A state that’s long opposed legal sports betting is now going after prediction markets.
Key Takeaways
- HB 2198 would make prediction markets that offer contracts on real-world events illegal in Hawaii.
- Hawaii is one of two U.S. states that have no legalized gaming.
- Sports betting bill attempts have had a hard time passing in the Aloha State.
Hawaii lawmakers introduced House Bill 2198 on Monday, legislation that would define trading platforms that offer contracts on sports and several other categories as illegal gambling. The bill would ban the “purchase, sale, or financial speculation of securities or commodities on the outcome or future contingent events related to sports, contests, people, politics, catastrophe, and death.”
The legislation is backed by more than a dozen Democrats from the state’s House of Representatives, and would go into effect on July 1.
Hawaii and Utah are the only two U.S. states that have no form of legalized gaming, including lotteries.
Enjoying Covers content? Add us as a preferred source on your Google account
Going after real-world events
While there have been several attempts to alter gaming options, including current ones, Hawaii has strict gambling laws that prevent casinos and sports betting operators from offering wagering there.
HB 2198 specifically targets trading exchanges that offer real-world event contracts, such as the Super Bowl winner or a political race, not business deals that include commodities and securities.
The Commodity Futures Trading Commission regulates prediction markets like Kalshi and Polymarket, which argue that they don’t abide by state laws. Hawaii’s bill would still make them illegal and subject to punishment.
That’s the issue Kalshi has faced in several states with legalized sports betting, like Nevada and New Jersey. The prediction platform has filed lawsuits against some state regulators, and Massachusetts, through the state court, is attempting to force Kalshi to be licensed to operate in the Bay State.
State of markets
If the Aloha State bans prediction markets by this summer, Kalshi could use similar legal tactics to try to remain operational there. Without legal sports betting in Hawaii, residents can currently purchase sports event contracts on Super Bowl LX markets like the spread or total between the Seahawks and Patriots.
It’s unknown what chance this legislation faces, but Hawaii’s lawmakers have thwarted sports betting plans for multiple years. A bill to legalize sports wagering nearly got through last year but ultimately failed due to disagreements over tax rates and licensing fees, as well as regulation issues and gambling opposition.
Major sportsbooks FanDuel and DraftKings have expressed interest in continuing lobbying efforts to bring sports wagering to the Aloha State. Both launched prediction market platforms in late 2025 and are currently offering sports event contracts in Hawaii.
