A bid to legalize and regulate online sports betting in the Aloha State has the attention and backing of major mobile gaming operators.
The Hawaii House of Representatives economic development committee met Friday and heard testimony regarding H.B. 2765, which would create a framework to license online sportsbooks to accept action from those 18 and older on the island state.
Committee members heard support for the bill from representatives for DraftKings and the Sports Betting Alliance (SBA), whose members are BetMGM, DraftKings, Fanatics, and FanDuel.
Kathleen Owen, an attorney appearing on behalf of the alliance, said sports betting is already happening in Hawaii — just not with anyone overseen by the state, which has no legalized gambling.
“An estimated $277 million is wagered annually in Hawaii,” Owen told the committee. “This money is being wagered by residents with unregulated, illegal offshore websites and with illegal bookies where there is no oversight, no consumer protection, and no revenue generated for the state.”
The Hawaii House of Representatives economic development committee is hearing feedback today on H.B. 2765, which would authorize and regulate online sports betting on the island state. Sportsbook operators are testifying in support of the measure. pic.twitter.com/5LtMfXxlEM
— Geoff Zochodne (@GeoffZochodne) February 2, 2024
The SBA estimates Hawaii could earn around $9 million a year in extra tax revenue if it were to legalize and regulate online sports betting.
“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,” Owen said in her written testimony. “According to a 2022 poll conducted by Anthology Research, 73% of Hawaii residents surveyed support legalizing and regulating online sports wagering in Hawaii for adults 21 years of age or older to generate annual tax revenue.”
H.B. 2765 could provide that regulatory framework if it were to pass, which is by no means a certainty. There are multiple pieces of gambling-related legislation working their way through the legislature at the moment, and no guarantee a majority of lawmakers will support any of them.
Pushback to the measure is taking shape as well. The Honolulu Police Department voiced its opposition in written testimony, stating that it "believes that all forms of gambling are associated with a great amount of social ills and financial ruin for many people."
Rep. Daniel Holt, the chairman of the economic development committee and sponsor of H.B. 2765, said any decisions on the legislation (as well as H.B. 2762, which aims to establish a hotel and casino on Oahu) will wait until another hearing next week.
“My intentions for these measures are not to keep poor people poor,” Holt said on Friday. “It's to provide tourists another option to come and spend their money here so the state can receive tax revenues.”
Rookie operators need not apply
Under H.B. 2765, an entity could qualify for a license from the Hawaii Department of Business, Economic Development, and Tourism if it already offers online sports betting legally in at least three U.S. jurisdictions. The cost for a three-year license is still to be determined — the tax rate is TBD, too — but the holder could take wagers across the entire archipelago.
“A sports wagering operator shall accept wagers on wagering events only through mobile applications or digital platforms approved by the department or a patron's sports wagering account using a mobile application or digital platform approved by the department,” the bill states. “The branding for each mobile application or digital platform shall be determined by the sports wagering operator.”
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