Hawaii Considers Opening Door to Regulated Gambling
Lawmakers in Honolulu are reconsidering whether to open Hawaii to regulated gambling after decades as one of two states with no legalized gaming.
LISTEN TO THIS ARTICLE:A series of bills introduced this legislative session would sharply reshape Hawaii’s long-standing prohibition on gambling, proposing everything from full-scale casinos to lottery services and cruise-ship gaming. Lawmakers have also established a Tourism and Gaming Working Group to study the economic and social impacts of legalization as debate intensifies in the state capitol.
The most expansive proposal, HB 2222, would establish a state Gaming Control Commission to license and oversee commercial casinos. Under the draft framework, operators would face a $1 million application fee and, if licensed, a $5,000 annual fee; licenses would run for 20 years. The bill sets a proposed tax rate of 15% on table-game revenues and 20% on other gambling receipts, with revenues earmarked for a newly created State Gaming Fund alongside requirements for safer-gaming programs and consumer protections.
Another bill, HB 1945, takes a narrower approach by permitting regulated gaming on cruise ships that visit Hawaiian ports. That measure would place oversight with the Hawaii Department of Commerce and Consumer Affairs rather than creating a new regulator, reflecting an incremental strategy that seeks to capture tourist dollars without upending state law on land-based gaming.
Several carryover measures from prior sessions remain active. HB 1308 would create a regulated sports-betting market; companion measures HB 1434 and SB 1507 aim to establish a lottery regulator and launch state lottery operations. Separately, SB 893 proposes adding casino gaming amenities to the New Aloha Stadium Entertainment District and within the Hawaii Convention Center precincts, linking venue redevelopment plans with possible gaming concessions.
In response to the emergence of prediction markets – platforms that allow users to wager on political, economic or event outcomes – lawmakers have also moved to pre-empt that vertical. HB 2198 would explicitly define prediction markets as unlawful in Hawaii, rejecting operators’ claims that Commodity Futures Trading Commission oversight makes such products permissible nationwide. The clash echoes regulatory fights in other states involving firms such as PrizePicks and Kalshi and raises familiar questions about the boundary between financial contracts and gambling.
Related: Hawaii Set to Legalize Sports Betting and Fantasy Sports
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Industry Reaction and Next Steps
Industry stakeholders and community groups are already weighing in as bills advance through committees. One industry analyst, speaking on condition of anonymity, said, "Opening Hawaii’s market would create a new revenue stream and attract operators who see tourism as a reliable base, but getting the regulatory architecture right will be crucial if the state wants to avoid social harms and ensure tax revenues reach local priorities."
A consumer advocate added, "We are wary of rapid expansion without firm safeguards. Prediction markets and new betting formats present particular challenges for problem-gambling prevention and must be addressed explicitly in any legalization plan."
Legislative proponents argue that controlled legalization could fund public projects and reduce illicit activity, while opponents point to cultural and social objections as well as the uncertain effects on local communities and tourism. The Tourism and Gaming Working Group is expected to deliver findings and recommendations to lawmakers as hearings continue; committee votes and floor calendars will determine which measures survive the session.
Key Questions for Lawmakers
As the debate progresses, several questions will shape the outcome: Which regulatory model best balances revenue and public safety? Should the state create a dedicated gaming regulator or expand existing agencies? How will tax revenues be allocated, and what consumer-protection standards will be mandatory? Lawmakers must also reconcile competing visions – large integrated resorts versus targeted measures like cruise-ship gaming and lotteries – while responding to constituent concerns and stakeholder lobbying.
With multiple high-profile bills in play and a working group tasked with examining impacts, Hawaii’s longstanding prohibition on legal gambling could be altered in either incremental or sweeping ways depending on committee outcomes and public response over the coming months.
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