A proposal to legalize sports betting in Hawaii remains alive, despite mixed opinions among lawmakers and citizens.
The Hawaii Senate committees on Commerce and Consumer Protection and on Economic Development and Tourism recommended on Thursday the passage of House Bill 1308, which would establish regulations for betting on sports and specify that “legal sports wagering and fantasy sports contests” would not be considered gambling.
The measure is the latest of years of repeated attempts to legalize some form of betting in the state, and is the only gambling-related bill to remain active in this year’s legislative session.
HB 1308 received positive and negative testimony in nearly equal measure Thursday. Proponents argued that legalized sports wagering could contribute a new revenue stream to the state’s economy to help stabilize the rising cost of living.
“We need to bring new money into the state,” said Cliff Laboy of the Hawaii Iron Workers Stabilization Fund. “Unless you guys can tell us what you guys got planned to generate new money in the state, this is the only vehicle that we see that we should jump on right away. … If you guys want to kill this bill, show us what you guys got planned.”
Rebecca London, senior government affairs manager for online sports betting company DraftKings, submitted written testimony arguing that illegal sports wagering is already taking place in Hawaii, to the tune of hundreds of millions of dollars in wagers each year.
“To create an effective legal market, legal operators must be able to compete with pricing from illegal, offshore sportsbooks that do not face the same taxation and regulatory costs,” London wrote, estimating that a regulated sports betting market could generate tens of millions in state revenue annually.
But some opponents questioned those estimates. Brandon Maka‘awa‘awa, vice president of cultural advocacy group the Independent Sovereign Nation State of Hawaii, said promises of millions in state revenues are not borne out in other states that have already legalized sports betting.
“West Virginia, despite legalizing sports betting in 2019, has only generated just $20 million in tax revenue, and it began over five years ago at the same 10% tax rate that is being contemplated (here),” Maka‘awa‘awa said. “Gaming tax revenue is consistently lower than promised, while the cost remains high.”
Maka‘awa‘awa added that the cost of regulation, oversight and enforcement of gaming regulations is consistently high elsewhere and could further cut into revenue expectations.
Several testifiers pointed out that a state working group is currently studying the potential economic impacts of legalized sports betting, and that passing a bill before the results of that study are released is irresponsible policymaking.
Others were critical of the legitimization of a pastime that can become addictive and financially ruinous.
“My husband had an addiction to gambling, and I lived through his struggle and all his pain,” said Doreen Morimoto. “After losing all our assets … he had to work three jobs just to get us out of debt, and his health was compromised. I have heard countless stories about how gambling destroys lives and tears apart families. The house never loses.”
Several state and county agencies also opposed the measure. The Department of the Attorney General noted that legalized gambling leads to adverse societal impacts, including increased crime, as did the Honolulu prosecuting attorney and Honolulu Police Department.
Nadine Ando, director of the state Department of Commerce and Consumer Affairs, also testified against the measure, but mostly because HB 1308 would put the DCCA in charge of the sports betting regulations, something she thought her department is ill-suited for.
Ultimately, both committees jointly moved to recommend passage of the bill. Several senators on those committees pointed out that legalizing sports betting isn’t “starting from zero,” and that gambling is already rampant throughout the state.
“I play games on my phone, and it always pops up that I can play bingo and win money, or I can play solitaire and win money,” said Honolulu Sen. Donna Mercado Kim. “It’s already there. I’m sure a lot of people are doing it already, it’s so easy.”
Maui Sen. Lynn DeCoite said the state needs to address concerns about gambling head-on by introducing regulations to control it.
Both committees recommended amendments to the bill that would put the Department of Business, Economic Development and Tourism in charge of the regulations instead of DCCA.
The bill remains referred to one more Senate committee, the Committee on Ways and Means. No hearing has yet been scheduled.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
