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Read Full BioA new bill has been introduced in Hawaii that proposes legalizing sports betting in the Aloha State. This year could see the state finally allow legal gambling as lawmakers eye tax revenue and fight against the rise of prediction markets.
The state came closer than ever to legalizing sports wagering last year, with both the Senate and House passing versions of bills. However, in the end, lawmakers could not agree on the final details before the legislative session ended.
Rep. Daniel Holt, the sponsor of last year’s bill, is again spearheading the latest effort. He has frequently lamented the state’s lack of legal gambling as leading to a loss of essential revenue for Hawaii.
Rep. Holt introduced HB2570 in the House, which passed its first reading and has been referred to several committees for consideration. Sen. Dru Kanuha has also filed a companion bill (SB3303) in the Senate.
Terms of New Bill
The bill’s key terms include a 15% tax on revenue generated by sportsbooks. Of this, 10% will go to the state’s general fund, 2% to the University of Hawaii at Manoa athletic department, 2% to a Native Hawaiian organization, and 1% to the Hawaii Employees Lifeline Program.
Of the revenue going to the general fund, 7% has been allocated to problem gambling support initiatives, while another 7% will be used for state education programs. The state will also charge $500,000 for licenses.
Last year, lawmakers proposed a 10% tax rate, and a license fee of $250,000. The higher charges may help persuade opponents that legalization can generate substantial revenue for the state.
Gov. Josh Green has voiced his support for legalization to generate additional state funds. Green suggested estimated annual revenue of $13 million could help fund the new multi-million-dollar Aloha Stadium project.
Regulation Could Remain Sticking Point
Another sticking point last time out was on which agency would be responsible for regulating sports betting in Hawaii. Honolulu Police Department Chief Joe Logan stated, “It’s nearly impossible to regulate in a way that truly protects consumers. Our department sees firsthand how gambling-related crime erodes the safety of neighborhoods.”
The legislation proposes that the Department of Business, Economic Development, and Tourism regulate sports wagering. The department has set up a working group to develop a comprehensive gambling policy for the state.
In the first meeting last week, members cited the fact that Hawaiians are already gambling illegally, and legalization could be a way to control the industry.
Opponents, including Steve Alm, the prosecuting attorney for the City and County of Honolulu, argued that the illegality of gambling is preventing many people from participating in the activity. He warned against legalizing online betting as a “high-tech pipeline to addiction and financial ruin.”
While considering legalization, Hawaiian lawmakers have also introduced legislation to ban prediction markets, which currently allow residents to wager on sports.
The coming months should determine the state of gambling in Hawaii. It is one of only two states, along with Utah, that have no legal form of gambling.
