Senate Committee Advances Controversial Digital Sports Betting Bill in Hawaii

Despite facing significant opposition from various government agencies and several groups of native Hawaiians, a Senate committee in Hawaii has advanced a bill concerning digital sports betting. The Senate joint committee on economic development, tourism, and commerce and consumer protection unanimously moved forward with House Bill 1308 on Thursday, March 13. Although it received nine votes, four of these were cast “with reservations.”

The proposed legislation will allow four digital sports betting platforms, while retail locations will not be permitted. Notably, the bill lacks provisions for a tax rate or fees, both of which were stripped away by a House committee seeking to keep the discussion alive. After passing in the House, the bill has now also received approval from one Senate committee.

During the proceedings, committee members raised concerns about the potential financial benefits of legal sports betting in Hawaii, particularly regarding revenue generation and the risk of gambling addiction. The bill’s passage came as a surprise to many, considering the overwhelming opposition it faced. Among the opponents were several government entities and various native Hawaiian organizations. Representatives from BetMGM and DraftKings provided testimonies aimed at alleviating these concerns; however, it appeared that nearly half of the committee remained unconvinced.

Deputy Attorney General David Williams articulated the apprehensions of many opponents, stating, “We are concerned that legalized gambling will increase the risk of adverse social effects on Hawaii citizens.” He cited studies linking legalized gambling to increased credit card debt, higher instances of bankruptcies among vulnerable families, and higher rates of domestic abuse, along with negative consequences for youth. Additional testimony against the bill came from representatives of the Department of Commerce and Consumer Affairs, the Taxation Department, and other local agencies, with written opposition also submitted by the Department of Budget and Finance.

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Brandon Maka’awa’awa, vice president of the Independent & Sovereign Nation State of Hawaii, criticized the legislative process, emphasizing the lack of a completed study on the effects of legalized gambling in Hawaii. He labeled the push for the bill without such crucial information as “irresponsible policy making,” arguing that projected revenue estimates were not reliable.

In previous discussions, Jeremy Linum, director of government affairs for BetMGM, indicated that lawmakers could anticipate tax revenues of between $10 million and $20 million annually, assuming a 10% tax rate. For comparison, he pointed out that Maine, which has a population slightly larger than Hawaii’s, launched digital sports betting in November 2023 and collected $6 million in tax revenue in its first year under a comparable tax rate. West Virginia, with a population of 1.77 million, has averaged $5.8 million in annual tax revenue since legalizing wagering years ago.

As the hearing concluded, committee chair Lynn DeCoite asked Nadine Ando, director of the Department of Commerce and Consumer Affairs, for an estimated timeline for implementing legal wagering. Ando admitted she was unable to provide a clear answer, noting her agency would need to establish rules and vet applicants. She emphasized that most states with legalized gambling have a dedicated gaming commission to handle such processes. Moreover, Ando referenced previous testimony from Boyd Gaming, which indicated that similar-sized states that have approved isolated sports wagering legislation often experienced disappointing outcomes, with tax revenues frequently falling short of initial projections and proving insufficient to sustain regulatory oversight.

Following this testimony, Ando expressed her belief that legal sports betting “just doesn’t make sense.” When DeCoite called for a vote, she emphasized the importance of having an open conversation about the issue and addressing it appropriately. The committee made several administrative amendments to the legislation, including designating the specific agency that would oversee regulation. Despite expressing her concerns, Senator Donna Mercado Kim acknowledged the existence of illegal gambling in the state and successfully requested an amendment to allocate some of the proceeds toward education.