 
14      §   -20  Wagering tax; rate; distribution.  A tax is imposed
 
15 on the adjusted gross receipts received from games authorized
 
16 under this chapter at the rate of twenty per cent.  The tax
 
17 imposed by this section shall be paid by the licensed owner to
 
18 the board after the close of the day the wagers were made and
 
19 shall be deposited into the state gaming fund pursuant to section
 
20    -28.
 
21      §   -21  Licensees; records; reports; supervision.(a)  A
 
22 licensed owner shall keep books and records so as to clearly
 
23 show:
 

 
Page 35                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1      (1)  The amount received daily from admission taxes;
 
 2      (2)  The total amount of gross receipts; and
 
 3      (3)  The total amount of the adjusted gross receipts.
 
 4      (b)  The licensed owner shall furnish to the board reports
 
 5 and information as the board may require with respect to its
 
 6 activities on forms designed and supplied for such purpose by the
 
 7 board.
 
 8      (c)  The books and records kept by a licensed owner are
 
 9 public records and the examination, publication, and
 
10 dissemination of the books and records shall be subject to
 
11 chapter 92F.
 
12      §   -22  Audit of licensee operations.  Within ninety days
 
13 after the end of each quarter of each fiscal year, the licensed
 
14 owner shall transmit to the board an audit of the financial
 
15 transactions and condition of the licensee's total operations.
 
16 All audits shall be conducted by certified public accountants
 
17 selected by the board.  Each certified public accountant must be
 
18 registered and licensed to practice in this State.  The
 
19 compensation for each certified public accountant shall be paid
 
20 directly by the licensed owner to the certified public
 
21 accountant.
 
22      §   -23  Judicial review.(a)  Jurisdiction and venue for
 
23 the judicial review of a final order of the board relating to
 

 
Page 36                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1 owner's, supplier's, or special event licenses is vested in the
 
 2 circuit court of the appropriate jurisdiction.  A petition for
 
 3 judicial review of a final order of the board must be filed
 
 4 within thirty days after entry of the final order.
 
 5      §   -24  Prohibited activities; penalty.(a)  A person is
 
 6 guilty of a misdemeanor for any of the following:
 
 7      (1)  Operating a gaming excursion where wagering is used or
 
 8           to be used without a license issued by the board;
 
 9      (2)  Operating a gaming excursion where wagering is
 
10           permitted other than in the manner authorized under
 
11           this chapter;
 
12      (3)  Permitting a person under twenty-one years to make a
 
13           wager; or
 
14      (4)  Violating section    -17(12).
 
15      (b)  A person wagering or accepting a wager at any location
 
16 outside the gaming ship is subject to the penalties in sections
 
17 712-1220 to 712-1230.
 
18      (c)  A person commits a class C felony and, in addition,
 
19 shall be barred for life from gaming ships under the jurisdiction
 
20 of the board, if the person does any of the following:
 
21      (1)  Offers, promises, or gives anything of value or benefit
 
22           to a person who is connected with a gaming ship owner
 
23           including, but not limited to, an officer or employee
 

 
Page 37                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1           of a licensed owner or holder of an occupational
 
 2           license pursuant to an agreement or arrangement or with
 
 3           the intent that the promise or thing of value or
 
 4           benefit will influence the actions of the person to
 
 5           whom the offer, promise, or gift was made in order to
 
 6           affect or attempt to affect the outcome of a gaming
 
 7           activity or to influence official action of a member of
 
 8           the board;
 
 9      (2)  Solicits or knowingly accepts or receives a promise of
 
10           anything of value or benefit while the person is
 
11           connected with a gaming ship including, but not limited
 
12           to, an officer or employee of a licensed owner, or
 
13           holder of an occupational license, pursuant to an
 
14           understanding or arrangement or with the intent that
 
15           the promise or thing of value or benefit will influence
 
16           the actions of the person to affect or attempt to
 
17           affect the outcome of a gaming activity, or to
 
18           influence official action of a member of the board.
 
19      (3)  Uses or possesses with the intent to use a device to
 
20           assist:
 
21           (A)  In projecting the outcome of the game;
 
22           (B)  In keeping track of the cards played;
 
23           (C)  In analyzing the probability of the occurrence of
 

 
Page 38                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1                an event relating to the gaming activity; and
 
 2           (D)  In analyzing the strategy for playing or betting
 
 3                to be used in the game except as permitted by the
 
 4                board;
 
 5      (4)  Cheats at a gaming activity;
 
 6      (5)  Manufactures, sells, or distributes any cards, chips,
 
 7           dice, game, or device which is intended to be used to
 
 8           violate this chapter;
 
 9      (6)  Alters or misrepresents the outcome of a gaming
 
10           activity on which wagers have been made after the
 
11           outcome is made sure but before it is revealed to the
 
12           players;
 
13      (7)  Places a bet after acquiring knowledge, not available
 
14           to all players, of the outcome of the gaming activity
 
15           which is subject of the bet or to aid a person in
 
16           acquiring the knowledge for the purpose of placing a
 
17           bet contingent on that outcome;
 
18      (8)  Claims, collects, or takes, or attempts to claim,
 
19           collect, or take, money or anything of value in or from
 
20           the games, with intent to defraud, without having made
 
21           a wager contingent on winning a gaming activity, or
 
22           claims, collects, or takes an amount of money or thing
 
23           of value of greater value than the amount won;
 

 
Page 39                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1      (9)  Uses counterfeit chips or tokens in a gaming activity;
 
 2           or
 
 3     (10)  Possesses any key or device designed for the purpose of
 
 4           opening, entering, or affecting the operation of a
 
 5           gaming activity, drop box, or an electronic or
 
 6           mechanical device connected with the gaming activity or
 
 7           for removing coins, tokens, chips or other contents of
 
 8           a gaming activity.  This paragraph does not apply to a
 
 9           gaming licensee or employee of a gaming licensee acting
 
10           in furtherance of the employee's employment.
 
11      (d)  The possession of more than one of the devices
 
12 described in subsection (c), paragraph (3), (5), or (10) permits
 
13 a rebuttable presumption that the possessor intended to use the
 
14 devices for cheating.
 
15      An action to prosecute any crime occurring during a gaming
 
16 excursion shall be tried in the county of the dock at which the
 
17 gaming ship is based.
 
18      §   -25  Forfeiture of property.(a)  Except as provided in
 
19 subsection (b), any gaming ship used for the conduct of gaming in
 
20 violation of section    -17, shall be subject to section 712-
 
21 1222.5.  Every gaming device found on a ship operating games in
 
22 violation of this chapter shall be subject to seizure,
 
23 confiscation, and destruction.
 

 
Page 40                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1      (b)  It is not a violation of this chapter for a ship or
 
 2 other watercraft which is licensed for gaming by another state to
 
 3 dock on the shores of this State if the State has granted
 
 4 permission for docking; provided no gaming is conducted on the
 
 5 ship or other watercraft while it is docked on the shores of this
 
 6 State or traversing in any navigable territorial waters of the
 
 7 State.  No gaming device shall be subject to seizure,
 
 8 confiscation, or destruction if the gaming device is located on
 
 9 such a ship or other watercraft.
 
10      §   -26  Prohibited activities; civil penalties.  Any person
 
11 who conducts a gaming operation without first obtaining a license
 
12 to do so, or who continues to conduct such games after revocation
 
13 of the person's license, or any licensee who conducts or allows
 
14 to be conducted any unauthorized games on a ship where it is
 
15 authorized to conduct its shipboard gaming operation, in addition
 
16 to other penalties provided, shall be subject to a civil penalty
 
17 equal to the amount of gross receipts derived from wagering on
 
18 the games, whether unauthorized or authorized, conducted on that
 
19 day as well as confiscation and forfeiture of all gaming
 
20 equipment used in the conduct of unauthorized games.
 
21      §   -27  Criminal history record information.  Whenever the
 
22 board is authorized or required by law to consider some aspect of
 
23 criminal history record information for the purpose of carrying
 

 
Page 41                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1 out its statutory powers and responsibilities, upon request from
 
 2 the board, the Hawaii criminal justice data center shall furnish
 
 3 such information contained in its files.
 
 4      §   -28  The state gaming fund.(a)  There is established
 
 5 within the state treasury the state gaming fund, into which shall
 
 6 be deposited all fees and the wagering taxes collected under this
 
 7 chapter.  Moneys in the fund shall be used as follows:
 
 8      (1)  Not more than       per cent shall be used for expenses
 
 9           incurred for the administration and enforcement of this
 
10           chapter; 
 
11      (2)  Ten per cent shall be allocated, subject to
 
12           appropriation by the legislature, to the counties in
 
13           proportion to the revenues generated by gaming ships
 
14           docked in each respective county; and
 
15      (3)  Of the remaining moneys in the fund, subject to
 
16           appropriation by the legislature, fifty per cent shall
 
17           be dedicated for purposes relating to transportation
 
18           improvements and fifty per cent shall be dedicated for
 
19           purposes relating to education.
 
20      (b)  In addition to the annual report required under section
 
21    -9, the board shall submit to the legislature prior to the
 
22 convening of each regular session, a comprehensive financial
 
23 report detailing:
 

 
Page 42                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1      (1)  The revenues collected from the taxes, fees, and fines
 
 2           imposed under this chapter;
 
 3      (2)  The amounts allocable to administrative and enforcement
 
 4           costs; and
 
 5      (3)  The amounts available for appropriation by the
 
 6           legislature for allocation to the counties;
 
 7      (4)  The amounts available for appropriation by the
 
 8           legislature for transportation improvement and
 
 9           education purposes."
 
10      SECTION 2.  Section 36-27, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "§36-27  Transfers from special funds for central service
 
13 expenses.  Except as provided in this section, and
 
14 notwithstanding any other law to the contrary, from time to time
 
15 the director of finance, for the purpose of defraying the
 
16 prorated estimate of central service expenses of government in
 
17 relation to all special funds, except the:
 
18      (1)  Special summer school fund under section 298-3.5;
 
19      (2)  School cafeteria special funds of the community
 
20           colleges and the department of education;
 
21      (3)  Special funds of the student housing, summer session,
 
22           division of continuing education and community service,
 
23           campus center, and bookstores of the University of
 

 
Page 43                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1           Hawaii;
 
 2      (4)  State educational facilities improvement special fund;
 
 3      (5)  Convention center capital and operations special fund;
 
 4      (6)  Special fund established by section 206E-6;
 
 5 [[](7)[]] Housing loan program revenue bond special fund, housing
 
 6           project bond special fund;
 
 7 [[](8)[]] Aloha Tower fund created by section 206J-17; [and
 
 8  [](9)[]] The spouse and child abuse special account under
 
 9           section 346-7.5; the spouse and child abuse special
 
10           account under section 601-3.6[,]; and
 
11     (10)  The state gaming fund under section    -28.
 
12 shall deduct five per cent of all receipts of all other special
 
13 funds, which deduction shall be transferred to the general fund
 
14 of the State and become general realizations of the State.  All
 
15 officers of the State and other persons having power to allocate
 
16 or disburse any special funds shall cooperate with the director
 
17 in effecting these transfers."
 
18      SECTION 3.  Section 36-30, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "§36-30  Special fund reimbursements for departmental
 
21 administrative expenses.(a)  Each special fund, except the:
 
22      (1)  Transportation use special fund established by section
 
23           261D-1;
 

 
Page 44                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1      (2)  Special summer school fund under section 298-3.5;
 
 2      (3)  School cafeteria special funds of the community
 
 3           colleges, and the department of education;
 
 4      (4)  Special funds of the student housing, summer session,
 
 5           division of continuing education and community service,
 
 6           campus center, and bookstores of the University of
 
 7           Hawaii;
 
 8      (5)  State educational facilities improvement special fund;
 
 9      (6)  Special fund established by section 206E;
 
10 [[](7)[]] Aloha Tower fund created by section 206J-17; [and]
 
11 [[](8)[]] Spouse and child abuse special account under section
 
12           346-7.5; the spouse and child abuse special account
 
13           under section 601-3.6[,]; and
 
14      (9)  State gaming fund under section    -28;
 
15 shall be responsible for its pro rata share of the administrative
 
16 expenses incurred by the department responsible for the
 
17 operations supported by the special fund concerned.
 
18      (b)  Administrative expenses shall include:
 
19      (1)  Salaries;
 
20      (2)  Maintenance of buildings and grounds;
 
21      (3)  Utilities; and
 
22      (4)  General office expenses.
 
23      (c)  The pro rata share of each special fund shall be that
 

 
Page 45                                        
                                     S.B. NO.           477
                                                        
                                                        

 
 1 proportion of the administrative expenses of the department,
 
 2 including those paid from all special funds administered by the
 
 3 department, which the expenditures of the special fund bear to
 
 4 the total expenditures of the department; provided that in
 
 5 determining the amount to be charged to each special fund for its
 
 6 pro rata share:
 
 7      (1)  Credit shall be given for any administrative expenses
 
 8           paid from the special fund concerned; and
 
 9      (2)  Other adjustments shall be made as necessary to achieve
 
10           an equitable apportionment.
 
11      (d)  The director of finance may determine the amount to be
 
12 charged to each special fund and may cause the amounts to be
 
13 transferred to the general [funds] fund as reimbursements."
 
14      SECTION 4.  Section 712-1222.5, Hawaii Revised Statutes, is
 
15 amended by amending subsection (3) to read as follows:
 
16      "(3)  This section shall not apply to gambling activity:
 
17      (a)  [conducted] Conducted during travel from foreign
 
18           nations or another state or territory of the United
 
19           States to the point of first entry into state waters or
 
20           during travel to foreign nations or another state or
 
21           territory of the United States from the point of final
 
22           exit from state waters; or
 
23      (b)  Authorized on ships licensed under chapter    ;
 

 
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 1 provided that nothing [herein] in this section shall preclude
 
 2 prosecution for any offense under this part."
 
 3      SECTION 5.  At the 2000 general election there shall be an
 
 4 advisory referendum on the question of Hawaii's need for
 
 5 legalized gambling and if so, what form of legalized gambling is
 
 6 preferred.  The chief election officer of the State shall submit
 
 7 two separate questions to the electorate with instructions as
 
 8 follows:
 
 9      1.  The first proposal shall read:  "Shall the State of
 
10 Hawaii allow some form of legalized gambling?"
 
11      2.  The second proposal shall be submitted in the form of a
 
12 question and shall read:  "Do you support the form of legalized
 
13 gambling known as shipboard gaming?"
 
14      The chief election officer shall publish a notice of the
 
15 referendum proposals and descriptive information of the type of
 
16 gambling, in a newspaper of general circulation in the State at
 
17 least thirty days before the date of the referendum.  The notice
 
18 of the referendum shall also be available at all public libraries
 
19 in the State and the office of the county clerk of each county.
 
20      The ballot shall print the questions and each question shall
 
21 have designated spaces to mark YES or NO.  The first proposal
 
22 shall be considered approved only if approved by a majority of
 
23 all the votes tallied upon the question, this majority
 

 
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                                     S.B. NO.           477
                                                        
                                                        

 
 1 constituting more than fifty per cent of the total votes cast at
 
 2 the election.
 
 3      SECTION 6.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 7.  This Act shall take effect upon its approval.
 
 6 
 
 7                           INTRODUCED BY:_________________________