RELATING TO SOCIAL GAMING.

HB1466

HOUSE OF REPRESENTATIVES

H.B. NO.

1466

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to social gaming
.

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

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SECTION 1.
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The legislature finds that a facility for
social gaming will provide a safe place for alternative entertainment, create
jobs, and generate revenue for the State of Hawaii and community-based
programs.

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The legislature believes that job
creation and career opportunities are two of highest factors for Hawaii
residents to feel secure and optimistic.
�

Developing a new social gaming industry will establish a new revenue path
outside of the overreliance on taxing transactions at Hawaii's beaches, hotels,
restaurants, and bars.

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The
legislature also finds that social gaming through poker, cribbage, rummy,
bridge, and other card games is not gambling since individual skill is the
predominant factor to winning, in comparison to lotteries, contests of chance, and
various casino games.
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Social gaming also
offers no house odds for any game.
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Social
gaming may include prizes and consideration, entry fees and guaranteed prize
winnings, so long as all lawful participants have equal access and equal
opportunity, notwithstanding that individual skill, strategy, and experience
are expected to deliver unequal outcomes among participants in any individual
game or contest.
�
When participants enjoy
competition among themselves and no house, house odds, house player, or other
house interest exists in the games, contests, or the decisions and outcomes of
those games and contests, everybody wins.
�

A licensed facility can serve the purpose of providing a safe, clean,
and fair place to play and ensures the consistency and accuracy of all games
and all contests to all participants.

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The legislature also believes that t
he
facility can also serve to monitor and measure each game or contest to ensure
operational integrity and to collect and distribute a per-hand, per-game, or
per-contest charge based on the volume of gameplay, and deliver a percentage of
the collection first to the State of Hawaii.
�

In addition to charging and collecting a participation fee for the State
of Hawaii, the facility will also charge, collect, and deliver a percentage of
the collection to community-based programs focusing on solutions to housing
challenges.
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The facility may also earn
its revenue by charging participants to play in social games, and by selling
food and beverages.
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Individual game
operators and supervisors may earn their incomes via wages and tips from
participants.

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The legislature rejects any argument
that any existing entities may open a gaming facility or gambling casino in
Hawaii pursuant to the Indian Gaming Regulatory Act, which authorized the
establishment of hundreds of Native American gaming operations in other states.
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According to the National Indian Gaming
Association, there are no federally recognized Native American nations
indigenous to Hawaii, and therefore a Native American gaming operation would
not be permissible in Hawaii under the Act.

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The
legislature believes it owes a duty to protect, preserve, and help provide
improved opportunities for all Native Hawaiians, with additional emphasis on
quality of life improvements.
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Any program
for which Native Hawaiians are the primary beneficiaries shall be considered
thoroughly and encouraged if possible.

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This legislature additionally
believes that its paramount objective is to serve its constituents as
beneficiaries of every strategic plan that becomes an act, with innovative new
bills, and with stewardship.
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In order to
better serve the current and future strategic plans, the legislature ought to
consider best practices to improve funding and supplement Hawaii's financial
resource programs.
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One key objective to
the protection of the well-being of the State of Hawaii and its residents is to
diversify and to increase revenue streams.
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Increased revenues equal increased funding for local community programs,
including the economic self-sufficiency and housing programs for Native
Hawaiians.
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Increasing housing security,
home ownership, and the average household income for Native Hawaiians is
paramount to meeting every other objective.
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This Act will positively contribute to new job creation with priority
hiring and training of Native Hawaiians, and additional funding which is
desperately needed for the houseless crisis.

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This legislative body of the great
State of Hawaii is charged with the responsibility to protect and improve the
lives of Native Hawaiians by creating and maintaining more vibrant housing
opportunities through economic stability initiatives.
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This Act provides for a development team that
includes Native Hawaiians who share the same goals as this legislature, and are
eager to pursue opportunities that are preparing Native Hawaiian communities
for a better future with increases housing availability and security.
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The unmatched beauty of Hawaii guarantees its
economic success in travel, tourism, and hospitality.
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Improving the social and recreational
opportunities, with a focus on visitors' economic impact, can drive substantial
revenue toward the general and specific budgets.
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As the legislature seeks alternative revenue
streams for housing, health, educational, and employment opportunities, billions
of tourism dollars are finding their way to other states for entertainment and
recreation.

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It is often said that Las Vegas is
Hawaii's ninth island.
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Nearly
twenty-five per cent of Hawaii's citizens visit Las Vegas annually and a
substantially greater percentage of Hawaii's international visitors continue to
Las Vegas for further tourism, entertainment, and recreation.
�
Japanese travelers including Hawaii in their
itineraries spent over $40,000,000 last year in their supplemental visits to
Las Vegas.

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Travel and tourism research has
shown that more than seventy per cent of Japanese, Chinese, and Korean visitors
to Hawaii have also recently traveled to Las Vegas, or plan to within twelve
months, and would seek to visit a "casino or gambling facility," or
would approve of a "casino or gambling facility" in Hawaii.
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While the gambling aspect will not be
delivered to these visitors through this Act, the entertainment, recreation,
social enjoyment, and competition aspects will delivered.
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Other states that have authorized social
gaming facilities and non-casino card rooms have experienced a decline in
unlawful gambling activities and associated crime in the same and nearby
municipalities, and have also enjoyed billions of dollars in job-created growth
for their local economies.
�
Time and
money that may have been spent in Las Vegas remained in part within each
respective state.
�
Oregon and California
both specifically authorize gaming and social gaming facilities.
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The best practices of each state have be
incorporated into this Act.
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Social gaming
has a traditional and cultural history in Hawaii, with contests of skill rather
than chance.
�
Games of Makahiki included
variations of checkers, darts, sticks, and stones.
�
These sports and games were usually played individually
or as a team and participants wagered with one another, and without any odds or
negative expectation.
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These were games
of strategy, practice, strength, speed, memory, observation, and intelligence.
�
Players always holding a fair and equal
opportunity to win, and their individual skill being the predominant factor,
was a key factor.

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Today's versions of these
skill-based games include board games, card games, and social sports:
�
chess, checkers, poker, rummy, cribbage,
darts, pool, bowling, and more.
�
A social
gaming facility specializing in offering some of these games, contests, and
events will be celebrated by traditional Hawaiian culture advocates and newly
employed Hawaiians alike.

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Creating a safe, fun, and fair place
for locals and visitors to gather, together, to compete socially in games and
tournaments, and to enjoy friendly competitions that also benefit Hawaii's
general and specific budgets is the primary goal.
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The power to review, authorize, license, and
even grant or exclude land use for this specified use is within the full
control of the legislature.
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The
legislature may specifically authorize and adopt rules regarding the time,
place, supervision, and the play of social games.

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The legislature further finds that,
according to a 2022 report, fifty-two per cent of homeless individuals on Oahu
identify as "Native Hawaiian and Pacific islander" as their only race
or as part of their multiracial identity.
�

This Act will aim to address the disproportionate number of Native
Hawaiians and Pacific islanders suffering from lack of affordable housing by
allocating a per-hand, per-game, or per-contest fee for all players.

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The
purpose of this Act is to authorize social gaming with a portion of the
revenues to support housing programs.

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SECTION 2.
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The Hawaii Revised Statutes is amended by
adding a new chapter to be appropriately designated and to read as follows:

"
CHAPTER

SOCIAL
GAMING

PART I.
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GENERAL PROVISIONS

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-101
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Definitions.
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As used in this chapter, unless the
context clearly requires otherwise:

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"Affiliate" means a person
who, directly or indirectly, through one or more intermediaries:

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(1)
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Controls, is
controlled by, or is under common control;

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(2)
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Is in a
partnership or joint venture relationship; or

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(3)
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Is a
co-shareholder of a corporation, a co-member of a limited liability company, or
a co-partner in a limited liability partnership;

with a person who holds or applies for a social
gaming license under this chapter.

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"Agent" means any
individual who is employed by any agency of the State, other than the
commission, who is assigned to perform full-time services on behalf of or for
the benefit of the commission, regardless of the title or position held by that
individual.

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"Applicant" means any
person who applies for a license under this chapter.

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"Blind" means a forced bet
that must be placed into the pot by one or more players before the cards are
dealt.

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"Button" means an object
used to indicate which player has the deal or vicarious deal.
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The button moves to the player immediately
clockwise of the player who had the previous deal once that hand concludes.

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"Chairperson" means the
chairperson of the Hawaii social gaming control commission.

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"Commission" means the
Hawaii social gaming control commission.

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"Deal" means the
designation of a certain player by the use of a button or other object, for
purposes of the order of card distribution among the players and the order of
the opportunity for placement of wagers among the players in a card game.
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The deal or vicarious dealing designation
shall rotate among players each hand, unless all players agree to rotate the
deal less frequently.

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"Dealer" means an
individual who distributes playing cards to players in accordance with the
rules of the particular social card game and administers the game functions,
rules, and integral outcomes.
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A dealer
shall not places wagers or play in any game.
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A dealer shall not be considered a player.
�
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"Department" means the
department of business, economic development, and tourism.

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"Executive director" means
the executive director of the commission.

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"Facility" means a
freestanding, land-based structure for social gaming and shall not include
existing hotels or other transient accommodation and lodging, bars,
restaurants, showrooms, or theaters.

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"Financial interest" or
"financially interested" means any interest in investments, awarding
of contracts, grants, loans, purchases, leases, sales, or similar matters under
consideration or consummated by the commission, or holding a one per cent or
more ownership interest in an applicant or a licensee.
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A member, employee, or agent of the
commission shall be considered to have a financial interest in a matter under
consideration if any of the following circumstances exist:

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(1)
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The individual
owns one per cent or more of any class of outstanding securities that are
issued by a party to the matter under consideration or consummated by the
commission; or

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(2)
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The individual is
employed by or is an independent contractor for a party to the matter under
consideration or consummated by the commission.

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"Individual" means a
natural person.

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"Investigative hearing"
means any hearing conducted by the commission or its authorized representative
to investigate and gather information or evidence regarding pending license
applicants, qualifiers, licensees, or alleged or apparent violations of this
chapter or rules adopted by the commission.
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An investigative hearing shall include any matter related to an apparent
deficiency.

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"Membership" shall mean
the dues-specific requirement for participation of any player in any social
game.
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The social gaming facility may be
a private business, private club, or place of public accommodation at which
social gaming takes place and the facility may charge or not charge patrons a
membership fee for the privilege of accessing and using the facilities.
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The duration of such memberships shall not be
less than seven calendar days.

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"Occupational license"
means a license issued by the commission to an individual to perform an
occupation relating to social gaming in the State that the commission has
identified as an occupation that requires a license.

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"Outside employment"
includes the following:

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(1)
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Operation of a
proprietorship;

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(2)
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Participation in a
partnership or group business enterprise; or

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(3)
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Performance as a
director or corporate officer of any for-profit corporation, or banking or
credit institution.

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"Person" means an
individual, association, partnership, estate, trust, corporation, limited
liability company, or other legal entity.

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"Player" means any person
who plays a social game.

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"Political activity" or
"politically related activity" includes any of the following:

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(1)
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Using the person's
official authority or influence for the purpose of interfering with or
affecting the result of an election;

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(2)
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Knowingly
soliciting, accepting, or receiving political campaign contributions from any
person;

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(3)
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Running for
nomination or as a candidate for election to a political office; or

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(4)
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Knowingly
soliciting or discouraging the participation in any political activity of any
person who is:

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(A)
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Applying for any
compensation, grant, contract, ruling, license, permit, or certificate pending
before the commission; or

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(B)
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The subject of or
a player in an ongoing audit, investigation, or enforcement action being
carried out by the commission.

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"Problem gambling" shall
mean compulsive behavior adverse to the desired social benefits of social
gaming.

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"Qualifier" means an
affiliate, affiliated company, officer, director, or managerial employee of an
applicant, or person who holds greater than a five per cent direct or indirect
interest in an applicant.
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As used in
this definition, "affiliate" and "affiliated company" shall
not include a partnership, joint venture relationship, co-shareholder of a
corporation, co-member of a limited liability company, or co-partner in a
limited liability partnership that has a five per cent or less direct interest
in the applicant and is not involved in the facility as defined in rules
adopted by the commission.

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"Social gaming",
"gaming", or "game", as the context may require, means the
operation of deck-of-card game rooms, poker rooms, card clubs, and social
gaming Private Member Associations.
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Social
games shall only be played between 7:00 a.m.
�

and 3:00 a.m.
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When social games
are played on the premises of a private business, private club, or place of
public accommodation, social games shall only be played during normal operating
hours.
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Social games shall be played in
accordance with the rules set forth in Hoyle' s Modern Encyclopedia of Card
Games, a copy of which shall be maintained on the social gaming premises, and
shall be subject to inspection by any player upon request provided that the
rules of a social game may deviate from those set forth in Hoyle's Modern
Encyclopedia of Card Games if:

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(1)
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The deviations are
posted on the social gaming premises in a conspicuous location; and

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(2)
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All players of a
social game agree to the posed rules; and

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(3)
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The social game shall
not, with the modifications, violate federal or state law.

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"Social gaming license"
means a license to operate and maintain the social gaming facility under this
chapter.

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"Supplier" means a person
that the commission has identified under rules adopted by the commission as
requiring a license to provide the facility licensees with goods or services
regarding the realty, construction, maintenance, or business of a proposed or
existing facility on a regular or continuing basis, including manufacturers,
distributors, persons who service gaming devices or equipment, garbage haulers,
maintenance companies, food purveyors, and construction companies.

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"Supplier license" means a
license that authorizes a person to furnish any equipment, devices, supplies,
or services to a licensed facility permitted under this chapter.

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"Table" shall mean the
shared playing surface where players and the dealer are seated for the game.
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There shall be no more than one game per
table at a time.
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The number of players
per table shall not exceed ten.

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"Tournament" means a
tournament-style social game where players each pay a buy-in and where the
tournament winner or winners split up the designated prize pool as the winnings
pursuant to terms agreed upon before the tournament begins.

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"Wager" means any
opportunity to bet, including a blind, an ante, an initial bet, or a raise.

PART II.
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HAWAII SOCIAL GAMING CONTROL COMMISSION

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-201
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Hawaii social gaming control
commission; established.
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There is
established the Hawaii social gaming control commission within the department
of business, economic development, and tourism for administrative purposes only.
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The commission shall be a body corporate and
a public instrumentality of the State for the purpose of implementing this
chapter.

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-202
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Members, chairperson,
officers; appointment.
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(a) The
commission shall consist of seven members to be appointed by the governor
pursuant to section 26-34.
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Of the seven
members, two shall be appointed from a list of nominees submitted by the
president of the senate and two shall be appointed from a list of nominees
submitted by the speaker of the house of representatives.

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(b)
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Vacancies in the commission shall be filled
for the unexpired term in like manner as the original appointments.

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(c)
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The members shall elect a chairperson from
among its members.

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(d) Officers of the commission shall
be selected by the members.

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-203
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Member applicant disclosure.
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In addition to any other disclosures
required by the governor or by law, before appointment as a member, the
individual shall disclose to the governor all past involvement of any gaming
interest in the past five years.

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-204
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Member requirements.
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(a)
�
Each member of the commission shall:

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(1)
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Be a resident of
the State;

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(2)
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Serve part-time;

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(3)
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Be paid
compensation of $300 for each day in the performance of their official duties;
and

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(4)
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Be reimbursed for
expenses, including travel expenses, incurred in the performance of official
duties.

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(b)
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Before assuming the duties of office, each member of the commission
shall:

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(1)
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Take an oath that
the member shall faithfully execute the duties of office according to the laws
of the State; and

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(2)
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File and maintain
with the director a bond in the sum of $25,000 with good and sufficient
sureties.
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The cost of any bond for any
member of the commission under this section shall be considered a part of the
necessary expenses of the commission.

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(c)
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By January 31 of each year, each member shall prepare and file with the
commission, a disclosure form in which the member shall:

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(1)
�
Affirm that the
member or the member's spouse, parent, child, or child's spouse is not a member
of the board of directors of, financially interested in, or employed by, a
licensee or applicant;

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(2)
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Affirm that the
member continues to meet all other criteria for commission membership under
this chapter or the rules adopted by the commission;

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(3)
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Disclose any legal
or beneficial interest in any real property that is or may be directly or
indirectly involved with social gaming operations authorized by this chapter;
and

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(4)
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Disclose any other
information that may be required to ensure that the integrity of the commission
and its work is maintained.

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-205
�
Member disqualifications.
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No individual shall be appointed as a
member of the commission or continue to be a member of the commission if the
individual:

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(1)
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Is an elected
State official;

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(2)
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Is licensed by the
commission pursuant to this chapter, or is an official of, has a financial
interest in, or has a financial relationship with, any social gaming operation
subject to the jurisdiction of this commission pursuant to this chapter;

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(3)
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Is related to any
individual within the second degree of consanguinity or affinity who is
licensed by the commission pursuant to this chapter; or

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(4)
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Has been under
indictment, convicted, pled guilty or nolo contendere, or forfeited bail for a
felony or a misdemeanor involving gambling or fraud under the laws of this
State, any other state, or the United States within the ten years prior to
appointment.

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-206
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Member removal.
�
The president of the senate and speaker
of the House of Representatives may request that the governor remove or suspend
a member of the commission that they personally nominated for a seat on the
commission.
�
Upon receipt of a request
from the president of the senate or the speaker of the House of
Representatives, and after due notice and public hearing, the governor may
remove or suspend that member for cause.

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-207
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Powers and duties of the
commission.
�
(a)
�
The commission shall have all powers
necessary to regulate all social gaming operations, including the power to:

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(1)
�
Administer,
regulate, and enforce the system of gaming established by this chapter.
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The commission's jurisdiction shall extend to
every person, association, corporation, partnership, trust, and any other
entity having a financial interest in or holding a license under this chapter,
or required under this chapter to hold a license in social gaming operations in
the city and county of Honolulu;

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(2)
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Issue a license to
operate the social gaming facility pursuant to this chapter;

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(3)
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Determine the
types and numbers of occupational licenses and supplier licenses to be
permitted under this chapter;

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(4)
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Adopt standards for the licensing of all
persons under this chapter subject to the qualifications and standards set
forth herein, to issue licenses, and to establish and collect fees for these
licenses;

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(5)
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Provide for the
collection of all taxes imposed pursuant to this chapter, and to collect,
receive, expend, and account for all revenues derived from social gaming within
the city and county of Honolulu;

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(6)
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Enter at any time without
a warrant and without notice to a social gaming licensee, the premises,
offices, facility, or other places of business of a social gaming licensee or
supplier licensee, where evidence of the compliance or noncompliance with this
chapter or rules is likely to be found.
�
Entry
is authorized to:

���������
(A)
�
Inspect and
examine all premises wherein gaming or the business of gaming or the business
of a supplier is conducted, or where any records of the activities are
prepared;

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(B)
�
Inspect, examine,
audit, impound, seize, or assume physical control of, or summarily remove from
the premises all books, ledgers, documents, writings, photocopies of
correspondence records, videotapes, including electronically stored records,
money receptacles, other containers and their contents, equipment in which the
records are stored, or other gaming-related equipment and supplies on or around
the premises;

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(C)
�
Inspect the
person, and inspect, examine, and seize personal effects present in a facility
licensed under this chapter or of any holder of a gaming license; and

���������
(D)
�
Investigate and
deter alleged violations of this chapter or rules;

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(7)
�
Investigate
alleged violations of this chapter and take appropriate disciplinary action
against a social gaming licensee, supplier licensee, or occupational licensee
for a violation, or institute appropriate legal action for enforcement, or
both;

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(8)
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Be present,
through its inspectors and agents, any time gaming operations are conducted in
the facility for the purpose of certifying the facility's revenue, receiving
complaints from the public, or conducting other investigations into the conduct
of the game operations and the maintenance of the equipment as from time to
time the commission may deem necessary and proper;

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(9)
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Employ any
personnel that may be necessary to carry out its duties;

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(10)
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Adopt appropriate
standards for the social gaming facility;

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(11)
�
Require that
records, including financial or other statements, of any social gaming licensee
under this chapter be kept in the manner prescribed by the commission and that
any social gaming licensee involved in the ownership or management of game
operations submit to the commission an annual balance sheet and profit and loss
statement, a list of the stockholders or other persons having a five per cent
or greater beneficial interest in the activities of the social gaming licensee,
and any other information the commission deems necessary to effectively
administer this chapter;

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(12)
�
Conduct hearings,
issue subpoenas for the attendance of witnesses and subpoenas duces tecum for
the production of books, records, and other pertinent documents, and to
administer oaths and affirmations to the witnesses, when, in the judgment of
the commission, it is necessary to administer or enforce this chapter.
�
The executive director or the executive
director's designee may issue subpoenas and administer oaths and affirmations
to witnesses;

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(13)
�
Prescribe any
employment application form to be used by the social gaming licensee involved
in the ownership or management of game operations for hiring purposes;

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(14)
�
Eject or exclude,
or authorize the ejection or exclusion of, any individual from the social
gaming facility where the individual is in violation of this chapter or, based
upon the individual's conduct, the individual's presence within the social
gaming facility may call into question the honesty and integrity of the game
operations or interfere with the orderly conduct thereof, or any other action
that, in the opinion of the commission, is a detriment or impediment to the
game operations; provided that the propriety of that ejection or exclusion
shall be subject to subsequent hearing by the commission;

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(15)
�
Permit the social
gaming licensee to use a system whereby a player's money is converted to
tokens, electronic cards, or chips having visible denominations, that shall be
used only for wagering within the facility;

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(16)
�
Suspend, revoke,
or restrict any license issued pursuant to this chapter, to require the removal
of a licensee or an employee of a licensee for a violation of this chapter or a
commission rule, or for engaging in a fraudulent practice;

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(17)
�
Impose and collect
fines of up to $5,000 against individuals and up to $10,000, against the social
gaming licensee or a supplier licensee for each violation of this chapter, any
rules adopted by the commission, or for any other action that is a detriment or
impediment to game operations;

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(18)
�
Establish minimum
levels of insurance to be maintained by the social gaming licensee or a
supplier licensee;

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(19)
�
Establish a
process to facilitate and expedite the approval of the necessary licenses and
permits for the social gaming licensee to begin regular operations;

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(20)
�
Establish its own
procedures for the issuance of liquor licenses for the social gaming license
under this chapter; provided that all state laws and county ordinances relating
to liquor are satisfied;

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(21)
�
Delegate the
execution of any of its powers for the purpose of administering and enforcing
this chapter; and

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(22)
�
Adopt rules
pursuant to chapter 91 to implement this chapter, including rules that:

���������
(A)
�
Govern, restrict,
approve, or regulate the gaming authorized in this chapter;

���������
(B)
�
Promote the
safety, security, and integrity of gaming authorized in this chapter;

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(C)
�
License and
regulate, consistent with the qualifications and standards set forth in this
chapter, persons participating in or involved with gaming authorized in this
chapter; and

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(D)
�
Take any other
action that may be reasonable or appropriate to enforce this chapter and rules
adopted under this chapter.

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(b)
�

The commission shall collaborate with the Hawaii tourism authority to
identify high-value markets for the social gaming facility and develop and
implement marketing strategies for those markets.

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(c)
�

The commission shall adopt rules in accordance with chapter 91
establishing a code of ethics for its members and employees that shall include
a prohibition on employees participating in any game or gaming operation
subject to the jurisdiction of the commission.
�

The code of ethics shall be separate from and in addition to any
standards of conduct set forth pursuant to chapter 84.

����
�
��

-208 Chairperson; reports.
�
(a)
�
Whenever the chairperson is required to file
disclosure forms or report in writing the details of any incident or
circumstance pursuant to this chapter, the chairperson shall file the forms or
reports to the commission.

����
(b)
�

The chairperson shall report any action the chairperson has taken or
contemplates taking under this chapter, with respect to an employee or agent or
former employee or former agent, to the commission at the next meeting of the
commission.
�
The commission may direct
the executive director to take additional or different action.

����
(c)
�

The chairperson may investigate or initiate an investigation of any
matter reported with the assistance of the attorney general and law enforcement
to determine if the matter violates this or other state law.
�
The disclosure under this section and the
investigation shall remain confidential.
�

Following an investigation, the chairperson shall advise the governor
and the commission of the results of the investigation and may recommend action
the chairperson considers appropriate.

����
�
��

-209
�
Meetings; hearings.
�
(a)
�

The commission, subject to chapter 92, shall hold at least one meeting
in each quarter of the state fiscal year.
�

The chairperson or any four members may call special meetings; provided
that written notice of a special meeting shall be provided to each member not
less than seventy-two hours before the meeting.
�

Four members shall constitute a quorum, and a majority vote of the
members present shall be required for any final determination by the commission.
�
The commission shall keep a complete and
accurate record of all its meetings.

����
(b)
�

Upon order of the commission, one of the commission members, or a
hearings officer designated by the commission, may conduct any hearing provided
for under this chapter related to gaming or by commission rule and may
recommend findings and decisions to the commission.
�
The record made at the time of the hearing
shall be reviewed by the commission, or a majority thereof, and the findings
and decisions of the majority of the commission shall constitute the order of
the commission in that case.

����
(c)
�

Notice of the actions of the commission shall be served either by
personal delivery or by certified mail, postage prepaid, to the aggrieved
party.

����
(d)
�

Any party aggrieved by an action of the commission denying, suspending,
revoking, restricting, or refusing to renew a license under this chapter may
request a hearing before the commission.
�

A request for a hearing shall be made to the commission in writing
within five days after service of notice of the action of the commission.
�
The commission shall conduct all requested
hearings promptly and in reasonable order.

����
�
�
�
-210
�
Executive director of the Hawaii social
gaming control commission.
�
(a)
�
The commission shall appoint an executive
director of the commission who shall be subject to the commission's supervision.
�
The executive director shall:

����
(1)
�
Hold office at the
pleasure of the commission;

����
(2)
�
Be exempt from
chapters 76 and 89;

����
(3)
�
Devote full-time
to the duties of the office;

����
(4)
�
Not hold any other office or employment;

����
(5)
�
Perform all duties that the commission
assigns;

����
(6)
�
Receive an annual salary at an amount set by
the commission;

����
(7)
�
Be reimbursed for expenses actually and
necessarily incurred in the performance of the executive director's duties;

����
(8)
�
Preserve all records, books, documents, and
other papers belonging to the commission or entrusted to its care relating to
social gaming;

����
(9)
�
Set the salaries of employees hired pursuant
to this section; and

���
(10)
�
Keep records of all proceedings of the
commission.

����
(b)
�
Except as otherwise provided by law, the
executive director may:

����
(1)
�
Hire assistants,
other officers, and employees, who shall be exempt from chapters 76 and 89 and
who shall serve at the pleasure of the executive director; and

����
(2)
�
Appoint committees
and consultants necessary for the efficient operation of social gaming;
provided that no individual shall be hired or appointed under this subsection
who:

���������
(A)
�
Is an elected state official;

���������
(B)
�
Is licensed by the commission pursuant to this
chapter or is an official of, has a financial interest in, or has a financial
relationship with, any gaming operation subject to the jurisdiction of the
commission pursuant to this chapter;

���������
(C)
�
Is related to any individual within the second
degree of consanguinity or affinity who is licensed by the commission pursuant
to this chapter; or

���������
(D)
�
Has been under indictment, convicted, pled
guilty or nolo contendere, or forfeited bail for a felony or misdemeanor
concerning gambling or fraud under the laws of this State, any other state, or
the United States within the last ten years.

����
�
��
-211
�
Commission
employees.
�
(a)
�
No individual shall be employed by the
commission if:

����
(1)
�
During the three
years immediately preceding appointment or employment, the individual held any
direct or indirect interest in, or was employed by:

���������
(A)
�
A licensee under this chapter or in another
jurisdiction; or

���������
(B)
�
A potential licensee who had an application to
operate the facility pending before the commission or any other jurisdiction;
except that the individual seeking employment may be employed by the commission
if the individual's interest in any licensee would not, interfere with the
objective discharge of the individual's employment obligations.
�
An individual shall not be employed by the
commission if the individual's interest in the licensee constitutes a
controlling interest in that licensee; or

����
(2)
�
The individual or
the individual's spouse, parent, child, child's spouse, or sibling:

���������
(A)
�
Is a member of the commission;

���������
(B)
�
Is a director of or has a financial interest
in the social gaming licensee;

���������
(C)
�
Is a director of or has a financial interest
in a supplier licensee; or

���������
(D)
�
Has an application for any license pending
before the commission.

����
�
��
-212
�
Employee,
agent of commission; pre-employment disclosure.
�

Before employment as an employee or agent of the commission, the
individual shall disclose all past involvement with any gaming interest in the
past five years.

����
�
��
-213
�
Hawaii
social gaming control commission employees; financial disclosures.
�
Each employee or agent of the commission,
except the executive director, shall file with the commission at the time of
employment a financial disclosure statement listing all assets, liabilities,
property and business interests, and sources of income of the employee and the
employee's spouse.

����
�
��
-214
�
Member,
employee, or agent of commission; conduct.
�

(a) Any member, employee, or agent of the commission who:

����
(1)
�
Becomes aware that
the member, employee, or agent of the commission or their spouse, parent, or
child is a member of the board of directors of, financially interested in, or
employed by a licensee or an applicant shall immediately provide detailed
written notice thereof to the chairperson;

����
(2)
�
Has been indicted,
charged with, convicted of, pled guilty or nolo contendere to, or forfeited
bail for:

���������
(A)
�
A misdemeanor involving gambling, dishonesty,
theft, or fraud;

���������
(B)
�
A local ordinance in any state involving
gambling, dishonesty, theft, or fraud that substantially corresponds to a
misdemeanor in that state; or

���������
(C)
�
A felony under Hawaii law, the laws of any
other state, or the laws of the United States, or any other jurisdiction; shall
immediately provide detailed written notice of the conviction or charge to the
chairperson;

����
(3)
�
Is negotiating
for, or acquires by any means, any interest in a licensee or an applicant, or
is affiliated with such a person, shall immediately provide written notice of
the details of the interest to the chairperson.
�

The member, employee, or agent of the commission shall not act on behalf
of the commission with respect to that person;

����
(4)
�
Receives an invitation, written or oral, to
initiate a discussion concerning employment or the possibility of employment
with a person, or affiliate of a person, who is a licensee or an applicant
shall immediately report the invitation to the chairperson.
�
The member, employee, or agent of the
commission shall not take action on behalf of the commission with respect to
that person;

����
(5)
�
Is offered a bribe in violation of this
chapter shall immediately provide a written account of the details of the
incident to the chairperson and to a law enforcement officer of a law
enforcement agency having jurisdiction; and

����
(6)
�
Acquires a financial interest in a licensee or
applicant, or affiliate or representative of a licensee or applicant through no
intentional action of the employee or agent, shall have up to thirty days to
divest or terminate the financial interest.
�

An individual who has been offered employment with the commission and
any employee's, agent's, or member's spouse, parent, or child who acquires a
financial interest in a licensee or applicant, or affiliate or representative
of a licensee or applicant through no intentional action of the individual who
has been offered employment with the commission, member, employee, or agent of
the commission shall have up to thirty days to divest or terminate the
financial interest.
�
Any employment or
agent may be terminated by the chairperson if the interest has not been
divested after thirty days.

����
�
��
-215
�
Member,
employee, or agent of commission; prohibitions.
�

No member, employee, or agent of the commission shall:

����
(1)
�
Engage in
political activity or politically related activity during the duration of the
individual's appointment or employment;

����
(2)
�
Enter into any
negotiations for employment with any person or affiliate of any person who is a
licensee or an affiliate; provided that if a member, an employee, or an agent
of the commission does enter into any negotiations for employment with any
person or affiliate of any person who is a licensee or an affiliate, the
member, employee, or agent of the commission shall immediately provide written
notice of the details of any negotiations or discussions to the chairperson,
and the member, employee, or agent of the commission shall not take any action
on behalf of the commission with respect to that person for the duration of any
negotiations for employment;

����
(3)
�
Accept any gift,
gratuity, compensation, travel, lodging, or anything of value, directly or
indirectly, from any licensee, applicant, or any affiliate or representative of
an applicant or licensee or allow any parent, spouse, sibling, or child of a
member, employee, or agent of the commission to do the same, unless the
acceptance conforms to a written policy or directive issued by the chairperson
or the commission.
�
If any member,
employee, or agent of the commission or any parent, spouse, sibling, or child
of a member, employee, or agent of the commission is offered or receives any
gift, gratuity, compensation, travel, lodging, or anything of value, directly
or indirectly, from any licensee or any applicant or affiliate or
representative of an applicant or licensee, that member, employee, or agent of
the commission shall immediately provide written notification of the details to
the chairperson;

����
(4)
�
Engage in any conduct that constitutes a
conflict of interest, and shall immediately provide written notification to the
chairperson of the details of any incident or circumstances that would present
the appearance of a conflict of interest with respect to the performance of
commission-related work or duty of the member, employee, or agent of the
commission; and

����
(5)
�
Participate in any game conducted by any
licensee or applicant, or any affiliate of an applicant or licensee, in the
State or in any other jurisdiction; provided that:

���������
(A)
�
A member, employee, or agent of the commission
may participate in a game conducted by a licensee under this chapter, to the
extent authorized by the chairperson or commission as part of the member's
surveillance, security, or other official duties for the commission; and

���������
(B)
�
A member, employee, or agent of the commission
shall advise the chairperson at least twenty-four hours in advance if the
member plans to be present in the facility in the State, operated by a
licensee, applicant, or affiliate of a licensee or applicant, outside the scope
of their official duties for the commission.

����
�
��
-216
�
Employee; outside employment.
�
(a)
�
A new or current employee or agent of the
commission shall obtain written permission from the executive director before
continuing outside employment held at the time the employee begins to work for
the commission.
�
Permission shall be
denied or permission previously granted shall be revoked if the nature of the
work is considered to create a possible conflict of interest or otherwise
interferes with the duties of the employee or agent for the commission.

����
(b)
�
An employee or agent of the commission granted
permission for outside employment shall not conduct any business or perform any
activities, including solicitation, related to outside employment on premises
used by the commission or during the employee's working hours for the
commission.

����
�
��

-217
�
Confidentiality.
�
A member, employee, or agent of the
commission, or former member, employee, or agent of the commission, shall not
disseminate or otherwise disclose any material or information in the possession
of the commission that the commission considers confidential unless
specifically authorized to do so by the chairperson or the commission.

����
�
��
-218
�
Post-employment,
post-membership; restrictions.
�
(a)
�
Within five years after the date of termination
of the individual's membership on or employment with the commission, a member
of the commission or the executive director, shall not hold direct or indirect
interest in, be employed by, or enter into a contract for service with, any
applicant or person licensed by the commission.

����
(b)
�
Within three years after the date of
termination of the member's term of office or the employee's period of
employment with the commission, a commission member or an

individual employed by the commission shall not
represent a person or party other than the State before or against the
commission.

����
(c)
�
Within a period of three years after the date
of termination of the individual's employment with the commission, the
individual shall not acquire any direct or indirect interest in, be employed
by, or enter into a contract for services with any applicant or person licensed
by the commission.

����
(d)
�
A business entity in which a former commission
member or employee or agent has an interest, or any partner, officer, or
employee of the business entity, shall not make any appearance or
representation before the commission from which that former member, employee,
or agent is prohibited.
�
As used in this
subsection, "business entity" means a corporation, limited liability
company, partnership, limited liability partnership association, trust, or
other form of legal entity.

����
�
��

-219
�
Former member, employee,
agent of the commission; witness.
�
A
former member, employee, or agent of the commission may appear before the
commission as a witness testifying as to factual matters or actions handled by
the member, employee, or agent during the individual's tenure as a member,
employee, or agent of the commission.
�
The
member, employee, or agent of the commission shall not receive compensation for
the appearance other than a standard witness fee and reimbursement for travel
expenses as established by statute or court rule.

����
�
��

-220
�
Member, employee, or agent
of commission; penalties.
�
(a)
�
Violation of this chapter by a member of the
commission may result in disqualification or constitute cause for removal under
section 26-34(d) or other disciplinary action as determined by the commission.

����
(b)
�
Violation of this chapter by an employee or
agent of the commission shall not result in termination of employment or
require other disciplinary action if the commission determines that the conduct
involved does not violate the purpose of this chapter; provided that employment
shall be terminated:

����
(1)
�
If the employee or
agent is a spouse, parent, child, or spouse of a child of a commission member;
or

����
(2)
�
If, after being
offered employment or having begun employment with the commission, the employee
or agent intentionally acquires a financial interest in a licensee or
applicant, or affiliate or representative of a licensee or applicant.

����
�
��

-221
�
Annual report.
�
The commission shall file a written
report with the governor and legislature at least sixty days prior to the close
of each fiscal year and shall file any additional reports that the governor or
legislature requests.
�
The annual report
shall include:

����
(1)
�
A statement of
receipts and disbursements related to social gaming pursuant to this chapter;

����
(2)
�
Actions taken by
the commission; and

����
(3)
�
Any additional
information and recommendations that the commission may deem valuable or that
the governor or legislature may request.

����
�
��

-222
�
No civil cause of action.
�
A violation of this part shall not create
a civil cause of action.

PART III.
�
SOCIAL GAMING FACILITY

SUBPART A.
�
SOCIAL GAMING LICENSE APPLICATIONS

����
�
��

-301
�
Authorization of social
gaming.
�
(a)
�
Social gaming shall only be authorized in one
facility located in the geographic area designated by a county with a
population greater than three hundred thousand residents as a special district
that contains the largest concentration of hotel rooms.

����
(b)
�
Within one hundred and twenty days of its
appointment, the commission shall adopt necessary rules and make applications
available for a social gaming license to operate the social gaming facility.
�
Applications for a social gaming license
shall be submitted to the commission no later than sixty days after the date
applications are made available.
�
The
commission shall select the applicant that best meets the criteria pursuant to
this subpart no later than ninety days after the final date applications must
be submitted to the commission.
�
If the
selected applicant meets all the requirements of this chapter, the commission
shall issue a social gaming license to the applicant within one hundred and
twenty days after the date the applicant is selected.

����
�
��

-302
�
Application for the social
gaming license.
�
(a)
�
Each applicant shall be a resident of the
State for at least the ten years immediately preceding the submission of the
application.
�
If an entity submits an
application, a principal of the entity shall be a resident of the State for the
twenty years immediately preceding the submission of the application.

����
(b) A person, including qualifiers,
may apply to the commission for a social gaming license.
�
The application shall be made under oath on
forms provided by the commission and shall contain information as prescribed by
the commission, including the following:

����
(1)
�
The name, business
address, telephone number, social security number and, where applicable, the
federal tax identification number of the applicant and every qualifier;

����
(2)
�
An identification
of any business, including, if applicable, the state of incorporation or
registration, in which the applicant or qualifier has an equity interest of
more than five per cent.
�
If the
applicant or qualifier is a corporation, partnership, or other business entity,
the applicant or qualifier shall identify any other corporation, partnership,
or other business entity in which it has an equity interest of more than five
per cent, including, if applicable, the state of incorporation or registration.
�
The applicant or qualifier may comply with
this paragraph by filing a copy of the applicant's or qualifier's registration
with the United States Securities and Exchange Commission if the registration
contains the information required by this paragraph;

����
(3)
�
Whether the
applicant or qualifier has been indicted, convicted, pled guilty or nolo
contendere, or forfeited bail for a felony within the last eight years or a
misdemeanor involving gambling, theft, dishonesty or fraud within the last
eight years, not including traffic violations, and including the date, name,
and location of the court, arresting agency, prosecuting agency, the case
caption, docket number, offense, disposition, and location and length of
incarceration;

����
(4)
�
Whether the applicant
or qualifier has ever been granted any license or certificate issued by a
licensing authority in the State, or any other jurisdiction, that has been
restricted, suspended, revoked, or not renewed and a statement describing the
facts and circumstances concerning the application, denial, restriction,
suspension, revocation, or nonrenewal, including the licensing or codifying
authority, the date each action was taken, and the reason for each action;

����
(5)
�
Whether the
applicant or qualifier, within the last ten years, has filed or had filed
against it a civil or administrative action or proceeding in bankruptcy or has,
within the last eight years, been involved in any formal process to adjust,
defer, suspend, or otherwise address the payment of any debt, including the
date of filing, name, and location of the court, case caption, docket number,
and disposition;

����
(6)
�
Whether the
applicant or qualifier, within the last five tax years, has failed to pay any
final amount of tax due and payable under federal, state, or local law, after
exhaustion of all interagency appeals processes, including the amount, type of
tax, taxing jurisdiction, and time periods involved;

����
(7)
�
Bank statements,
escrow accounts, or other documents demonstrating the financial resources that
have been under the control of the applicant for not less than ninety days
immediately preceding the date of the application;

����
(8)
�
A statement
listing the names and titles of all public officials or officers of any unit of
state or county government in the jurisdiction in which the facility is to be
located, and the spouses, parents, and children of those public officials or
officers who, directly or indirectly, own any financial interest in, have any
beneficial interest in, are the creditors of or hold any debt instrument issued
by, or hold or have an interest in any contractual or service relationship
with, the applicant or a qualifier.
�
As
used in this paragraph, "public official" or "officer" shall
not include an individual who would be listed solely because of the
individual's state or federal military service;

����
(9)
�
The name and
business telephone number of any attorney, counsel, or any other person
representing an applicant or a qualifier in matters before the commission; and

���
(10)
�
For the applicant
only, a development plan for the social gaming facility that includes a
description of the proposed facility, including the economic benefit to the
community, anticipated or actual number of employees, any statement from an
applicant regarding compliance with federal and state affirmative action
guidelines, projected or actual admissions, projected or actual gross receipts,
and scientific market research, if any.

����
(c)
�
Applicants shall submit with their application
a plan for training residents of the State for jobs that are available at the
facility.
�
The plan shall take into
consideration the need to provide training to low-income individuals to enable
them to qualify for jobs that will be created by the facility.

����
(d)
�
Each applicant and qualifier shall disclose
the identity of every person, association, trust, or corporation having a
greater than five per cent direct or indirect financial interest in the gaming
operation for which the license is sought.
�

If the disclosed entity is a:

����
(1)
�
Trust, the
application shall disclose the names and addresses of the beneficiaries;

����
(2)
�
Corporation, the
application shall disclose the names and addresses of all stockholders and
directors; and

����
(3)
�
Partnership, the
application shall disclose the names and addresses of all partners, both
general and limited.

����
(e)
�
To demonstrate financial ability, the
applicant may include the economic resources of the person or persons who will
operate the social gaming facility and any qualifiers.

����
(f)
�
Each applicant and qualifier shall submit with
the application two sets of the applicant's fingerprints on forms provided by
the commission.

����
(g) An application fee of $50,000
shall be paid to the commission by an applicant at the time of filing to defray
the costs associated with an applicant and qualifier's background investigation
conducted by the commission.
�
All
information, records, interviews, reports, statements, memoranda, or other data
supplied to or used by the commission in the course of its review or
investigation of an application for a license shall be confidential, used only
for the purpose of evaluating an applicant, and exempt from public disclosure
required by chapter 92F, and shall not be admissible as evidence, nor
discoverable in any action of any kind in any court or before any tribunal,
agency, or person.

����
�
��
-303
�
Gaming
license application; denial.
�
(a)
�
An applicant shall be denied a gaming license
if:

����
(1)
�
The applicant has
been convicted of a felony under the laws of this State, any other state, or
the United States within seven years before the date of the application;

����
(2)
�
The individual has
knowingly submitted an application for a license under this chapter that
contains false information;

����
(3)
�
The applicant
fails to present proof of financial resources in excess of $1,000,000 under its
control;

����
(4)
�
The individual is a member of the commission;

����
(5)
�
The firm or corporation applying for a license
employs an individual described in paragraphs (1), (2), (3), or (4) who
participates in the management or operation of gaming operations authorized
under this chapter; or

����
(6)
�
A license of the applicant issued under this
chapter, or a license to own or operate gaming facilities in any other
jurisdiction, has been revoked.

����
(b)
�
An incomplete application shall be cause for
denial of a license by the commission.

����
�
��
-304
�
Application
deficiency.
�
(a)
�
If, in the review of an application submitted
under this chapter, the executive director identifies an apparent deficiency
that, if true, would require denial of the license or the disqualification of a
qualifier, the executive director shall notify the affected applicant or
qualifier in writing of the apparent deficiency.
�
The applicant or qualifier may then request
an informal conference with the executive director to discuss the factual basis
of the apparent deficiency.

����
(b)
�
The executive director shall provide the
applicant or qualifier a reasonable period of time to correct the apparent
deficiency.
�
If the apparent deficiency
is not corrected within a reasonable time period, the executive director shall
find that the apparent deficiency has not been corrected.
�
Following this finding, the affected
applicant or qualifier shall have an opportunity to appeal the executive
director's finding of an apparent deficiency to the commission.
�
The commission shall conduct an investigative
hearing, in accordance with rules adopted under this chapter, to determine
whether there is sufficient evidence to support an apparent deficiency finding.
�
At the hearing, the burden of proof shall be
on the executive director to demonstrate that the finding of an apparent
deficiency is supported by law and facts.
�

Any finding by the commission about an applicant or a qualifier's
apparent deficiency shall not constitute a final determination by the
commission as to the suitability of the applicant to hold a social gaming
license, or the suitability of a qualifier to hold an ownership interest in the
facility applicant.

����
(c)
�
At any time prior to a finding by the
commission that a qualifier is unsuitable to hold an ownership interest in the
facility license applicant, a qualifier shall have the ability to sell its
ownership interest in the facility license applicant to the facility license
applicant, another qualifier, or a third party.

����
(d)
�
A qualifier who has been issued a finding of
an apparent deficiency shall have the right to request that the commission
expand the apparent deficiency hearing under this section to include a
determination of the qualifier's suitability to hold an ownership interest in
the social gaming license applicant.
�
If
that request is made, the commission shall determine the suitability of the
affected qualifier separate from the suitability of the applicant and any of
its other qualifiers.
�
A request by a
qualifier for an extended hearing pursuant to this section shall not prevent
the commission from issuing a license to the applicant.
�
Until the commission determines that a
qualifier under this section is suitable to hold an ownership interest in the
applicant, the applicant or licensee shall not do any of the following:

����
(1)
�
Make any direct or
indirect payments or distributions of revenue or other benefits to the
qualifier that are related in any way to the qualifier's interest in the
applicant; or

����
(2)
�
Pay any direct or
indirect compensation to the qualifier for services rendered to the applicant,
unless specifically approved and authorized by the commission.

����
�
��
-305
�
Criteria for award of a gaming license.
�
(a)
�
The information provided on the application
shall be used as the basis for a background investigation that the commission
shall conduct with respect to each applicant and qualifier.

����
(b)
�
The license to operate a facility shall be
awarded based upon the following criteria:

����
(1)
�
Whether the
applicant's social gaming facility development plan for the facility will
increase tourism, generate jobs, and provide revenue to the local economy;

����
(2)
�
Whether the
applicant has the financial resources and ability to construct the facility,
based upon the submitted financial data and other facts;

����
(3)
�
Whether the
applicant has the financial ability to purchase and maintain adequate liability
and casualty insurance and to provide an adequate surety bond;

����
(4)
�
Whether the applicant has adequate
capitalization to develop, construct, maintain, and operate, for the duration
of the license, the proposed facility, in accordance with the requirements of
this chapter and rules adopted by the commission, and to responsibly pay off
its secured and unsecured debts, in accordance with its financing agreement and
other contractual obligations;

����
(5)
�
The extent to which the applicant or any of
its qualifiers demonstrate that they have assisted the State in developing
social gaming through their commitment of resources to support, promote, and
establish social gaming in the State.
�
Expenditures
of time, money, and effort shall all be considered in connection with this
criterion.
�
The timing of participation
shall further influence this criterion, with early participation and
contribution to the development program receiving more favorable consideration;

����
(6)
�
The extent to which the applicant or any of
its qualifiers demonstrate that they have at least ten years of experience in
helping to revitalize an urban area by successfully planning, developing, and
opening a gaming facility in any state that previously did not have any social
gaming facility.
�
Any experience in
planning, developing, and opening a gaming facility that is currently operating
shall receive more favorable consideration for this criterion.
�
For purposes of this paragraph, "urban
area" means a jurisdiction having a population of at least one hundred
thousand;

����
(7)
�
Whether the applicant or any of its qualifiers
has been indicted, convicted, pled guilty or nolo contendere, or forfeited bail
for a felony within the last ten years or a misdemeanor involving gambling,
theft, dishonesty, or fraud within the last ten years, not including traffic
violations;

����
(8)
�
Whether the applicant or any of its
qualifiers, within the last seven years:

���������
(A)
�
Has filed, or had filed against it, a
proceeding for bankruptcy; or

��������
(B)
�
Has been involved in any formal process to
adjust, defer, suspend, or otherwise address the payment of any debt;

����
(9)
�
Whether an applicant or any of its qualifiers,
within the last five tax years, has failed to pay any final amount of tax due
and payable under federal, state, or local law, after exhaustion of all
interagency appeals processes;

���
(10)
�
Whether the applicant or any of its qualifiers
is Native Hawaiian with Hawaii residency for at least the last ten years;

���
(11)
�
Whether the applicant owns directly or
derivatively real property in the state prior to the passage of this bill; and

���
(12)
�
Whether the applicant meets other standards
for the issuance of a social gaming license that the commission may have
adopted by rule.
�
Any rules adopted
pursuant to chapter 91 shall not be arbitrary, capricious, or contradictory to
the expressed provisions of this chapter and shall further define and clarify
the above listed conditions, rather than create new conditions for licensure.

����
�
��
-306
�
Institutional
investor.
�
(a)
�
Unless the commission determines that an
institutional investor is unqualified, an institutional investor holding less
than ten per cent of the equity securities or ten per cent of the debt
securities of a social gaming licensee's affiliate or affiliated company that
is related in any way to the financing of the social gaming licensee, shall be
granted a waiver of the eligibility and suitability requirements if:

����
(1)
�
The securities
represent a percentage of the outstanding debt of the affiliate or affiliated
company not exceeding twenty percent, or a percentage of any issue of the
outstanding debt of the affiliate or affiliated company not exceeding fifty
percent;

����
(2)
�
The securities are
those of a publicly traded corporation and its holdings of the securities were
purchased for investment purposes only; and

����
(3)
�
Upon request by
the commission, the institutional investor files with the commission a
certified statement that it has no intention of influencing or affecting the
affairs of the issuer, the social gaming licensee, or its affiliate or
affiliated company.

����
(b)
�
The commission may grant a waiver under this
section to an institutional investor holding a higher percentage of securities
than allowed in subsection (a) upon a showing of good cause and if the
conditions specified in subsection (a) are met.

����
(c)
�
An institutional investor granted a waiver
under this section that subsequently intends to influence or affect the affairs
of the issuer shall provide notice to the commission and file an application
for a determination of eligibility and suitability before taking any action
that may influence or affect the affairs of the issuer.

����
(d)
�
Notwithstanding any provisions of this
chapter, an institutional investor may vote on all matters that are put to the
vote of the outstanding security holders of the issuer.

����
(e)
�
If an institutional investor changes its
investment intent or if the commission finds that the institutional investor is
unqualified, no action other than divestiture of the security holdings shall be
taken until there has been compliance with this chapter.

����
(f)
�
The social gaming licensee, an affiliate, or
affiliated company shall immediately notify the commission of any information
concerning an institutional investor holding its equity or debt securities that
may affect the eligibility and suitability of the institutional investor for a
waiver under this section.

����
(g)
�
If the commission finds that an institutional
investor, holding any security of an affiliate or affiliated company of a
social gaming licensee that is related in any way to the financing of the
social gaming licensee, fails to comply with the requirements of this section,
or if at any time the commission finds that, by reason of the extent or nature
of its holdings, an institutional investor is in a position to exercise a
substantial impact upon the controlling interests of a social gaming licensee,
the commission may take any necessary action to protect the public interest,
including requiring the institutional investor to satisfy eligibility and
suitability requirements.

����
�
��
-307
�
Bond of social gaming licensee.
�
Before a social gaming license is issued,
the licensee shall file a bond in the sum of $200,000 with the department.
�
The bond shall be used to guarantee that the
licensee faithfully makes the payments, keeps books and records, makes reports,
and conducts games of skill, in conformity with this chapter and rules adopted
by the commission.
�
The bond shall not be
canceled by a surety less than thirty days after providing written notice to
the commission.
�
If a bond is canceled
and the licensee fails to file a new bond with the commission in the required
amount on or before the effective date of cancellation, the licensee's license
shall be revoked.
�
The total and
aggregate liability of the surety on the bond shall be limited to the amount
specified in the bond.

����
�
��
-308
�
Social Gaming license; term.
�
The term of the social gaming license
shall be ten years and shall be renewable for additional ten-year terms
according to rules adopted by the commission.

����
�
��
-309
�
Revocation of social gaming license.
�
The commission may revoke the social
gaming license if the licensee fails to begin regular gaming operations within
twelve months of receipt of the commission's approval of the application or
twelve months after a certificate of occupancy for the facility is first
issued, whichever is later, upon a finding by the commission that the license
revocation is in the best interest of the State.

����
�
��
-310
�
Social
Gaming licensee or applicant; prohibitions; ex parte communications.
�
(a)
�
A licensee or applicant shall not knowingly
initiate a negotiation for, or discussion of, employment with a member,
employee, or agent of the commission.
�
A
licensee or applicant who initiates a negotiation or discussion about
employment shall immediately provide written notice of the details of the
negotiation or discussion to the chairperson as soon as that person becomes
aware that the negotiation or discussion has been initiated with a member,
employee, or agent of the commission.

����
(b)
�
A licensee or applicant, or affiliate or
representative of an applicant or licensee, shall not, directly or indirectly,
knowingly give or offer to give any gift, gratuity, compensation, travel,
lodging, or anything of value to any member, employee, or agent of the
commission that the member, employee, or agent of the commission is prohibited
from accepting.

����
(c)
�
A licensee or applicant or any affiliate or
representative of an applicant or licensee shall not engage in ex parte
communications concerning a pending application, license, or enforcement action
with members of the commission.
�
A member
of the commission shall not engage in any ex parte communications with a
licensee or an applicant, or with any affiliate or representative of an
applicant or licensee, concerning a pending application, license, or
enforcement action.

����
(d)
�
Any licensee or applicant, or affiliate or
representative of licensee or applicant, who receives any ex parte
communication in violation of this section from a member, or who is aware of an
attempted communication in violation of this section, shall immediately report
in writing to the chairperson details of the communication or attempted
communication.

����
(e)
�
Violation of this section by a licensee,
applicant, or affiliate or representative of a licensee or applicant, may
result in denial of the application for licensure, revocation or suspension of
a license, or other disciplinary action by the commission.

SUBPART B.
�
GAMING LICENSEE OPERATIONS

����
�
��
-351
�
Conduct
of gaming.
�
Gaming conducted by the
social gaming licensee shall be subject to the following:

����
(1)
�
The site of the
facility shall be restricted to the area specified in section
�
�
�
-301(a);

����
(2)
�
The facility shall
be a stand-alone building or buildings and shall not be located within a hotel
or existing restaurant;

����
(3)
�
The facility shall
open no earlier than 7:00 a.m.
�
and shall
close no later than 3:00 a.m.
�
daily, at
which time all individual players admitted shall leave the facility;

����
(4)
�
The facility shall
not have more than thirty tables, and each table shall not seat more than ten
players and one dealer;

����
(5)
�
No person under
eighteen years of age shall be permitted in an area of the facility where
gaming is being conducted;

����
(6)
�
Wagering for
poker, bridge, cribbage, and other deck-of-card games shall not be conducted
with money or other negotiable currency;

����
(7)
�
Game equipment and
supplies customarily used in conducting gaming shall be purchased or leased
only from suppliers licensed under this chapter;

����
(8)
�
All tokens, chips,
or electronic cards used to make wagers shall only be purchased from a licensed
owner within the social gaming facility.
�

The tokens, chips, or electronic cards may be purchased by means of an
agreement under which the facility owner exchanges for the player at the
published exchange rate currency for the tokens, chips, or electronic cards.
�
The tokens, chips, or electronic cards shall
be used while within the facility only for the purpose of making wagers on
authorized social games;

����
(9)
�
The facility shall conspicuously display in
the facility or enclosure where the social game takes place problem gambling
information and telephone numbers to obtain help.
�
Facility management and staff may decline to
make social games available to a player who exhibits signs of a compulsive
behavior; and

���
(10)
�
All rules adopted
by the commission.

����
�
��

-352
�
Social Gaming facility
admission.
�
(a)
�
The facility shall only admit individuals
eighteen years of age or older; provided that if the facility serves alcohol,
the facility shall only admit individuals eighteen years of age or older.

����
(b)
�
The gaming licensee shall adopt rules
governing admission and make those rules available to the general public.

����
(c)
�
This section shall not require the facility to
admit any individual who has violated any gaming licensee rule or who is
prohibited from entering the facility pursuant to law or order of a court.

����
�
��

-353
�
In-person self-wagering.
�
All wagers shall be received from an
individual present in the facility and no individual present in the facility
shall place or attempt to place a wager on behalf of another individual.
�
Any individual who places a wager pursuant to
this subsection shall satisfy the facility admission requirements of section
���
-352.

����
�
��
-354
�
Collection of amounts owing under credit
agreements.
�
Notwithstanding any
other law to the contrary, a social gaming licensee who extends temporary
credit to an individual for the purpose of participation in a game at the
facility shall be expressly authorized to institute a cause of action to
collect any amounts due and owing under the extension of credit as well as the
social gaming licensee's costs, expenses, and reasonable attorney's fees
incurred in collection.

����
�
��

-355
�
Training occupational
licensees.
�
A social gaming licensee
may:

����
(1)
�
Train occupational
licensees; or

����
(2)
�
Enter into an
agreement with another entity to train occupational licensees, in the facility
or at a location away from the facility; provided that the training does not
violate of any other law or rule.

PART IV.
�
GAMING SUPPLIES

����
�
��

-401
�
Supplier license; when
required.
�
No person shall furnish in
excess of $500,000 worth of equipment, devices, or supplies to a social gaming
licensee unless the person has first obtained a supplier license pursuant to
this part.

����
�
��

-402
�
Supplier license;
applications.
�
(a)
�
The commission may issue a supplier license to
any person, firm, or corporation who pays a nonrefundable application fee, as
set by the commission, upon a determination by the commission that the
applicant is eligible for a supplier license and upon payment by the applicant
of a $5,000 license fee.

����
(b)
�
Supplier licenses shall be renewable annually
upon payment of the $5,000 annual license fee and a determination by the
commission that the licensee continues to meet the requirements of this part.

����
(c)
�
A person, firm, or corporation shall be
ineligible to receive a supplier license if:

����
(1)
�
The person has
been convicted of a felony under the laws of this State, any other state, or
the United States;

����
(2)
�
The person has
knowingly submitted an application for a license under this chapter that
contains false information;

����
(3)
�
The person is a
member of the commission;

����
(4)
�
The firm or
corporation is one in which a person described in paragraphs (1), (2), or (3) is
an officer, director, or managerial employee;

����
(5)
�
The firm or
corporation employs a person described in paragraphs (1), (2), or (3) that
participates in the management or operation of gaming authorized under this
chapter; or

����
(6)
�
The
license of the person, firm, or corporation issued under this chapter, or a
license to own or operate gaming facilities in any other jurisdiction, has been
revoked.

����
�
��

-403
�
Supplier requirements.
�
(a)
�
Each licensed supplier shall:

����
(1)
�
Furnish to the
commission a list of all equipment, devices, and supplies offered for sale or
lease in connection with gaming authorized under this chapter;

����
(2)
�
Keep books and
records for the furnishing of equipment, devices, and supplies to gaming
operations separate and distinct from any other business that the supplier
might operate;

����
(3)
�
File quarterly
returns with the commission listing all sales and leases; and

����
(4)
�
File an annual
report listing its inventories of gaming equipment, devices, and supplies.

����
(b)
�
No gaming supplier shall distribute supplies
and equipment worth more than $500,000 unless that distribution conforms to
standards adopted by rules of the commission.

����
�
��

-404
�
Supply repairs.
�
Any gaming equipment, device, or supply
provided by a supplier licensee may be repaired in the facility or moved away from
the facility to a location owned by the gaming licensee for repair.

����
�
��

-405
�
Supply forfeiture.
�
Any equipment, device, or supplies that
are used by any person in an unauthorized operation shall be forfeited to the
county in which the facility is situated.

PART V.
�
GAMING OCCUPATIONS

����
�
��

-501
�
Occupational license;
required.
�
No individual shall be
employed at a facility without a valid occupational license issued pursuant to
this chapter.

����
�
��

-502
�
Occupational license;
application.
�
(a)
�
The commission may issue an occupational
license to an individual upon:

����
(1)
�
Submission of an
application form prescribed by the commission;

����
(2)
�
Submission of two
sets of the applicant's fingerprints;

����
(3)
�
The payment of a
nonrefundable application fee set by the commission.
�
The amount of the fee shall be sufficient to
defray the costs associated with the search and classification of fingerprints
obtained by the commission with respect to the application and any other
expenses to process the application;

����
(4)
�
A determination by
the commission that the applicant meets the requirements for an occupational
license; and

����
(5)
�
Payment of an
annual license fee in an amount set by the commission.

����
(b)
�
Each application for an occupational license
shall be on a form prescribed by the commission and shall contain all
information required by the commission.
�
The
form shall require the disclosure of whether the applicant:

����
(1)
�
Has been issued
prior gaming-related licenses in any jurisdiction;

����
(2)
�
Has been issued a
gaming-related license in any other jurisdiction under any other name, and, if
so, the name and the applicant's age at the time; and

����
(3)
�
Has had a
gaming-related license issued from any other jurisdiction suspended,
restricted, or revoked, and, if so, for what period of time.

����
(c)
�
To be eligible for an occupational license, an
applicant shall:

����
(1)
�
Be at least
eighteen years of age if the applicant seeks to perform any function involved
in gaming;

����
(2)
�
Not have been
convicted of a felony offense in any jurisdiction or a crime involving
dishonesty or moral turpitude;

����
(3)
�
Have demonstrated
a level of skill or knowledge that the commission determines to be necessary to
operate social games in the facility; and

����
(4)
�
Have met standards
for the holding of an occupational license, as provided in rules adopted by the
commission, including background inquiries and other requirements.

����
(d)
�
The commission may deny an application for an
occupational license because the applicant:

����
(1)
�
Is unqualified to
perform the duties required;

����
(2)
�
Has failed to
disclose or stated falsely any information called for in the application;

����
(3)
�
Has been found
guilty of a violation of this chapter;

����
(4)
�
Whose prior
gaming-related permit, license, or application has been suspended, restricted,
revoked, or denied for just cause in any other jurisdiction; or

����
(5)
�
For any other just
cause.

����
(e)
�
A person who knowingly makes a false statement
on an application for an occupational license shall be guilty of a petty
misdemeanor.

����
�
��

-503
�
Occupational license; term.
�
Any occupational license issued pursuant
to this part shall be valid for a period of one year from the date of issuance
and shall be renewable annually upon payment of the annual license fee and a
determination by the commission that the licensee continues to meet the
requirements of this chapter.

����
�
��

-504
�
Occupational license;
suspension, revocation, restriction.
�
The
commission may suspend, revoke, or restrict any occupational license:

����
(1)
�
For any violation
of this chapter;

����
(2)
�
For any violation
of the rules of the commission;

����
(3)
�
For any cause
which, if known to the commission, would have disqualified the applicant from
receiving an occupational license;

����
(4)
�
For default in the
payment of any obligation or debt due to the State or any county within the
State; or

����
(5)
�
For any other just
cause.

PART VI.
�
MISCELLANEOUS PROVISIONS

����
�
��

-601
�
The state social gaming
fund; disposition of revenues collected.
�

There is established within the state treasury the state social
gaming fund to be administered by the Hawaii gaming control commission into
which shall be deposited all fees and fines collected under this chapter and
general excise tax revenues realized.
�
Moneys
from the state gaming fund shall be used to fund:

����
(1)
�
Public security at
the facility;

����
(2)
�
Administrative
expenses of the commission;

����
(3)
�
Marketing of the
facility;

����
(4)
�
The full house fund
by distributing not less than fifty per cent of the revenues realized by the
fund in each fiscal year into the applicable organizations specializing in
programs that address homelessness in Hawaii; and

����
(5)
�
A compulsive
gamblers program.

����
�
�
��
-602

�
Legislative oversight.
�
(a)
�
After the first fiscal year of operation, the
auditor shall conduct a financial and social assessment of social gaming
operations.
�
Thereafter, the auditor
shall conduct biennial financial and social assessments of gaming operations.
�
In conducting the assessments, the auditor
shall identify the financial impacts of social gaming on the state economy and the
social impacts of social gaming upon the community.
�
The auditor shall submit a report of its
findings and recommendations to the legislature no later than twenty days prior
to the convening of the next regular session after the initial and biennial
assessments are completed.

����
(b)
�
After the first full fiscal year of operation,
the auditor shall conduct a program and financial audit of the Hawaii gaming
commission.
�
Thereafter, the auditor
shall conduct a program and financial audit every four years after the initial
audit is completed.

����
�
��

-603
�
Compulsive gambler program.
�
The commission shall create and implement
a program to assist individuals who are identified as compulsive gamblers and
shall train operational licensees to identify and monitor potential compulsive
gambling behavior."

����
SECTION 3.
�
Chapter 712, Hawaii Revised Statutes, is
amended by adding a new section to part III to be appropriately designated and
to read as follows:

����
"
�712-
�
�
��
Social gaming; exempted.
�
This part shall not apply to
social gaming as authorized by chapter
���
.
"

����
SECTION
4
.
�
Section 84-17,
Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

����
"
(c)
�
The following persons shall file annually
with the state ethics commission a disclosure of financial interests:

����
(1)
�
The
governor, lieutenant governor, members of the legislature, and delegates to the
constitutional convention; provided that delegates to the constitutional
convention shall only be required to file initial disclosures;

����
(2)
�
The
directors and their deputies, the division chiefs, the executive directors and
the executive secretaries and their deputies, the purchasing agents, and the
fiscal officers, regardless of the titles by which the foregoing persons are
designated, of every state agency and department;

����
(3)
�
The
permanent employees of the legislature and its service agencies, other than
persons employed in clerical, secretarial, or similar positions;

����
(4)
�
The
administrative director of the State, and the assistants in the office of the
governor and lieutenant governor, other than persons employed in clerical,
secretarial, or similar positions;

����
(5)
�
The
hearings officers of every state agency and department;

����
(6)
�
The
president, vice presidents, assistant vice presidents, chancellors, and
provosts of the University of Hawaii and its community colleges;

����
(7)
�
The
superintendent, deputy superintendent, assistant superintendents, complex area
superintendents,
�
state librarian, and
deputy state librarian of the department of education;

����
(8)
�
The
administrative director and deputy director of the courts;

����
(9)
�
The
members of every state board or commission whose original terms of office are
for periods exceeding one year and whose functions are not solely advisory;

���
(10)
�
Candidates
for state elective offices, including candidates for election to the
constitutional convention; provided that candidates shall only be required to
file initial disclosures;

���
(11)
�
The
administrator and assistant administrator of the office of Hawaiian affairs;

���
(12)
�
The
Hawaii unmanned aerial systems test site chief operating officer; [
and
]

���
(13)
�
The
members of the school facilities board appointed by the governor[
.
]
;
and

���
(14)
�
The
executive director, assistants, officers, and employees of the Hawaii gaming
control commission.
"

����
SECTION 5.
�
All initial appointments to the Hawaii gaming
control commission shall be made within sixty days of the effective date of
this Act.

����
SECTION 6.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 7.
�
This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Tourism;
Entertainment; Social; Gaming; Poker; Legalization; Housing; Native Hawaiians;
Tax Revenue

Description:

Authorizes
a 10-year renewable license for a social gaming facility in a special district
designated for tourism.
�
Allows admission
and participation for adults.
�

Non-residents shall be required to apply for guest membership.
�
Establishes the Hawaii social gaming control
commission to monitor and measure operational activities as well as collect and
distribute tax revenue from social game operations.
�
Imposes a consumption tax on every hand and
every contest.
�
Uses revenue for housing
developments for currently houseless Native Hawaiian residents.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.