Hawaii Inches Toward Legal Mobile Sports Betting

Hawaii's Senate Ways and Means Committee took a significant step toward legalizing mobile sports betting in the state, approving House Bill 1308 (HB 1308) and moving it to the full Senate floor. This decision comes after months of deliberation and amid considerable opposition, particularly from groups concerned about the potential risks associated with expanded gambling.

HB 1308, which passed the Ways and Means Committee by an 11-2 vote, represents a crucial milestone for proponents of legalized mobile sports betting in Hawaii. Four senators voted “aye with reservations,” indicating that while they supported the bill's passage, they held concerns about certain aspects of the legislation. This bill, however, is not yet law; it must now be debated and voted on by the full Senate before moving on to the House for potential concurrence.

A Step Toward Legalized Mobile Sports Betting

The passage of HB 1308 follows approval from two other key Senate committees—Economic Development and Tourism, and Commerce and Consumer Protection—making it the third and final committee required for the bill to reach the full Senate. This level of bipartisan support suggests a growing momentum for legalized sports betting in Hawaii, an issue that has been widely debated for several years.

Supporters argue that legalizing mobile sports betting could bring significant economic benefits to the state, including new revenue streams and job opportunities. Proponents also note that legalized betting could offer a safer, regulated alternative to illegal sports betting activities that are believed to be taking place within the state.
Opposition and Concerns

Despite the advances made by HB 1308, the bill faces strong opposition from a variety of groups within Hawaii. One of the most vocal opponents is the state attorney general’s office, which has raised concerns over the potential for increased problem gambling in Hawaii. In written testimony, the attorney general’s office expressed concerns that the bill might pave the way for unregulated and unlicensed gambling, especially in the realm of fantasy sports, which has become an area of significant scrutiny.

These concerns reflect broader unease about the social and economic implications of expanding gambling in Hawaii. Critics warn that the state may see an increase in gambling addiction and associated social harms, including financial instability and family issues.

Financial Provisions and Taxation

HB 1308 includes several key provisions that have been closely scrutinized. One of the most notable aspects of the bill is the tax structure proposed for mobile sports betting operations. Initially, the bill passed through the House without specific licensing fees or a tax rate. However, the Ways and Means Committee amended the bill, introducing an initial license fee of $250,000 for operators and a $10,000 initial or renewal supplier license fee.

Additionally, the bill reintroduces a 10% tax rate on adjusted gross revenue (AGR) for mobile sports betting operators, which was initially removed in the House amendments. This tax rate is among the lowest in the United States when compared to other states with commercial wagering.

The proposed tax structure includes earmarks for specific social causes. Seven percent of the tax receipts would be allocated to a newly created special fund dedicated to problem gambling prevention and treatment, while another 7% would be directed toward programs supporting education in the state. These earmarks reflect an attempt to balance the economic benefits of sports betting with efforts to mitigate its potential harms, particularly in terms of gambling addiction.

 

Seven percent of the tax receipts would be allocated to a newly created special fund dedicated to problem gambling prevention and treatment, while another 7% would be directed toward programs supporting education in the state.

The Road Ahead

With HB 1308 now moving to the Senate floor, the debate over mobile sports betting in Hawaii is far from over. While the bill has garnered considerable support from the legislature, it faces significant opposition from those who argue that it could exacerbate gambling problems in the state. As the bill advances, lawmakers will need to carefully consider the potential economic gains against the risks posed by an increase in gambling-related issues.

If passed, Hawaii would join the growing number of U.S. states that have legalized sports betting, signaling a shift in the state’s approach to gambling regulation. However, with ongoing concerns about its social impact, the future of HB 1308 remains uncertain, and the final outcome will likely hinge on the balance between economic interests and the protection of vulnerable communities in Hawaii.