Sports betting came closer to fruition this session than many believed it would, but ultimately, a disagreement between the House and Senate led to the demise of House Bill 1308.
Unable to Agree
It has been a whirlwind journey for Representative Daniel Holt’s HB 1308, a measure that would have brought mobile sports betting to the Aloha State. The bill advanced out of the House and then the Senate with amendments. A conference committee was convened between members of both chambers to iron out the wrinkles, but a compromise could not be reached.
The bill was introduced by Representative Holt in January, and along the way, the legislation either seemed like a surefire lock or an absolute impossibility. But at the very end, the amendments the Senate made became the bone of contention that eventually doomed the bill.
“We just haven’t come to an agreement on the details, with number of operators, tax rate, fees, and those kinds of things,” Holt said.
Key Conditions in Place
The bill had several iterations due to amendments, but the latest was a 10% fee on sportsbooks’ revenues, a $250,000 licensing fee covering five years, and allowing at least four online sportsbooks to operate in Hawaii, in addition to authorizing daily fantasy sports.
However, even the gaming industry mouthpiece, the Sports Betting Alliance (SBA), which represents four of the major online gaming operators, including BetMGM, DraftKings, Fanatics and FanDuel, conceded that licensing fees should be increased from the proposed $250,000 to $500,000.
“With this entire sum paid in year one to cover the five-year period, we believe that this sum will cover the regulatory costs,” said Kathleen Owen, an attorney with an outside law firm representing the SBA, who testified before the Senate Ways and Means Committee last month.
Owen also argued that, “A regulated, competitive mobile sports betting market would replace the predatory, illegal platforms already operating in Hawaii and generate new revenue for the state through a policy that has the support of constituents.”
Critics Get Last Laugh
The primary objection to mobile sports betting is the potential for a dramatic increase in problem gambling issues. Public mental health services need to be available to combat the problem, and included in virtually every mobile sports betting or iGaming bill, there is a provision to earmark funds towards those programs.
Those fears were raised many times throughout the session, but others also expressed that having any form of gambling on the island would clash with the culture. Hawaii is one of only two non-gaming states without a state lottery, but sports betting was expected to generate $10 million and $20 million per year.
The Senate Ways and Means Committee Chair, Senator Donovan Dela Cruz, was a powerful critic of sports betting, stating, “With so many issues facing our state, such as lack of affordable housing, homelessness, drug, and alcohol addiction, we should be focused on addressing these real issues that impact our residents instead of bringing in legalized sports wagering and gambling that will exacerbate the problems already facing our community. Is the increase in tax revenue worth the negative impact on the lives of Hawaii residents?” Cruz asked.
