In a significant development for the US gambling landscape, a bill to legalize online sports betting in Hawaii has advanced, clearing a legislative committee with unanimous support. HB 1308, which also seeks to clarify the legal status of Daily Fantasy Sports (DFS), now moves forward for further consideration. The proposed legislation would establish a 10% tax rate on online sports betting operators.
The move signifies a potential shift for Hawaii, a state historically resistant to gambling expansion. While the bill faces further hurdles before becoming law, its successful committee passage signals growing momentum for regulated sports wagering. Crucially, the bill specifically states that DFS contests are not considered games of chance or gambling, effectively legalizing them within the state.
Supporting the bill is MGM Resorts International, which submitted a letter emphasizing the « rapid proliferation » of illegal online sweepstakes casinos and social sportsbooks operating within Hawaii. MGM argues that a regulated sports betting framework is essential to protect consumers and generate much-needed tax revenue for the state. This echoes a common argument in favor of regulated gambling: that it channels revenue away from the black market and into state coffers.
Conversely, Boyd Gaming expressed opposition to the bill, arguing that similar-sized markets have often seen disappointing returns from legalized online sports betting. Boyd contends that tax revenues frequently fall short of projections, leaving insufficient funds to support robust regulatory oversight and responsible gaming infrastructure. This raises a critical point about the delicate balance between revenue generation and responsible gambling practices, a concern that lawmakers must address.
Opportunity Knocks for Online Sports Betting Industry
The potential legalization of online sports betting in Hawaii presents a significant opportunity for the burgeoning online sports betting industry. While the market size may be smaller compared to larger states, it represents a new frontier with untapped potential. The 10% tax rate, while not the lowest in the US, is still competitive and could attract major operators.
The inclusion of DFS legalization within the bill is another positive sign for the industry. Clarifying the legal status of DFS removes any ambiguity and paves the way for these platforms to operate openly in Hawaii. This could further boost overall revenue and engagement with online gaming.
However, the concerns raised by Boyd Gaming cannot be ignored. Successfully implementing a regulated framework requires careful consideration of responsible gambling measures and adequate funding for regulatory bodies. The industry must demonstrate its commitment to responsible gaming and work collaboratively with lawmakers to ensure a sustainable and ethical market. If Hawaii legalizes online sports betting, it will be crucial to monitor its performance closely, particularly concerning revenue generation and the effectiveness of responsible gaming programs. The state’s experience could provide valuable insights for other states considering similar legislation.
