Although House lawmakers passed a resolution to study legalizing gambling in Hawaiʻi, another measure that legalizes sports betting is still being considered.
“There's always more than one bill or idea moving at any given time in the Legislature. We never know how timing works out,” said Rep. Daniel Holt, who introduced the sports betting measure.
“Excited in a positive way, but I mean just because the working group is moving doesn't mean that we can't move the bill as well.”
The bill would legalize online sports betting and tax it at a 10% rate. Holt explained that people are already gambling illegally, and this would generate revenue and give the state the ability to regulate it.
“It's about revenue for the state. We need to always be creative to find ideas to fund our core services of education, health care, and public safety, so there is a return to the state with something like this going into place.”
However, Stop Predatory Gambling National Director Les Bernal warned against legalizing any form of gambling in Hawaiʻi, including sports betting.
Hawaiʻi is one of 12 states that has not yet legalized sports betting. Bernal emphasized that that's for the best.
“Yes, illegal gambling has existed, but it exists on the fringe of Hawaiʻi society. By bringing in online gambling, you're not just going to stop with sports,” he said.
“What these companies really are, are online casino companies. States like Michigan, 90% of the gambling revenue comes in from the online casino portion of the business. So this is a vote literally just to blow the door off of Hawaiʻi and bring in all these extreme forms of gambling that have failed in other states.”
He pointed to a study that showed that the states with legalized sports gambling have seen a deterioration in financial health among consumers.
Bernal explained that social forms of sports betting are already legal in Hawaiʻi, like gathering with friends and family to put money into a pot for fantasy football or college March Madness basketball brackets.
“ The group of us here, we can already place a bet with one another. What's illegal is you can't run a sports book. You can't run your own lottery,” he said. “You can't be in a business because when you run it as a business, there's an adversarial relationship between the gambling operator and its customer.”
He shared a Wall Street Journal article that reported that 0.5% of the customer base of PointsBet, a Canadian sports betting site, generated more than 70% of the company’s revenue in 2020.
Bernal added that young men are more likely to be impacted by a gambling addiction.
“ These online gambling operators, they're specifically marketing to men right now. The way they market this on the continent is: you're not a sports fan anymore unless you're betting on the games,” he said. “ So there's an incredible amount of peer pressure.”
The state Department of Taxation did not submit numbers in its testimony on how much revenue the state could bring in from sports betting. However, the Sports Betting Alliance estimated that Hawaiʻi residents are already wagering about $300 million a year.
“This money is being wagered with offshore websites and illegal bookies with no oversight, consumer protections, or revenue generated for the state,” wrote Sports Betting Alliance representative Kathleen Owen in her testimony on the measure. “The illegal and unregulated market continues to grow around the country in states without a legal alternative, and Hawaiʻi is no exception.”
In an interview with Hawaii News Now, Gov. Josh Green said he would not veto the measure if it makes it to his desk.
However, former Govs. David Ige and Linda Lingle wrote a joint piece this weekend in the Honolulu Star-Advertiser against legalizing gambling. Honolulu Prosecutor Steve Alm and the state Department of Attorney General also submitted testimony opposing the measure, both citing health and safety issues.
The bill is scheduled for conference committee on Friday afternoon. If it passes, it will go to a final floor vote in both chambers.
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