On Tuesday the senate economic development and technology committee advanced SB 1569, which would allow for statewide mobile sports betting. It is the second wagering bill to gain traction in the Hawaii legislature in a week.
On 31 January, the house economic development and technology committee moved HB 1308 forward. That bill is the house companion to SB 1569. In both chambers, the committees unanimously moved the bills, but several lawmakers did so “with reservations”. That suggests that the bills won’t have a smooth ride through the legislature.
The sports betting bills are two of at least eight gambling bills in the state legislature. Among them is a house bill that would only allow for gambling in designated tourist zones, a restriction not seen elsewhere in the US, but proposed and in practice in several Asian countries. There are also bills that would regulate and tax daily fantasy sports.
Gambling harm a top-line concern
Tuesday, the committee spent about 30 minutes discussing the bill. The key issue that rose to the top among those testifying was the harm that can come with legal gambling. Hawaii deputy assistant district attorney David Williams testified that his office opposes the SB 1569 because legal gambling “will increase the risk of adverse financial effects on Hawaii citizens”.
He went on to say that studies bear out his office’s concerns and have shown that legal gambling can lead to increased bankruptcies, as well as an increased risk of domestic abuse, particularly in the most “vulnerable economic households”.
Several other government agencies and trade organisations testified in support, saying that given the high cost of living in Hawaii, they support any new tax revenue stream.
But Senator Donna Mercado Kim questioned that logic. Witnesses said legal sports betting could net the state up to $37 million (£29.7 million/€35.7 million) in tax revenue. Kim doesn’t think that amount would help to make Hawaii more affordable.
“For me, it’s not necessarily the money, but to stop the illegal wagering, to make it safe so people know that they can do it and not have their fingers cut off if they don’t pay or whatever,” she said. “And if there is revenue from it out there, then fine. But I just don’t want people to think this is panacea. Because sports betting doesn’t generate that much revenue coming out of it.”
No tax rate stated
Operators touted the benefits of a legal market, including the ability to be able to tamp down the illegal market. DraftKings senior government affairs officer Rebecca London pointed to legal states that have had success in forcing illegal operators to exit.
The biggest operator to oppose the bill was Boyd Gaming, which operates Vacations Hawaii. That business offers vacations from Hawaii to Boyd Gaming properties in Las Vegas.
SB 1569 would limit the number of platforms available in the Hawaii to four. It would cost operators $250,000 to apply for a licence and $250,000 to annually renew a licence. No tax rate is indicated. The proposal would also allow consumers to fund accounts with credit cards. That method of payment is banned in some states, including Iowa, Massachusetts and Tennessee.
In addition, the proposal would create a problem gambling prevention and treatment fund. The state would funnel an unspecified percentage of tax revenue to the fund and allow for legislative appropriations.
The Hawaii legislative session runs until 2 May and the crossover deadline for the a bill to cross from one chamber to the other is 6 March.
