Hawaii’s Digital Sports Betting Bill Heads to Conference Committe

Waikiki Beach, Hawaii — April 17, 2025 — As waves lap the shore just blocks from the state capitol, Hawaii’s long-standing opposition to legalized gambling may be tested like never before. House Bill 1308 (HB 1308), a proposal to legalize digital sports betting across the islands, has cleared major hurdles this legislative session—but it now faces perhaps its toughest test yet.

After a late-stage amendment by the Senate reinserted tax and fee provisions previously removed by the House, lawmakers must reconcile significant differences in a tight two-week window before the session adjourns on May 2. The bill is now headed to a conference committee, where representatives from both chambers will attempt to strike a final compromise.

A Surprising Journey Through the Legislature

Few expected HB 1308 to make it this far. Introduced earlier this year, the bill represents one of the most aggressive efforts yet to bring regulated sports wagering to Hawaii—one of just two U.S. states, along with Utah, that currently bans all forms of commercial gambling.

HB 1308 would legalize statewide digital sports betting, allowing at least four operators to offer online platforms to residents aged 21 and over. Notably, the legislation includes no provisions for physical, in-person sportsbooks. This digital-only approach has been seen by some lawmakers as a way to limit gambling’s footprint in local communities.

The bill initially proposed a 10% tax on operator revenue and a $250,000 application fee. Those provisions were removed in the House Finance Committee, where Representative Sue L Keohokapu-Lee Loy raised concerns that the fees were insufficient for such a lucrative industry.

“It appears rather low for an industry that makes billions of dollars,” Keohokapu-Lee Loy said during deliberations. “I would love to see that license fee go up exponentially.”

The Senate, however, disagreed. In a flurry of floor amendments last week, lawmakers reinstated the 10% tax and application fee and reassigned regulatory authority to the Department of Law—a move that surprised some in the House. The House ultimately rejected the Senate’s version on Friday, sending the measure into conference committee negotiations with the clock ticking.

Tax Rate and Revenue Projections Raise Eyebrows

Beyond disagreement over fees, the bill's projected financial impact has also drawn scrutiny. During a House committee hearing, BetMGM’s head of government affairs, Jeremy Limun, estimated the state could generate between $10 million and $20 million in annual tax revenue with a 10% tax rate.

But some lawmakers and analysts have questioned those numbers. Hawaii’s population of 1.45 million is significantly smaller than most states with legalized betting. Critics argue that comparable states have struggled to reach such revenue levels without higher tax rates or broader gambling offerings. “It’s an optimistic projection, to say the least,” said one legislative staffer familiar with the discussions, who spoke on background. “And it’s based on a tax rate that’s below what most states are using right now.”

Indeed, recent trends show states either starting with or moving toward higher tax rates. New York and Pennsylvania, for example, tax online sports betting operators at 51% and 36%, respectively. Even more moderate states, like Michigan and Arizona, come in higher than Hawaii’s proposed 10%.

“This is a new revenue stream, and we have a responsibility to the public to get it right,” Keohokapu-Lee Loy said. “That means ensuring we’re not leaving money on the table.”

In a state with deep cultural reservations about gambling, HB 1308 represents a shift in the conversation. While several sports betting bills have been introduced over the past decade, none have advanced this far. That momentum reflects changing national attitudes—nearly 40 states have now legalized some form of sports betting since the U.S. Supreme Court struck down the federal ban in 2018.

Still, resistance remains. Opponents argue that legalizing sports betting could increase addiction, burden families, and undermine local values. “We have to be extremely careful,” said Sen. Kurt Fevella, one of the more vocal opponents of gambling in past sessions. “Once you open the door, it’s very hard to close.”

Supporters, meanwhile, frame the bill as a pragmatic move to regulate an activity already happening informally. Illegal offshore betting sites are readily available in Hawaii, with little consumer protection and no benefit to state coffers.

 

This is already going on—what we’re trying to do is bring it above board, regulate it, and generate revenue for local priorities,” said Rep. Daniel Holt, a proponent of the bill. “It’s about transparency and accountability.

Countdown to May 2

Now, with the legislative session set to adjourn in just over two weeks, the fate of HB 1308 rests with the conference committee. Lawmakers must resolve not only the tax rate and application fee, but also the structure of regulatory oversight and finer points of implementation.

If an agreement isn’t reached by May 2, the bill will likely stall, pushing the conversation into next year’s session—if it resurfaces at all. As Hawaii weighs the promise of new revenue against the risks of gambling expansion, the debate over HB 1308 encapsulates a broader national question: how to modernize laws in a digital age without compromising local values.

For now, Hawaii stands at a crossroads, with high stakes on both sides of the table.