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The Harsh Laws on Illegal Gambling in Hawaii

Published on October 25, 2014, 4:32 pm

by Jeff Grant Twitter account Jeff Grant LinkedIn account

The definition of the word “gambling” is being challenged in Hawaii right now as the operators of an arcade chain called Winner'z Zone respond to a cease-and-desist letter from a Honolulu prosecutor. Attorney Keith Kaneshiro warned the company in his letter that the chain would be charged with illegal gambling if they don't remove all Products Direct Sweepstakes machines from the premises.

Gambling is illegal in Hawaii, including casino activity, sports betting, and lottery. According to Kaneshiro, the gaming machines in question are not the innocent arcade games Winner'z Zone proclaims them to be; they're illegal gambling machines.

Illegal Gambling in Hawaii

How Products Direct Machines Work

A Products Direct machine accepts money from patrons. In exchange, patrons play a game on the machine, receive coupons for products available on the Internet, and are entered into a sweepstakes. Different gaming choices are available, including a video poker option. In Hawaii, however, machines with the video poker option have already been prohibited by the Honolulu Liquor Commission.

Prosecutor Kaneshiro argues that all of the sweepstakes machines, not just the video poker ones, are illegal because they offer games of chance and cash prizes. In the eyes of Kaneshiro, a gaming scenario with these variables constitutes gambling. Winner'z Zone representatives disagree with Kaneshiro's definition of a “game of chance for money.” They maintain that their gaming machines provide innocent arcade fun and nothing more.

Until now, other Products Direct machines were deemed acceptable in the state. Greg Nishioka, a representative from the Liquor Commission, announced in 2012 that Products Direct games would continue to be legal until law enforcement stated otherwise. At the same time, he acknowledged the controversial nature of the games.

Sweepstakes Payouts

The Products Direct machines have never been regulated by the government, meaning the Liquor Commission never required businesses to report sweepstakes payout data to them. Anecdotal reports indicate that payouts run the gamut from $75 to $5,000. There have also been whispers of under-the-table video poker offerings in some Hawaii establishments, although Nishioka maintains that he and his staff are "constantly on the lookout" for such foul play.

Winner'z Zone: "Stunned" by Accusations

Winner'z Zone representative Ruth Limtiako said her company was "stunned" by the accusations and that their business model has always been to "operate within the law." As such, the company is now seeking legal advice on the matter. No matter what the outcome of this particular case, the dubious nature of how gambling is defined by different entities has definitely been brought to light by this issue.

Other Hawaii Businesses Targeted

As of May 12, authorities had expanded their gambling witch hunt. Winner'z Zone is just one of approximately 70 Hawaii businesses under fire for their use of questionable machines. A cease-and-desist letter sent to Tracy Yoshimura, owner of an arcade called Prize World, stated that the Honolulu police were aware of the illegal activities taking place in Yoshimura's business. The letter specifically admonished Prize World's use of Products Direct machines, Panikka Coupon kiosks, Fish Hunter games, coin-pusher games, pull-tab dispenser games, and many more.

Prize World's machine 'Fish Hunter'
Prize World's machine 'Fish Hunter'

Kaneshiro told the press that the cease-and-desist letter received by Prize World was not intended for public eyes. The prosecutor said the letter was a private warning, and that the business would have a chance to dispose of the illegal machines before mandatory shutdown. Yoshimura was one of nine indicted earlier this month on charges of racketeering, money laundering, and promoting illegal gambling. The indictment was a sealed one provided by an Oahu grand jury, but attorney Keith Kiuchi has already come forward to claim Yoshimura and others as his clients.

Kiuchi told the press that at least one of his clients had attempted to get legal clearance from the Attorney General's office before opening an arcade business. At the time his client's business plan was presented to the Attorney General, Kiuchi said that the legality of the machines was not clarified.

The Definition of "Gambling"

Different entities define the term gambling in different ways. According to the Problem Gambling Institute of Ontario, it is a "deliberate effort to stake valuables . . . on how some event happens to turn out." The aforementioned machines at Winner'z Zone involve the staking of money in exchange for a shot at gaining Internet coupons and possibly winning a sweepstakes. Whether or not "possibly winning a sweepstakes" is the same as staking valuables on the outcome of an event is unclear.

Here is a look at how other well-respected entities define the word:

  • The online Oxford Dictionary says that playing "games of chance for money" is the true definition of the gambling.
  • The American Gaming Association differentiates between "gaming" and "gambling." The former term dates back to the 1500s, predating the latter term by almost 300 years. According the the AGA, gaming is the "action or habit" of playing a game of chance for a stake. The term "gambling" historically has a more derogatory connotation, implying out-of-control players who wager over-the-top stakes. By 1987, the two terms became interchangeable, according to the AGA.
  • In an attempt at comedy, the Urban Online Dictionary defines gambling as "The surest way of getting nothing from something."
The mean of 'Gambling' by the Oxford Dictionary
The mean of 'Gambling' by the Oxford Dictionary

Poker: Not Necessarily Gambling

In the age-old struggle to define the word "gambling," some have argued that poker is not gambling because it is a game of skill, not chance. In 2012, a back-room game of poker on Staten Island resulted in the arrest of Lawrence DiCristina, the man responsible for the clandestine game. A judge by the name of Jack Weinstein threw out the case, arguing that the gaming operator wasn't in violation of any laws because poker is not technically gambling.

An appeals court later reversed Judge Weinstein's decision, and DiCristina was convicted of a crime. He faces a maximum of 10 years in prison. Interestingly, Weinstein will be the one responsible for DiCristina's sentencing.


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