Hawaii has no legalized gambling. The island state is one of only five in the U.S. with no lottery. And for good reason.
When you’re Hawaii, with verdant hills, the warm Pacific and plenty of places to stay in near perfect weather, bringing in tourists and other visitors has not been much of an issue. Just turn on the lights, so to speak. With a robust tourism industry, gambling has proven a hard sell.
But this year, supporters may have come up with a winning formula.
A pair of bills just got hearings in the House Economic Development Committee: House Bill 2762 and sports betting legislation from House Bill 2765.
Rep. Daniel Holt introduced an online sports betting bill. As written, Holt’s bill would allow sportsbooks operating in at least three other states to also operate in Hawaii. He did not set a tax rate in his proposal. Holt’s bill puts sports betting under the Department of Business and Economic Development.
“Our tourism revenues are flat,” he told Legal Sports Report. The bill “is to provide tourists another option to come and spend their money here so the state can receive tax revenues.”
HB 2762 would issue a single 40-year license for a new hotel casino on Oahu, on land controlled by the Office of Hawaiian Affairs. The bill would also establish a state gaming control commission to regulate the endeavor.
Senate President Ronald Kouchi also introduced a sports betting bill, SB 3376, which includes online poker. Kouchi’s legislation creates just one license too, with most of the revenue going to fighting wildfires. That issue is near and dear to Hawaiians, where wildfires caused $6 billion in damage in 2023.
The bill passed on first reading.
This year, the Sports Betting Alliance put its weight behind the intended laws. The alliance includes BetMGM, DraftKings, Fanatics and FanDuel.
SBA representative Kathleen Owen said an estimated $277 million in sports bets are made in Hawaii each year. The SBA estimates Hawaii could generate $9 million in taxes from sports betting revenue annually.
Hawaii has found mobile sports betting a tough sell in the halls of government, including last year, when a bill never made it out of the House. Senate bill 3376 makes another effort. The goal is also to fight illegal gambling affecting thousands in the islands.
The SBA predicts a regulated sports betting system in Hawaii with a tax rate of 70 percent for the first year of wagering. The rate would decline 5 percent each year. The maximum bet is $1,500 per event. The proposal includes a stringent application process for operators, with a single one gaining entrée to the market after meeting the arduous requirements. There is no provision for retail wagering by the way.
Operators would submit an application for a license within 60 days of the window for submission. Prospective operators would have to include a detailed development plan with potential employee estimates, economic benefits to the community, anticipated growth in receipts and a training strategy for the workforce.
The application process cost $50,000, but the license lasts 10 years.
