Hawaii is just a few steps away from legalizing sports betting after bill HB1308 passed the Senate on Tuesday.
The bill will now return to the House with some amendments. It was originally passed in the House, and if it does so again, then it would only take a signature from Gov. Josh Green to be passed into law.
We reported last week on the bill being approved in the Senate Ways and Means Committee. It was approved there by a margin of 11-2, but the final vote on Tuesday was much closer at 15-10. There was strong opposition and even reports of an observer berating lawmakers following the approval.
“Shame on all of you,” they yelled. “You represent the people, not your self interest.”
Sen. Sharon Moriwaki spoke on behalf of many of the no voters with concerns about the burden for the Department of Law Enforcement to oversee the new law. The bill is scheduled to take effect in just three months on July 1st.
One of the amendments to the bill puts the Department of Law Enforcement in charge of regulation instead of the Department of Commerce and Legal Affairs as originally proposed.
Sports betting to bring in needed revenue
Despite opposition, legalized sports betting could be a big boost for the state’s budget. Sen. Angus McKelvey cited financial concerns for voting in favor.
“We need this revenue because of what we are facing in the state of Hawaii from this unprecedented disaster in Washington D.C. It’s not just the blatant up front cuts, it’s the inflation. It’s the tariff wars. Screws, right now, have gone up 70%,” McKelvey stated.
The bill proposes a tax rate of 10% and licenses will cost operators $250,000. BetMGM estimated that legalization of online sports betting could generate between $10 – $20 million in tax revenue. Maine, which has a similar population to Hawaii, applied the same tax rate of 10% and gained $6 million in tax revenue in 2023.
Rep. Daniel Holt who proposed the bill played down concerns about logistics and also looked at the potential financial gains. Holt stated, “It’s not a lot of infrastructure needed. Not a brick and mortar for this current proposal so, you know $10 million in tax revenue at the minimum.”
A legal alternative to illegal gambling
Sen. Lynn Decoitte was also in favor of legalizing, stating, “You know we have a lot of illegal stuff going on. Why not legalize? Why not regulate? Pandora’s box is open.”
The American Gaming Association estimated there was over $300 million bet illegally in Hawaii in 2022. Since then, the opportunities for sports betting have grown with prediction markets and crypto sportsbooks.
“We get it – the Super Bowl, the football pools and everything,” said Decoite. “I believe it’s an opportunity for the community to weigh in. Is it a good thing? I don’t know. But we see it day in, day out. It’s also a source of revenue that I think could help the state.”
The bill would initially allow for four sportsbooks in the state as well as regulated fantasy sports betting. Companies will already be lining up to fill the spots after the Senate approval.
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