Hawaii Sports Betting Bill Stumbles in Senate Committee

A promising gaming bill had Hawaiians optimistic that mobile and retail sports betting would arrive sooner rather than later in the Aloha State. However, a recent setback has dashed those hopes, and it appears that the legislature will not act again on this bill.

Committee Blockade

Senator Lynn Decoite’s sports betting bill, SB 1569, was well received by the Senate Economic Development and Tourism Committee, garnering a 5-0 vote with amendments, but the Commerce and Consumer Protection deferred it at a recent decision-making hearing.

“After reviewing the testimony, the recommendation is to defer,” read Chair Donovan M. Dela Cruz. There was no further discussion from the Chair, nor were there any questions or rebuttals.

This could spell the end of the legislative road for what was one of the most promising gaming bills this session. Several industry executives have been outspoken about the need for a regulated sports betting industry in Hawaii, and many lawmakers agree.

Industry Advocates Push for Regulation

Kathleen Owen, an attorney with the law firm Orrick, Herrington & Sutcliffe 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. According to a 2022 poll conducted by Anthology Research, 73% of Hawaii residents support legalizing and regulating online sports wagering in Hawaii for adults 21 years of age or older to generate annual tax revenue.”

Companion Bill Still Alive

All is not lost quite yet for sports betting to be passed during this legislative session, as Representative Daniel Holt’s HB 1308, a companion sports betting bill in the House, is gaining traction, albeit with amendments and some reservations from fellow lawmakers.

Committee Approvals with Reservations

Last week, the House Committee on Economic Development and Technology approved the bill by a 6-0 vote. It subsequently won approval from the House Finance Committee by a 12-3 margin, but half of the yes votes were with reservations. The Chairman of the House Finance Committee, Kyle Yamashita, labeled the bill “a work in progress.”

“I know there are concerns from many of the members…” Yamashita said. “The setting up of the regulatory process will obviously take some work. But every once in a while, we do bring up gambling. I don’t think it’s a bad thing to talk about it every so often. I want to keep this thing moving.”

The bill has now been moved to the full house, but amendments have taken the proposed licensing fee and tax rate on sportsbooks’ revenues out of the bill to be discussed at a future date should it advance further.

Addressing Gambling Concerns

One of the issues lawmakers have been concerned about is the potential for increased gambling addiction, and it was a topic that Representative Holt addressed head-on. He also stated he agreed with those who felt the licensing fees and tax rates were too low.

“I personally don’t think we’re going to be creating a bunch of new gamblers,” said Holt. “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 fee’s got to go up; tax has got to go up.”