What’s Holding Up Hawaii Sports Betting?

• Hawaii House of Representative members did not agree to Senate amendments of a sports betting bill
• The online sports betting bill is now heading to a conference committee
• Tax rates, license fees may be holding up legislation

The surprising Hawaii sports betting run has hit a bit of a snag.

The Hawaii House of Representative did not concur with Senate amendments to HB 1308, a bill to legalize online sports betting, sending the legislation to a conference committee to see if Senate and House of Representatives members can find common ground to pass the measure.

The conference committee will have until May 3, sine die for the state session, to find an agreement.

Why Were Amendments Not Approved?

The Senate last week approved Rep. Daniel Holt’s bill, HB 1308, to legalize Hawaii sports betting by a 15-10 vote. Holt’s bill was the first sports betting bill to be approved by either the House or Senate.

The bill will allow at least four online sports betting licenses to be awarded to operators and provide for the legalization of daily fantasy sports competitions in the state. If approved the bill will go into effect on July 1, 2025.

Several amendments were made to the bill during its Senate journey. The amendments are as follows:

• Setting a sports betting tax rate of 10%
• Setting the sports betting license fee rate at $250,000
• Amending the regulatory body from the Department of Commerce and Consumer Affairs to the Hawaii Department of Law Enforcement

So, what exactly did the House of Representatives not agree with in terms of the Senate amendments?

License Fees, Tax Rates Likely At Heart of Disagreement

Holt’s original bill when introduced in the house include a sports betting tax rate of 10% of gross adjusted revenues and set the sports betting license fee rate at $250,000. However, these were struck from the bill and left blank as the legislation moved through the House, with representatives hoping to negotiation for higher fees and a higher tax rate.

After being approved by the House, the Senate amended the bill to include its original tax rate and license fees. This is more than likely the holdup for the bill, as House member hoped to see an increase to the tax rate and license fees.

During discussions in a House Finance Committee hearing, Rep. Sue L. Keohokapu-Lee Loy (D-2) noted the fees and tax rate were ” rather low for an industry that makes billions of dollars.”

The conference committee will have several weeks to negotiate rates that make sense for the state.

The bill has also had several opponents as it made its way through the two legislative bodies. The Department of the Attorney General submitted testimony opposing legalized online sports betting, citing concerns of rising problem gaming rates and numerous public safety and health issues.

“In addition to the direct impacts of online sports betting on household finances, multiple studies have shown a correlation between problem gambling and domestic violence, with approximately 38.1% of problem gamblers reportedly being victims of intimate partner violence, and 36.5% percent reportedly being perpetrators of intimate partner violence,” the department wrote in its testimony.