Hawaii Sports Betting Clears Major Hurdle

Hawaii sports betting just moved one step closer toward legalization.

House Bill 2570 (HB 2570) seeks to green light online sports betting in The Aloha State. Like past measures, it is being met with plenty of opposition. To that end, its passage into law is not guaranteed. However, the bill made it through the Hawaii House Economic Development and Technology Committee, winning approval with a 5-3 vote.

Granted this is nothing new for The Aloha State. Talks to legalize sports betting in Hawaii have progressed on more than a half-dozen official occasions ever since the Supreme Court of the United States overturned the Professional and Amateur Sports Protection Act back in 2018. Regular dialogue is a clear sign of interest. Much like other states, though, the repeated failures to get anything over the hump—or even close to it—has people treating the latest push with a degree of skepticism.

Yet, at least one new force driving the proposal differs from years past. And it might just create the urgency necessary for Hawaii sports betting to get the stamp of approval many consider inevitable.

Full Details of the Newest Hawaii Sports Betting Bill are Officially Revealed

Although HB 2570 is similar to previous initiatives, it introduces a couple of key differences. Here is Pat Evans from iGaming with a nice overview of what the proposal entails, and other steps it must still clear:

“The bill would allow for at least six online sportsbooks in Hawaii with a tax rate of 15 percent. The bill’s listed effective date of ‘1 July 3000’ is meant to allow for further discussion…Rep Daniel Holt authored last year’s bill and initially included a 10 percent tax and $250,000 licence fee. House lawmakers stripped those details before sending it to the Senate for further consideration. Senate lawmakers added those figures back prior to its passage. The conference committee could not agree on a final version of the sports betting legislation.

“[HB 2570] still has two more House committee stops before it reaches the chamber floor for a potential vote that could lead to Senate consideration. There is also an ongoing study committee for gambling opportunities in Hawaii that will conclude later this year.”

Increasing the proposed tax rate by 50 percent (from 10 to 15) may sway select people still on the face. But the included “effective date” is what may be most telltale.

Listing a date that’s nearly one millennium away is quite comical on the surface. It also speaks to a lack of conviction in HB 2570’s chances. Sponsors clearly doubt whether it will drum up enough support in the House and, more specifically, Senate. Otherwise, they would not feel the need to preserve its contents and structure for future debates. We aren’t just talking about the near future, either. The expiration date, for want of better phrasing, is so far out it suggests Hawaii sports betting supporters believe this could be a long battle.

Opposition to Sports Betting in The Aloha State Remains Strong

Preparing for further, off-in-the-distance conversations makes sense when you consider Hawaii’s track record on the matter. Plenty of high-profile officials subscribe to the benefits of online sports betting legalization. That includes Governor Josh Green, who previously said he would have signed last year’s Hawaii sports betting bill into law had it passed.

Still, other key figures are not on board. The Attorney General’s office, Honolulu police and the Department of Commerce and Consumer Affairs are all strongly against HB 2570, as Evans notes in his article.

This creates obvious challenges when it comes to drumming up new support. Few states that have legalized sports betting in the past have done so despite this much division. Of course, one of those examples is also recent. The recently launched Missouri sports betting market exists only following a slim margin of voter approval.

That is not to say this bodes well for the chances of Hawaii sports betting in 2026. Fringe cases are not historically successful. That is why The Aloha State remains one of the few holds out from the industry at all.

Hawaii Could Face More Urgency to Push HB 2570 Through

With all of this in mind, there is a factor not yet being considered: the rise of prediction markets.

These operations allow customers to make “trades” on sports outcomes that don’t fall under the gambling umbrella. They are, in essence, a sports betting alternative. And because they fall under the Federal Trade Commission’s purview, companies do not need state approval to enter their markets.

A handful of states are already fighting this interpretation. It remains unclear whether any of them will be successful. Under the current presidential regime, prediction markets are effectively legal across all 50 states. And yes, they are already operational in Hawaii.

This provides a unique boost in urgency for a variety of reasons. First off, the legalization of sports betting brings the industry under state regulation. It will not shudder prediction markets or offshore betting sites, but it offers a legal alternative more people are familiar with and, as of now, more inclined to use.

We should place special emphasis on “as of now.” That’s the other source of urgency. If prediction markets predate Hawaii sports betting for a long enough stretch, there may be no rivaling them if the state ever has a change of heart. Think of how difficult it is for newer sportsbooks to infringe upon the market share for entrenched heavyweights like FanDuel and DraftKings. Hawaii sports betting could face a similar uphill battle if not legalized (and launched) in the near future.

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