Hawaii’s push to legalize online sports betting is gaining momentum as HB 1308 advances to the House floor following approval from the Finance Committee. However, the proposal has not secured unanimous support, with some lawmakers voicing concerns over regulation, tax rates, and potential social risks.
On February 24, the House Finance Committee approved HB 1308 with a 12-3 vote, although six members who supported it did so “with reservations.” Prior to the vote, Committee Chair Kyle Yamashita introduced amendments to make the bill more palatable, including removing the proposed 10% tax rate and $250,000 licensing fee for further review. Yamashita emphasized that discussions on sports betting regulation should continue, calling the bill “a work in progress.”
Meanwhile, a companion bill, SB 1569, is scheduled for a Senate Ways and Means Committee hearing on Wednesday, marking another critical step in Hawaii’s legislative process.
Amendments to Licensing and Tax Structure
One of the major debates surrounding HB 1308 has been the financial framework for taxation and licensing. Some lawmakers expressed concerns that the originally proposed $250,000 licensing fee for a five-year period was too low, given the multi-billion-dollar sports betting industry.
Rep. Sue L Keohokapu-Lee Loy stated,
“I would love to see that license fee go up exponentially.”
Nadine Ando, Director of the Department of Commerce and Consumer Affairs, also questioned whether the proposed structure would generate enough funds to regulate the industry effectively. With only four licenses available, the state would collect just $200,000 annually in fees, an amount Ando described as insufficient to oversee the industry properly.
With these concerns in mind, lawmakers removed the tax rate and licensing fee from the bill, allowing for further revisions before finalization.
Rep. Daniel Holt, the bill’s sponsor, supported the amendments, stating:
“I personally don’t think we’re going to be creating a bunch of new gamblers. We’re just going to be collecting the tax revenue from those who already choose to participate in this form of entertainment. The fee’s got to go up, tax has got to go up.”
Support and Opposition Perspectives
As in previous committee hearings, unions and sportsbooks expressed strong support for the bill, citing economic benefits and the potential to regulate an already-existing offshore market. Representatives from BetMGM, DraftKings, and the Sports Betting Alliance (SBA) backed the proposal, arguing that legalizing sports betting would increase tax revenue and provide law enforcement with tools to combat illegal gambling.
The SBA, which includes BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel, projected that Hawaii’s annual tax revenue could range between $10-$20 million based on a 10% tax rate. In comparison:
- Maine (pop. 1.4M): Launched legal sports betting in November 2023, recording a $550 million handle in its first year and $6 million in tax revenue (at a 10% tax rate).
- West Virginia (pop. 1.77M): Has generated $2.8 billion in bets and $25.9 million in tax revenue since launching digital sports betting in 2019.
Proponents also highlighted the economic ripple effects beyond direct tax revenue. BetMGM’s Director of Government Affairs, Jeremy Limun, pointed to increased foot traffic at bars, restaurants, and other hospitality venues, linking online sports betting with broader economic benefits.
However, opponents—including state officials and problem gambling advocacy groups—warned of potential social consequences, such as:
- An increase in problem gambling and addiction-related bankruptcies
- Financial hardship for vulnerable residents
- Potential links between gambling and crime
The bill includes provisions to allocate funds for problem gambling prevention and treatment, but concerns remain over the long-term impact on Hawaii’s residents.
What’s Next for the Bill?
With HB 1308 advancing to the full House chamber, the next step will be a floor vote, though a date has not yet been scheduled. Meanwhile, the Senate version (SB 1569) is set for committee discussion on Wednesday, with its progress closely watched.
The Hawaii legislative session runs until May 2, 2025, with a key March 6 deadline for bills to pass from one chamber to the other. Whether lawmakers will reach a consensus on taxation, licensing fees, and regulatory oversight remains a central issue in the weeks ahead.
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