Hawaii Senator introduces new online sports betting and poker bill

Hawaii Sports Betting Bill
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A Hawaii lawmaker is looking to make the state a destination for sports betting and poker.

Sen. Ronald D. Kouchi has introduced Senate Bill 3376 — a proposed piece of legislation that would establish a Hawaii Gaming Control Commission and authorize online poker and sports betting in the Aloha State. SB 3376, which passed its first reading last week, takes a different approach from previous proposed sports betting and poker bills in Hawaii as it allocates tax revenue generated from wagering toward a wildfire relief fund. The revenue would help alleviate the estimated $6 billion in economic losses from wildfires in Hawaii last year.

In addition to providing relief for victims of wildfires, SB 3376 is also designed to curtail illegal gambling. The state legislature projects that tens of thousands of Hawaii residents illegally gamble preventing the state from driving profits from regulated wagering.

Regulated sports betting in Hawaii is projected to generate $6.8 million in annual tax revenue, according to the Sports Betting Alliance. SB 3376 would tax revenue from gross receipts at a 70% rate for the first year of wagering. The rate would then decrease by 5% each year.

SB 3376, which has no mention of retail sports betting, would only allow one operator to gain market access in Hawaii after completing an arduous application process.

The process requires a prospective operator to apply for a wagering license within 60 days of the application window being opened. In the application, the operator must include a development plan, which will need to estimate its potential number of employees, economic benefit to the community, projected gross receipts, and a training plan for those who are employed by the operator.

An application will also come at a price.

Each applicant would need to pay a $50,000 fee, which would cover the costs of a background investigation by Hawaii’s gaming commission. If costs of the probe exceed $50,000, the applicant must pay the additional amount while a refund would be issued if costs are below that threshold. A $200,000 bond must also be filed by the applicant before a license is awarded. The bond ensures payments and conformity to the commission.

A license would have a 10-year term, which could be renewed for another 10 years.

An operator that is awarded a license under SB 3376 must also adhere to certain wagering rules, which include bettors and employees being 21 or older and a maximum wager of $1,500 per event. SB 3376 also proposes a compulsive gambler assistance program for Hawaii residents.

Online sports betting and poker in Hawaii face an uphill battle following past proposed bills not gaining traction. In 2023, House Bill 344 failed in the House. The bill proposed to regulate online sports betting through Hawaii’s Department of Business, Economic Development, and Tourism.