Hawaii is one of only two states in the U.S. (along with Utah) to prohibit all forms of gambling—not only casino games, sports betting and betting on horse racing, but lotteries and even charitable sweepstakes. But how about daily fantasy sports?
Hawaii state Rep. Angus L. K. McKelvey has sponsored a resolution that could end the debate on DFS by defining it as skill-based, not gambling and therefore permissible in the state.
His goal is to attract more FITs (free independent travelers) with discretionary income who come to Hawaii and “find themselves locked out of their DFS apps.
“A lot of them are very engaged, so it’s a damper on the tourist experience,” McKelvey told GGB News. “An ancillary reason is that all these western states allow DFS,” which is Hawaii’s prime feeder market.
There is “no law on the books” against DFS in Hawaii, he said, but there is a holdup: in 2016, former Attorney General Doug Chin declared all DFS to be gambling. That ruling rendered the games illegal in the state.
Now hearings are underway to confirm Governor David Ige’s appointment of acting Attorney General Holly T.M. Shikada. Shikada would replace Clare Connors, who resigned in December.
McKelvey included DFS as part of a larger gaming legalization bill that is in limbo in 2022. “Unfortunately, gambling as a whole was deferred for the year,” McKelvey said. “We were trying to stress the revenue. The provider was willing to do Air B&B-type collecting of taxes. Taxes could be collected at their end. That was a plus.”
Since he doesn’t consider DFS to be gambling, McKelvey is sponsoring a resolution that would ask Shikada, once sworn, to review and reconsider Chin’s opinion.
“DFS is legal in the state of Hawaii,” he insists. “You have an attorney general’s opinion that is flawed. If it was revisited by the new attorney general, she would issue a new opinion,” and presumably DFS would be allowed.
Several sportsbooks, including DraftKings and FanDuel, are interested in offering DFS in the state, but have said they won’t try to do business there as long as the AG’s opinion stands.
“They don’t want the legal liability of risk,” said McKelvey, who emphasized that the providers are only interested in providing DFS games—not sports betting, though their presence in other states, like California, is seen as a precursor to a legal sports betting landscape.
Though the gambling bill is “not active right now,” McKelvey added, a new AG opinion could make the issue moot. “If she says it’s legal, there’s no reason to do anything with a bill. We’ve told the providers that’s why no one has busted anyone. There’s nothing on the books.”
The standing opinion “is quite long in the tooth and the person who did it was naive about statistics in games of skills and what other states are doing. DFS is not blackjack, it’s not roulette. You have to have skills. You have to know things like the home field advantage, the effects of snow and the effects of Covid in picking a roster. A computer can’t pick a roster. If it could, it would be random.”
McKelvey has another reason to push DFS—he’s a longtime fan of the activity, “which is legal,” he insists again, “and which I’m good at it. I’ve always thought it would be fun to do the daily. My fantasy teams are done for the year. I challenged the providers themselves: ‘Why don’t you just do it? No one has been busted.’ They said they were publicly traded, and didn’t dare.”
Shikada is undergoing Senate confirmation, and McKelvey hopes his resolution will be heard in committee within a couple of weeks. “Basically, because it’s so innocuous to ask the attorney general to reexamine it. I think it deserves a new opinion. That will remove the stigma and concern of operating in this marketplace.”
Lawmakers continue to be cautious about DFS as well as casino games and sports betting. While gambling is banned in Hawaii, it still exists, in illegal game rooms on Oahu and in cock fights. According to CivilBeat.org, residents of Hawaii “pump millions of dollars into the economy of Nevada, a destination that is so popular it has become known as the ‘ninth island.’”
The National Council on Problem Gambling (NCPG) estimates that 24,000 people in the islands struggle with a gambling disorder (the state Department of Health has no supporting data). Moreover, Hawaii is one of the few states that does not allocate any public funding to treat the problem.
“There’s not a lot of opportunities for people to get gambling-specific help, that entire system is absent,” said NCPG Executive Director Keith Whyte.
Once again, McKelvey insists the argument doesn’t apply, because DFS does not constitute gambling. “I feel—as other states have shown—the chance of randomly picking a slate of players is clearly more skill-based, compared to blackjack. It’s more like solitaire.”