House-Approved Hawaii Online Sports Betting Bill Heading to Senate Floor

• A House-approved online sports betting bill today was approved by the Senate Ways and Means Committee
• The committee approved the bill by an 11-2 vote
• The bill now heads to the Senate floor for a potential vote

Hawaii sports betting hopes took a huge step this afternoon.

The powerful Hawaii Senate Ways and Means Committee today approved HB 1308, a house-approved bill to legalize online sports betting, by an 11-2 vote. The bill now moves forward to the full Senate floor for a potential discussion and vote.

In addition to the committee approval, the legislation was amended to finally include an online sports betting tax rate and license fee.

Tax Rate, License Fee Finally Revealed

The committee discussion finally gave us insight into how Hawaii will tax and charge online sports betting operators for their inclusion in the Aloha State’s sports betting market.

Senate Ways and Means Committee Chair Sen. Donovan M. Dela Cruz (R-17) revealed today the state will set its online sports betting tax rate at 10% of adjusted gross sports betting revenues. Approved operators will have to pay a license fee of $250,000, with renewal fees also coming in at $250,000.

These were the original tax rates and license fees Rep. Daniel Holt (D-28) included in his bill. They could eventually be amended and increased before a full Senate vote, as several lawmakers throughout early bill discussions believed they were too low.

Holt’s bill calls for at least four online sports betting licenses to be awarded to operators in the state. It originally called for the Department of Commerce and Consumer Affairs to regulate Hawaii sports betting, but Director Nadine Ando expressed doubt that her department could do so during an earlier Senate committee meeting.

The Hawaii Department of Law Enforcement will regulate the new form of gaming if ultimately approved. Additionally, the enforcement of the general excise tax on sports betting will be administered by the Hawaii Department of Taxation.

Passed With Reservations

The bill was passed by an 11-2 vote; however, four committee members voted in favor of the legislation “with reservations.”

“I do appreciate your amendments, but I do have some concerns as it goes forward,” Sen. Brandon J.C. Elefante (D-16) noted during the hearing.

Senate Ways and Committee Vice Chair Sen. Sharon Y. Moriwaki (D-12) voted against the legislation. The problems legalized online sports betting would bring to Hawaii would not outweigh the positives.

“It has a lot of social and enforcement regulatory costs that may far outweigh the revenues that would be generated. So, I too will vote no,” she said.

Sen. Lorraine R. Inouye (D-1) joined Moriwaki in voting against the legislation. Inouye said she’s had a number of constituents voice their opinions against the bill, fearful that legalized online sports betting would increase problem gaming rates in the state.

“I just believe we’re sending the wrong message with this,” she said.