Why does Hawaii wagering bill continue to advance?

Despite significant opposition from government entities and indigenous groups in Hawaii, the digital betting bill HB 1308 continues to progress through the legislative process.

Similar to gambling expansion bills nationwide, HB 1308 has encountered challenges since its inception. This legislation aims to establish four digital sports betting platforms, excluding any brick-and-mortar establishments from the equation.

What sets this bill apart is the considerable resistance from various government agencies, including the attorney general’s office, local law enforcement, and the departments of taxation and finance. Notably, the department of commerce and consumer protection, which was initially designated as the regulatory body for the bill, has also expressed strong opposition.

On the other hand, advocacy from the gaming industry has been both palpable and pronounced. Contributions to lawmakers, as highlighted by iGB, reveal that several legislators who received funding from the Sports Betting Alliance (SBA)—which previously had no financial ties to Hawaii lawmakers prior to 2024—have taken significant steps to advance gambling-related bills in the current session. Some legislators have actively championed the swift progression of HB 1308.

Moreover, Hawaii Governor Josh Green has received two notable donations from Boyd Gaming, which partners with local travelers to promote its Las Vegas offerings. Boyd Gaming has voiced its objections to the current expansion of gambling in Hawaii for the first time this year, opposing two digital betting bills while supporting a proposal for a gambling study.

The Hawaii State Campaign Spending Commission indicates that “candidate named committees” for six legislators received $1,000 contributions from the SBA between December 17 and 20, 2024. Prominent SBA members include BetMGM, DraftKings, Fanatics Betting & Gaming, and FanDuel.

The donation recipients include:

• Representative Daniel Holt, co-sponsor of HB 1309 and member of the finance, tourism, and economic development & technology committees.
• Senator Dru Kanuha, sponsor of SB 893 advocating for land-based casinos, who serves on the ways and means committee.
• Senator Christopher Todd, co-sponsor of HB 1308, with affiliations to the tourism and economic development & technology committees.
• Senate President Ron Kouchi.

DeCoite has sponsored a bill similar to HB 1308, which advanced out of her committee but was eventually deferred by a joint committee meeting focused on commerce and consumer protection as well as ways and means. While DeCoite supported SB 893, it too experienced deferral by the same joint committee. During the discussion regarding SB 893, DeCoite acknowledged the contentious nature of gambling in Hawaii: “Casino gambling has not always been a favorite subject,” she remarked. “Regardless of whether we are flying to Vegas or another location, we’ve faced challenges here in Hawaii.”

Next, HB 1308 proceeds to the ways and means committee, where both DeCoite and Kanuha hold seats.

Timely Donations from Boyd Gaming

Boyd Gaming made notable contributions, including two payments to Governor Green totaling $5,546 and an additional $2,700 to Kauai Mayor Derek Kawakami on September 3, 2024. These donations were made during Governor Green’s trip to Las Vegas aimed at examining sports tourism, as stated in a press release from his office. The governor attended a Las Vegas Raiders game alongside Boyd Gaming executives on October 13, 2024, with Boyd’s properties being promoted as the “official and exclusive” local casinos for the team.

This trip from October 10 to 15, 2024, underscored the rising prominence of Las Vegas as a sports destination. Although Green has articulated support for a proposed multi-use stadium in Hawaii, his stance on gambling expansion remains ambiguous. In a January interview with Hawaii News Now, he remarked that he “supports careful exploration of sports wagering in Hawaii, provided that proper safeguards are in place to prevent abuses.”

The latest developments concerning legal sports betting have emerged from hearings held on March 19 and 21, where the house tourism and economic development committees advanced SB 891. This bill aims to establish a working group tasked with evaluating previous proposals for gambling legalization to determine their viability for implementation in Hawaii.

Controversy Surrounding the Study Bill

During the March 19 hearing, lawmakers engaged in extensive discussions regarding the composition of the proposed study committee. The initial language of the bill included representatives from BetMGM, Boyd Gaming, and DraftKings as participants. Both BetMGM and DraftKings are members of the SBA and have consistently provided testimony in various gambling hearings. Boyd Gaming has also actively participated in these discussions.

Representative Ikaika Hussey articulated apprehension regarding the inclusion of corporate representatives, stating, “I believe it would be inappropriate for those corporations or their designees to be part of the decision-making process or to contribute to the final deliverables of the working group. Hence, I recommend their removal.”

Committee member Lauren Matsumoto echoed similar concerns, emphasizing, “There are many gaming corporations, and specifically naming DraftKings and MGM raises issues.” Conversely, Representative Adrian Tam contended that naming the corporations would facilitate transparency in the selection process and encouraged inclusion of gaming industry representatives based on expertise.

Ultimately, the committees agreed to remove specific company names while permitting seats for “three individuals from the gaming community.”

Outstanding Key Issues

Across all committees, as well as on the house floor, some legislators have supported HB 1308 “with reservations.” On March 4, alongside 15 “no” votes, three members offered conditional support. In earlier committee votes, several members expressed reservations, indicating that had they opposed the bill, its advancement could have been jeopardized.

Notably, the manner in which committee chairs have maneuvered the bill’s progression is noteworthy. In a relevant house finance committee session on February 24, Chair Kyle Yamashita proposed a verbal amendment to remove the 10% tax rate and $250,000 licensing and application fees amidst concerns that the legislation might not pass. This amendment facilitated the bill’s passage to the house floor.

Concerns voiced by opponents during the house floor discussion included the potential diversion of local funds to out-of-state operators, exacerbation of gambling addiction, and the negative impact on the integrity of sports. Some legislators equated the risks associated with wagering to those of substance abuse, drawing parallels with drugs like heroin and fentanyl. One lawmaker indicated that any revenue derived from legalized sports betting would be regarded as “dirty” money.

During a senate economic development and tourism committee hearing held on March 13, the vote to advance the bill passed 5-0; however, two votes were cast “with reservations.” DeCoite, the committee chair, expeditiously moved witnesses through their testimony, allocating approximately one minute apiece. She also scrutinized Nadine Ando, the director of the department of commerce and consumer affairs, who expressed concerns regarding the resources and complexities entailed in regulating legal sports betting, stating her department might not be equipped for the task. DeCoite subsequently amended the bill to delegate regulatory responsibility to the department of economic development and tourism.

When calling for the vote, she asserted that “this conversation should be had, and we should be addressing this upfront.”