Hawaii Contemplates Legalizing Limited Online Gambling by 2024

Hawaii Surprises with Online Gambling Bill for 2024

In a surprising turn of events, Hawaii is now entering the conversation surrounding online gambling in the United States. Senator Ronald D. Kouchi has introduced bill SB3376, which proposes the implementation of a limited form of online gambling in the year 2024. The bill aims to create a single-operator market for online poker and sports betting in the state, despite Hawaii not being a typical candidate for gambling expansion.

The proposed bill outlines the establishment of the Hawaii Gaming Control Commission (HGCC), which would consist of seven part-time members appointed by the Governor. The commission would be responsible for regulating online-only gambling, with a focus on keeping Hawaii free of any regulated retail gambling. The HGCC would also be in charge of selecting a single operator for licensing, with a 10-year renewable license, prioritizing ease of regulation.

The legislation is being introduced to address the issue of tens of thousands of Hawaii residents engaging in illegal online gambling on offshore platforms. The bill argues that a regulated market would capture lost revenue and benefit the state and its citizens, especially in the wake of the 2023 wildfires, as Hawaii continues to recover from the disaster.

If passed, the selected licensee would be able to offer sports betting and online poker, but not casino games. The financial terms of the bill involve a unique profit split, starting at 70% for the state and 30% for the operator in the first year. This ratio would gradually shift in favor of the operator by 5% each successive year, reaching a minimum of 5%.

While the bill presents a unique approach to online gambling, it faces several immediate issues. The state’s small population size and the niche nature of poker could make it less attractive to operators. Additionally, the bill does not address negotiations for interstate compacts, leaving questions about sustaining online poker traffic.

The timing of the legislation is also ambitious, aiming for it to be effective on July 1, 2024. This timeframe would give the HGCC 120 days to accept applications and an additional 90 days to select a winning candidate, setting a probable market launch in the first half of 2025.

The fate of the bill remains uncertain, as the House sports betting bill, HB 2765, does not yet have a hearing date. However, this move by Hawaii reflects a trend of states exploring online gambling as a source of revenue and regulatory control. Industry experts are closely watching to see how Hawaii’s unique approach will fare in the legislative process.