The Hawaii Finance Committee approved a bill legalizing online sports betting (HB 1308). The amended version received committee approval. However, six members voted “with reservations”.
The Finance Committee was the third and last in the Hawaii House to approve the bill. Now, the project goes to the local plenary.
Just before the vote, Chairman Kyle Yamashita offered amendments to make approval more palatable. He suggested removing the tax rate – originally set at 10% – and the licensing fee pending review. However, no agreement was reached on the percentages or values.
Additionally, Representative Sue L Keohokapu-Lee Loy said the $250,000 license fee “seems quite low for an industry that generates billions of dollars. I would love to see that license fee increase exponentially.”
In offering the amendments, Yamashita made it clear that the bill deserved continued discussion and that the committee should move forward “as a work in progress.” “We have to address the issue of the game, so I don’t think it’s a bad thing to talk about it,” he said.
Unions and industry offer support
As in previous hearings in both chambers in Hawaii, local unions supported the bill, saying they are “in favor of any new features.”
According to the entities, the budget provided can help the State cover the high cost of living. Additionally, representatives from BetMGM, DraftKings and the Sports Betting Alliance, which make up the (SBA), cited advantages of a legal market, such as giving law enforcement the tools to crack down on illegal gambling and increase tax revenue.
BetMGM head of government affairs Jeremy Limun suggested that tax revenue for Hawaii, with a population of 1.45 million, would range from $10 to $20 million per year based on a 10% tax rate. This assumes revenue per operator of between US$100 to US$200 million per year and which could generate more than US$1 billion annually.
For comparison, the state of Maine (population: 1.4 million) legalized the activity in November 2023. In just the first 12 months, $550 million was wagered and the state collected $6 million in tax revenue. Maine also has a 10% tax rate.
In West Virginia (population: 1.77 million), where online betting has been active since September 2019, total transactions over four and a half years are $2.8 billion. The state collected a total of $25.9 million in tax revenue.
Opposition points out financial issues
However, the opposition pointed to the risk of addiction as a fundamental negative point. In particular, concerns have been raised about an increase in bankruptcies and some crimes associated with excessive gambling.
Despite this, according to the bill, only online sports betting would be allowed and would limit the number of licenses to four. Among payment methods, customers could fund accounts with credit cards, which is prohibited in some states, including Iowa, Massachusetts and Tennessee.
Additionally, the proposal would create a fund to prevent and treat problem gambling. Hawaii’s legislative session runs until May 2 and the deadline for the bill to pass from one chamber to the other is March 6.
