Legal Gambling in Hawaii on Agenda as Working Group Begins Research

A new working group in Hawaii has begun research on the possibility of legalizing gambling in the state. The 24-member Tourism and Gaming Working Group aims to develop a comprehensive gambling policy for the state.

Members include lawmakers, law enforcement, gaming industry representatives, academics, and state agency leaders.

The panel will discuss the potential of legalizing certain forms of gambling in the state and will make recommendations to the legislature by the end of the year.

Hawaiians Gambling Illegally

At the group’s first meeting on Thursday, the focus was on understanding the illegal gambling marketplace. Mike Lambert, director of the state Department of Law Enforcement, said that $700 million to $800 million a year flows through illegal gambling enterprises statewide.

He emphasized that illegal gambling card rooms are associated with several other crimes, including drug dealing, weapons, and robberies.

Rep. Greggor Ilagan, co-chair of the working group, said the panel can help manage the black market. He stated, “We have a prohibition of gaming in the state, and even though the prohibition of gaming is in place, we have illegal gambling happening, and it’s an industry that’s up to $800 million on an annual basis.”

“That is something we could simply ignore, or we could figure out a way, not only to control and manage what’s happening now, and figure out with our working group and with our expertise on how to improve the current situation.”

In addition to illegal card rooms, many Hawaiians gamble online at unlicensed platforms, including sweepstakes casinos. Several platforms decided to withdraw from the state last year, including Baba Casino, Fliff, and Thrillz, but other operators remain active.

Sports Betting on Agenda

Hawaii is one of only a select few states in the US that have no legal form of gambling. The state came close to legalizing sports betting last year, with lawmakers in both the Senate and House approving a bill.

However, the push ultimately failed as legislators could not agree on the details, such as the tax rate and how the funds should be spent. Gov. Josh Green supported the effort, citing the additional revenue, which could be used to fund the multi-million-dollar Aloha Stadium project.

Others have opposed legalization and believe the working group is a dangerous step in that direction. Steve Alm, the prosecuting attorney for the City and County of Honolulu, expressed concern that the group will promote the idea of legal gambling.

Alm stated, “Setting this up would just open the door to legalized gambling here in Hawaii, and sports gambling casinos will be big deals.”

He rejected the argument that, because there is already an illegal market, lawmakers should take steps to regulate gambling. He added, “In fact, the illegality of this activity in our state is the very tool that is keeping many more from participating in it.

“Once we promote legalized gambling and put the societal stamp of approval on it, many individuals who are deterred from wasting their lives and finances away will then participate. This is not worth the few extra tax dollars legal gambling would generate.”

A report last year estimated that legal sports betting would generate about $13 million in tax revenue annually for the state. With prediction market platforms now also offering Hawaiians opportunities to wager on sports, it could increase the push towards legalization.

Following the failure of the state to approve sports betting last year, the Sports Betting Alliance said, “Hawaii can’t afford to ignore the illegal sports betting market any longer. A legal, regulated market would provide fundamental safeguards and protections for players while generating millions in revenue for Hawaii. It’s time to get this right.”