Hawaii Proposes Bill to Legalize Online Sports Betting
Introducing House Bill No. 1815
Hawaii is one of just two states in the United States that prohibits all forms of sports betting both in person and online – but a recent proposal by Rep. John Mizuno suggests that may be changing.
The proposal was first submitted in late January by Mizuno as House Bill No. 1815. According to the bill, “the purpose of this Act is to create a body politic, known as the online sports wagering corporation, authorized to offer a regulated, secure, and responsible framework for the conduct of sports wagering in Hawaii that will provide consumer protections and capture additional revenues for the benefit of the State.”
The practicing sportsbooks would be subject to a country-high 55% tax rate, surpassing New York’s tax rate record of 51%. For context, Nevada’s tax rate on sportsbooks in their state is just 6.5%. Operators in Hawaii will also be required to pay licensing fees, though the specific amount for those fees have not yet been decided.
This 55% tax rate does present the state with possible opposition from sportsbook operators who don’t want to or simply can’t afford to pay that high of a tax. Considering Hawaii is so isolated from any neighboring states and thereby neighboring tourists, it doesn’t give operators much incentive to join Hawaii’s movement especially in a state that is so historically opposed to the activity. However, some operators may see this is a lucrative business opportunity to gain access to an exclusive market – only time will tell.
This proposal comes just behind New York’s successful launch of their online sports betting market that has accumulated over $2 billion in bets wagered in their first 30 days and over $70 million in tax revenue for New York. Mizuno admitted his proposal was inspired by New York’s successful launch and the estimated participation of illegal online sports gambling in the state.
“Tens of millions of dollars in revenues generated from online gambling are being realized by offshore operators serving Hawaii residents, but no benefits are provided to the State,” the legislation wrote. In essence, if the state legalizes these activities, then they could reap the monetary rewards associated with them.
There is also a section of the legislation that subjects all operators in the state to acknowledgements of gambling addiction, which is a widespread concern of many opponents to the sports betting legalization era that we have found ourselves in.
“The corporation shall provide information on problem gambling, including a problem gambling hotline telephone number…The corporation shall offer responsible gambling services, such as self-exclusion, limits on losses, amounts wagered, and playing time, and other services as the corporation reasonably may determine are necessary and appropriate to reduce and prevent problem gambling.”
As of now, there is no mention of legalizing in-person sports betting at casinos or racetracks and both are currently illegal on all Hawaiian islands. If Hawaii legalizes online sports betting, it will join roughly 21 other U.S. states in doing so and leave Utah as the only state left with zero gambling permissions.