House Bill 1308 (HB 1308), a bill to legalize online sports betting in Hawaii, continues to advance in the face of staunch opposition. Last week, the bill sliced through its first consideration by the Hawaii Senate Joint Committee on Economic Development, Tourism, Commerce, and Consumer Protection.
The committee passed the bill unanimously, although almost half its members had expressed concerns about its provisions. The bill has already passed the state House of Representatives and is moving through further legislative stages.
Unlike other bills on gambling in Hawaii, which have largely failed to gain traction, HB 1308 has received enough support to remain in contention. It would permit a maximum of four online venues to be licensed in Hawaii but does not legalize in-person betting. This is intended to maintain sports betting as a regulated endeavor in the online environment.
However, the lack of specific information on tax rates and licensing charges has raised eyebrows, as those features were removed prior to House committee consideration to keep the bill moving without any further hindrances.
The bill's proponents argue that making online sports betting legal and regulated would help to capture existing revenue lost to offshore and unregulated gambling networks. Supporters see that with a regulated system, the state can gain tax revenues from sports betting while providing consumer protections from dishonest or predatory sports book operators.
Executives from companies such as BetMGM and DraftKings testified in favor of the bill, providing potential revenue estimates for Hawaii. The state would generate $10 million to $20 million annually if a 10% tax rate were used, BetMGM director of government affairs Jeremy Linum testified.
Opponents attack the bill from all sides
Despite this hope, the bill has been met with strong resistance from various camps. The office of the Hawaii Attorney General, the Department of Commerce and Consumer Affairs, and the Department of Taxation all opposed the bill on the social and economic consequences of legalized sports betting.
Native Hawaiian communities have also raised sharp opposition to the bill. Brandon Maka'awa'awa, Independent & Sovereign Nation State of Hawaii vice president, pointed out that a report on the possible effects of sports betting in Hawaii is still being conducted.
He complained about the haste to approve the bill before the study was done, arguing that moving without proper data is a careless approach to policymaking. He also doubts whether the economic benefits that supporters of the bill see coming would occur as imagined since the actual fiscal impact remains uncertain.
Among the core concerns articulated at committee hearings was whether sports betting revenue would prove large enough to counteract the potential evils associated with expanded access to gambling.
Even as supporters of the bill anticipate a regulated market yielding economic payoffs and consumer protection, others predict the financial and societal drawbacks will outweigh any expected gains.
According to some who oppose the bill, the absence of a fixed tax rate or licensing fee system makes it even more flawed. Without revenue collection and expenditure provisions, it is not certain whether the proposal would be economically feasible.
