A sports betting bill, HB 1308, sponsored by Representative Daniel Holt, continues to gain legislative traction and could finally bring gambling to the Aloha State.
Closer Than Ever
Hawaii is only one of two states without casinos, sports betting, lotteries or daily fantasy sports, with Utah being the other. However, that distinction could be changing in Hawaii if Representative Daniel Holt’s House Bill 1308 becomes law.
The bill has cleared several critical hurdles, with it surviving several House Committees as well as the Senate Commerce and Consumer Protection and Economic Development and Tourism committees. However, the recent approval by the powerful Senate Ways and Means Committee is a clear signal that Holt’s bill could pass legislative muster.
After emerging unscathed through the House committees and gaining approval by a 2-to-1 margin on the House floor, the next step is a full Senate vote, which could mean sports betting is up and running at some point this year.
Kathleen Owen, an attorney with an outside law firm representing the Sports Betting Alliance, an industry trade group comprised of BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel, testified:
“A regulated, competitive mobile sports betting market would replace the predatory, illegal platforms already operating in Hawaii and generate new revenue for the state through a policy that has the support of constituents.”
The bill in its original form called for a $250,000 licensing fee for a five-year term and a 10% tax on sports betting revenue, but those elements have been eliminated for the time being. The bill would also award at least four online sportsbooks, but there has been no provision made for retail sportsbooks.
Regulation Proclamation
As sports betting becomes more of a reality than a fantasy during this legislative session, lawmakers are asking themselves under what government agency sports betting would be governed. The Business, Economic Development, and Tourism Department, as well as the Department of Commerce and Consumer Affairs, have both been discussed as possibilities.
National sportsbooks like BetMGM, DraftKings, Fanatics Sportsbook and FanDuel, all of which are affiliated with the Sports Betting Alliance, the industry trade group that has been lobbying Hawaii’s lawmakers, would be the logical choices to be awarded those original four licenses.
The anticipated revenue to the state is estimated to be between $10 million and $20 million, and a 2022 study reveals that Hawaiians are all for it, citing that 73% of the state’s residents support legalizing and regulating mobile sports betting for those 21 and over.
Nevertheless, there has been backlash from some organizations and lawmakers who believe the juice isn’t worth the squeeze. These groups argue that increased addictive gambling will cause financial ruin for Hawaii’s most vulnerable segment of the population, while others believe it is a gateway for casinos, iGaming and other forms of gambling.
However, the bill’s sponsor, Representative Holt, argued against those gloom and doom predictions and showed a willingness to raise the 10% tax rate, saying, “I personally don’t think we’re going to be creating a bunch of new gamblers. We’re just going to be collecting the tax revenue from those who already choose to participate in this form of entertainment. I do agree with all the amendments being made. The fees got to go up; tax has got to go up.”
