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State of Play
- Two Hawaii House bills would legalize and tightly regulate sports betting while expanding the state’s definition of gambling, drawing a near-even split between industry supporters and anti-gambling advocates.
- The measures would create a licensed market with heavy fees and a 15% tax rate while also targeting prediction markets and other speculative platforms.
The Hawaii State House is advancing two related measures aimed at closing legal gaps that have allowed unregulated betting.
House Bill 2570 would add a new chapter for sports betting, requiring licensed operators to pay a $500,000 initial fee and a $500,000 renewal fee every five years, and imposing a 15% tax on gross wagering receipts.
Supporters, including the Sports Betting Alliance, say an estimated $680 million was wagered illegally by Hawaii residents in 2025 and that legalization would redirect those bets into the regulated market.
Opponents – led by Honolulu Prosecuting Attorney Steve Alm – cited a 2024 University of California San Diego study and warned legalization tends to increase irresponsible gambling among lower-income players.
Separately, House Bill 2198 would broaden Hawaii’s legal definition of “gambling” to explicitly include sports betting, prediction markets, and other speculative financial bets; lawmakers highlighted ethical concerns about markets that allow wagers on politics, disasters, or mass-casualty events.
State estimates $102M annually in tax revenue
The bills would create a legal on‑shore option where many currently use out‑of‑state or offshore platforms.
Operators willing to enter Hawaii would face substantial entry costs – a $500,000 license plus five‑year renewal fees and a 15% tax on gross receipts – which will likely favor larger, established sportsbooks over small startups. That tax and fee structure could generate significant state revenue if illegal activity is funneled into licensed operators (the bill’s math projects roughly $102 million a year based on 2025 wager estimates).
For consumers, legalization promises stronger consumer protections, geolocation‑based access, and dispute resolution; however, critics warn increased availability and marketing may exacerbate problem gambling among lower‑income players. The bills also signal regulatory scrutiny of prediction markets, which could curtail platforms offering bets on political or real‑world events and limit new product offerings in the state.
Both bills have passed second reading in the House but await final committee scheduling.
Based on reporting by Michael Brestovansky for Aloha State Daily.
