Bills seek to legalize betting on pro sports
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At least two bills have been introduced in the state Senate with the intent of cashing in by legalizing limited forms of sports wagering — which is still illegal in Hawaii, despite numerous attempts that have gone bust in recent years.
Senate Bill 373 has been referred to the Economic Development and Tourism Committee, where a favorable vote would forward the measure to a joint session of the Ways and Means and Judiciary committees.
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The legislation, introduced by Sen. Angus McKelvey (D-Maui) and co-sponsored by Sens. Joy San Buenaventura (D-Puna) and Glenn Wakai (D-Oahu), the majority floor leader, would establish an online fantasy sports contests registration and monitoring program under the Department of the Attorney General. The measure also would impose an online fantasy sports contests tax on the gross revenues of registrants.
“We’ve been such an outlier state,” McKelvey told the Tribune-Herald on Thursday. “And as I say in the preamble of the bill — and I point to that — there’s no law actually on the books against it. It’s the opinion, rather, of a former attorney general’s office.”
McKelvey was referring to a 2016 opinion issued by then-Attorney General Douglas Chin, which stated that daily fantasy sports contests, such as those run by FanDuel and DraftKings, constitute illegal gambling under existing state laws.
“Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under the person’s control,” said Chin at that time. “The technology may have changed, but the vice has not.”
“They say it’s gambling. I say it’s not,” opined McKelvey, who pointed to a 2018 study by researchers at the Massachusetts Institute of Technology, which also is included in the measure’s preamble.
“The studies that were done show that online daily fantasy — not sports book, very important, sports book is gambling — but online daily fantasy is at a same level of skill or greater than solitaire, which is in Hawaii a game of skill,” McKelvey said.
McKelvey noted that Utah is the only other state banning online daily fantasy sports contests, and that his measure, if passed, would provide Hawaii with a revenue stream already realized by 48 other states.
“I thought it was a way to bring us up to speed with all the other states of the nation, allow us to tap into unrealized tourist revenue, and provide — especially with the federal government conditioning aid now to all sorts of things — trying to create a way for extra investment or extra monies for the Lahaina rebuild which, of course, affects everybody across the state,” he said. “That was the idea. And after that was done, the fund could be used to fund other worthy programs in education and infrastructure and potential tax relief.”
McKelvey lost a home in the Lahaina wildfire of Aug. 8-11, 2023, which killed more than 100 people and devastated the historic former whaling town.
“My understanding is because of the California wildfires, Maui’s concerned they aren’t going to have the rebuilding ability for Lahaina, because they expect the price of building supplies to skyrocket,” said San Buenaventura. “I support taxing what the federal government has allowed the states to be able to do. And I generally support the idea because people are already gambling online, and I want to be able to regulate and tax it.”
The measure would legalize online daily fantasy wagering on professional sports, but not on collegiate or high school sports or sports involving animals, such as horse racing and dog racing.
“I’m trying to align this with what’s on online daily fantasy sites,” McKelvey said.
The bill, which passed first reading, does have a provision for allocating start-up funds for the registration and monitoring program, but the amount is left blank.
The other measure, Senate Bill 1572, introduced by Sen. Lynn DeCoite (D-Maui, Molokai and Lanai) and co-sponsored by Sen. Donna Mercado Kim (D-Oahu), would establish the Hawaii State Sports Wagering Commission within the Department of Business, Economic Development and Tourism. The commission would codify licensing requirements for sports wagering operators, as well as penalties for violations.
In addition, the measure would specify that sports wagering shall not be considered games of chance or gambling.
Under the bill, the commission would be allowed to conduct background checks on applicants for a sports wagering operator license and persons in control of applicants for a sports wagering operator license. It also would require tax revenue collected from sports wagering to fund certain initiatives, including 50% for public education programs and 25% for affordable housing.
In addition to “online qualified gaming entities,” the bill also would allow sports wagering “in-person at a retail sports betting location approved by the commission.”
The bill, like SB 373, would permit wagering on professional sports but prohibit bets on collegiate and high school sports, as well as sports involving animals.
The fee for an initial sports wagering operator license would be $250,000. The fee for renewal of a sports wagering operator license would be $100,000.
As of Thursday afternoon, SB1572 passed first reading but hadn’t received a committee referral.
Email John Burnett at jburnett@hawaiitribune-herald.com.