Hawaii Sports Betting Put on Hold on the Island
By
Mar 1, 2021
Lawmakers are putting Hawaii sports betting on hold after the last session. Even as some lawmakers are looking to change the gambling landscape, long-standing traditional views continue to take precedent on the island.
This year, the Aloha State introduced three sports betting bills, but nothing has gained traction. Hawaii lawmakers have also included adding a lottery on the island without sports betting involved. There are also discussions of the state potentially launching a “pilot run” for sports betting and temporarily legalizing it.
Some lawmakers looking to expand gambling on the island are throwing every idea into a bill, but talks are currently on hold. As of writing, the only gambling Hawaii allows is in work office pools. Hawaii is suffering from an estimated $1.4 billion to $1.7 billion budget deficit and could use gambling revenue to help fill the gap.
Gaming Bills Introduced
Hawaii has introduced three sports betting bills and two lottery bills this year. SB 595 would only create a sports betting committee to research the industry and propose recommendations in 2022 or 2023.
HB 850 would allow daily fantasy sports in Hawaii but would not legalize sports betting with it. The bill would legalize DFS gaming without needing to follow Hawaii gambling rules.
The most interesting betting bill is HB 736. The bill would allow mobile sports betting and would create a pilot program for the industry. Potential industry regulations would be proposed in 2022, and the pilot program would give sports betting a test run before it officially launches in the state. The Hawaii sports betting pilot program would end in 2025.
Lawmakers also introduced HB 363 and SB 561, which would add a lottery to Hawaii. Under the bill, the games allowed could be lottery, poker, and casino games. The revenue from expanded gaming would be reinvested back into education. Hawaii would also allocate funds towards problem gambling.
Ok, caught up on every bill? Great!
Hawaii Sports Betting Pilot Program
Despite a lot of opposition on all gambling bills presented, Rep. Sean Quinlan proposed a sports betting pilot program in HB 736 that would allow the state to sports wagering a test run if approved.
The Department of Business, Economic Development, and Tourism would be in charge of creating a pilot program that would temporarily launch to see how Hawaiians would act if sports betting were approved. Under the pilot program, lawmakers would experiment with gambling rules and focus on the best approach to legal sports betting and gaming on the island.
The program would allow for sportsbooks to set up mobile operations in Hawaii and would end by 2025. With multiple gambling bills coming to a halt, HB 736 was postponed for discussions later to discuss the subject further.
A lot of Opposition on Legalized Gambling
Hawaii has had a long-standing precedent of no legalized gambling on the island. When only office pool gambling like Super Bowl squares and March Madness brackets is the only gambling that is allowed on the island, then casino gaming and sports betting have a long way to get lawmakers on board.
Hawaiians have a conservative viewpoint towards gambling, and opposition stated the usual reasons why the island should avoid legalizing a sin industry. Lawmakers have expressed that legalized gambling brings more crime, high domestic violence cases, and higher gambling addiction rates.
What about the budget deficit in Hawaii? Is Covid-19 making a big enough impact on the state budget that sports betting and gambling could create another revenue stream?
The short answer is yes. Hawaii is facing a $1.4 billion budget deficit and is prepared to make drastic cuts in the coming years due to the pandemic.
In October, the Hawaii Tourism Authority stated that travel to the island was down 67.3% year to date as significantly fewer people were traveling during the pandemic. In 2019, an estimated $2.07 billion in tax dollars was spent by visitors.
Given the budget deficit, lawmakers still don’t believe sports betting, and casino gaming should be allowed on the island.
Sports Betting and Budget Deficits
Hawaii is facing a massive budget deficit thanks to the lack of tourism caused by covid-19. Lawmakers have discussed the issues that legalized gambling brings to a state, and Hawaii is trying to avoid that. However, DraftKings government affairs manager Rebecca London stated that the American Gaming Association estimates that $669 million is generated from illegal gambling on the island from 276,000 people.
Let’s take the estimated $669 million from illegal betting and bump up the estimation $750 million wagered if Hawaii had legal sports betting where more people would feel ok to use, along with tourists visiting the state trying to make bets.
Each state has a different hold, but it also assumes the hold in Hawaii is 9%. This puts revenue $67.5 million in annual revenue from sports betting. Now, let’s go a step further and say Hawaii has a high tax of 25% on sports betting due to its conservative viewpoint on the industry.
Tax 25% of $67.5 million would leave the island with an estimated $19.6 million to go towards taxes if legalized. Roughly 1.1% of the deficit Hawaii is facing.
The numbers are not going to persuade lawmakers, given Hawaii’s situation. With only 1.4 million people living on the island, lawmakers would have to look at job creation and revenue generated from tourism. The numbers alone would not sway a lawmaker over the idea of legalized gambling.
Maybe the pilot program could help change the opposition’s minds, but it could be a while for Hawaii to allow for legal gambling.