A bill to legalize online sports betting in Hawaii has reached the full House after hearings in multiple committees, but it has far from unanimous support.
HB1308 was approved by the House Finance Committee 12-3 on Monday, having previously been greenlit in the Economic Development and Technology Committee and the Judiciary and Hawaiian Affairs Committee. It will now head to the full chamber floor.
Chair Kyle Yamashita called the proposal “a work in progress” after half of the 12 members who voted yes did so with reservations.
“I know there are concerns from many of the members…” he added. “The setting up of the regulatory process will obviously take some work. But every once in a while we do bring up gambling … I don’t think it’s a bad thing to talk about it every so often. I want to keep this thing moving.”
Licensing fee and tax rate suggestions scrubbed
The pattern of testimony largely followed that of previous hearings: unions and sportsbooks expressed support, but several governmental department representatives and problem gambling groups voiced opposition.
Ultimately, multiple key amendments were made before the bill was moved out of the Finance Committee.
Concerns were expressed that both the licensing fee (proposed at $250,000 for five years) and the tax rate (suggested at 10%) are considerably too low.
Nadine Ando, director of the Department of Commerce and Consumer Affairs, noted that five-year licenses for four operators, as called for in the bill, would raise just $200,000 per year in licensing fees. “That is not enough to do anything to regulate this industry,” she told the committee.
Prior to the commitee vote, Yamashita said the bill would be amended to blank out those numbers so that both key financials could be adjusted down the line. Those amendments had the support of the bill’s sponsor Rep. Daniel Holt.
“I personally don’t think we’re going to be creating a bunch of new gamblers,” said Holt. “We’re just going to be collecting the tax revenue from those who already choose to participate in this form of entertainment. I do agree with all the amendments being made. The fee’s got to go up, tax has got to go up.”
A boost to hospitality businesses?
As in other committees, members of the sportsbook-led Sports Betting Alliance laid out their arguments in favor, again emphasizing the benefits of curbing the offshore market and bringing revenues and consumer protection under state control, emphasizing the need to curb the black market and bring back customers via regulated options.
MGM Resorts International Director of Government Affairs Jeremy Limun also argued that the “net-positive” economic impact would extend beyond tax revenues and job creation into brick-and-mortar food service and hospitality.
“From our experience at BetMGM, we have seen that online sports betting really has been a significant foot traffic driver to a lot of retail locations. And not just retail sportsbooks but bars, taverns, restaurants, all of these locations that could broadcast sporting events.”
A date for the bill to be heard by the full House chamber has not yet been set. A Senate companion bill, SB 1569, is due to be read in committee on Wednesday.
