Hawaii Lawmakers Propose Sports Betting and Fantasy Sports Legalization

Hawaii has long maintained its ban on all forms of gambling, standing out as one of the strictest states in the U.S. when it comes to gaming laws. However, a series of bills introduced during the 2025 legislative session aim to change this, with proposals targeting the legalization of sports betting, fantasy sports, and other forms of online gaming.

While these proposals represent a concerted effort to introduce legalized gambling to Hawaii, the state’s entrenched opposition and concerns about the social consequences of gambling suggest a challenging road ahead. Lawmakers and advocates will need to address these concerns while demonstrating the economic and regulatory benefits of legalization.

New Legislative Proposals Focus on Sports Betting and Fantasy Sports

Among the latest legislative efforts, Senate Bill 373 (SB 373), introduced by Senator Angus McKelvey (D-Maui), seeks to legalize and regulate online fantasy sports contests in Hawaii.

Co-sponsored by Senators Joy San Buenaventura (D-Puna) and Glenn Wakai (D-Oahu), SB 373 proposes creating a framework for fantasy sports platforms, which would be monitored by the Department of the Attorney General. The bill also includes a provision to tax the gross revenues of these platforms, potentially generating new funds for state programs.

McKelvey defended the proposal, arguing that fantasy sports contests rely on skill rather than chance. “They say it’s gambling. I say it’s not,” McKelvey stated, citing research from the Massachusetts Institute of Technology that s the skill-based nature of fantasy sports.

While a 2016 opinion from former Attorney General Douglas Chin deemed daily fantasy sports illegal, McKelvey insists the new framework would provide clarity and oversight.

Another notable proposal is Senate Bill 1572 (SB 1572), introduced by Senator Lynn DeCoite (D-Maui, Molokai, and Lanai). This bill focuses on creating the Hawaii State Sports Wagering Commission to regulate retail and online sports betting.

The proposal includes a $250,000 licensing fee for operators, valid for five years, and a tax rate of 15% on adjusted gross receipts (AGR). Unlike SB 373, this bill explicitly excludes fantasy sports but allows wagering on professional sports, while prohibiting bets on collegiate or high school games and animal sports like horse racing.

Economic Motivations and Potential Hurdles

Proponents of these bills highlight the potential economic benefits, especially as Hawaii continues to recover from the devastating Lahaina wildfires of 2023. Senator McKelvey emphasized that revenue generated from legalized sports betting and fantasy sports could rebuilding efforts and fund critical public services such as education and infrastructure.

“I thought it was a way to bring us up to speed with all the other states of the nation, allow us to tap into unrealized tourist revenue, and provide… extra monies for the Lahaina rebuild,” McKelvey explained.

Despite the optimism, Hawaii’s previous gambling proposals have faced significant opposition. Cultural and social concerns about addiction, local values, and the influence of mainland corporations like DraftKings and FanDuel have repeatedly derailed similar efforts. In 2023, a bill proposing online sports betting and poker failed to gain traction due to resistance from community groups and lawmakers.

Other Gambling Proposals Under Consideration

In addition to SB 373 and SB 1572, lawmakers have introduced House Bill 1308 and Senate Bill 1569, which would legalize both sports betting and fantasy sports under the oversight of the Department of Business, Economic Development, and Tourism (DBEDT).

These bills propose a 10% tax on adjusted gross receipts and plan to launch a minimum of four online sports betting platforms starting July 2025.

Senate Bill 1507 (SB 1507), sponsored by Senate President Ron Kouchi, proposes establishing the Hawaii Lottery and Gaming Corporation to oversee online gaming operations, including lottery, poker, and casino games. This bill stands out by excluding sports betting and focusing on creating a tax-exempt entity to channel revenues into community initiatives.

Source:

“Hawaii Legislators Push for Legalized Sports Betting and Fantasy Sports”, worldcasinodirectory.com, January 24, 2025.