Hawaii lawmakers aim to establish state wagering operator

25 January 2019

Legislators in Hawaii have filed a bill that could see sports betting become the first legal form of gambling in the state, though without opening up the market to private operators.

House Bill 1107 proposes regulating sports betting on the basis that “tens of thousands” of Hawaii residents are already betting via illegal offshore sites.

“Moreover, tens of millions of dollars in revenues generated from online gambling are being realized by offshore operators serving Hawaii residents, but no benefits are provided to the State,” the bill explains.

“To protect Hawaii residents who gamble on the Internet, and to capture revenues generated from internet sports wagering in Hawaii, it is in the best interest of the state and its citizens to regulate this existing activity by authorising and implementing a secure, responsible, and legal system for sports wagering,” it continues.

However this would not be achieved by allowing private operators into the market. Instead, HB1107 proposes creating a state-owned entity, the Hawaii Sports Wagering Corporation, that will be permitted to offer sports betting and used to generate additional revenue for the state.

It will be established by amending the Hawaii Revised Statutes and exist as a subsidiary of the state’s Department of Business, Economic Development and Tourism for administrative purposes, and offer sports betting to those aged 18 and above.

The Corporation will be overseen by a seven-member board of directors, with three of the initial directors to serve two-year terms; two to serve for four years, and two for five. This board will be responsible for appointing a chief executive officer to lead the business.

The board will also be responsible for developing regulations for sports betting within 180 days of SB1107 passing into law, and launching a tender process to select a sports betting provider.

This provider must have experience of running regulated gaming and lottery operations in the US, experience in the digital media and entertainment space, and have proven online technology, suggesting online wagering will be permitted.

The Hawaii Sports Wagering Corporation will be exempt from tax, with all its proceeds to be deposited into the Sports Wagering Special Fund, which is also created through the legislation. Funds generated through legal sports betting will be used to modernise and upgrade Hawaii’s capital infrastructure and support maintenance projects.

The bill, which has been introduced in the Hawaii House of Representatives and passed its first reading, is yet to be assigned to a committee for further scrutiny.

Currently Hawaii is one of two US states with no legal forms of gambling, alongside Utah.