An amended version of HB 1308 received committee approval, but at least six members voted “with reservations”. Finance was the third and final Hawaii house committee to pass the bill, which now moves to the house floor. A companion bill, SB 1569, is set to be heard in the senate ways and means committee on Wednesday.

Just ahead of Monday’s vote, chairman Kyle Yamashita offered amendments to make passage more palatable. He suggested removing the tax rate – originally set for 10% – and the licensing fee pending further review. There was much discussion during the hearing about how many tax dollars the state stands to gain.

In addition, representative Sue L Keohokapu-Lee Loy said the $250,000 (£197,761/€238,712) licence fee “appears rather low for an industry that makes billions of dollars. I would love to see that licence fee go up exponentially.”

In offering the amendments, Yamashita said that he thought the bill was worthy of continued discussion and that the committee should advance it “as a work in progress”.

“We do have to bring up gambling, so I don’t think it’s a bad thing to talk about,” he said.

Unions, industry offer support

As in previous hearings in both chambers in Hawaii, local unions supported the bill, saying they’re “in favour of any new money” coming into the state to help defray the high cost of living. In addition, representatives from BetMGM, DraftKings and the Sports Betting Alliance (SBA) offered endorsements. All three cited advantages of a legal market such as giving law enforcement the tools to clamp down on illegal gambling and increasing tax revenue.

The SBA consists of BetMGM, DraftKings, Fanatics Sportsbook and FanDuel.

BetMGM head of government affairs Jeremy Limun suggested that tax revenue for Hawaii (population: 1.45 million) would range from $10-$20 million per year based on a 10% tax rate. That assumes operator revenue of between $100-$200 million per year and handle of more than $1 billion per year.

For comparison, Maine (population: 1.4 million) launched digital sports betting operators in November 2023. In the first 12 months, $550 million was bet and the state collected $6 million in tax revenue. Maine also has a 10% tax rate.

In West Virginia (population: 1.77 million), where digital betting has been live since September 2019, total handle for four and a half years is $2.8 billion. The state has collected a total of $25.9 million in tax revenue.

Opposition points to financial issues, crime

Several opponents who testified, which included several from state offices and advocates for problem and responsible gambling, pointed to the risk of addiction as a key negative. In particular, they raised concerns about an increase in bankruptcies and some crimes associated with gambling addiction.

The bill would allow for only digital sports betting and cap the number of licences at four. Among payment methods, customers would be able to fund accounts with credit cards, which is banned in some states, including Iowa, Massachusetts and Tennessee.

In addition, the proposal would create a problem gambling prevention and treatment fund.

The Hawaii legislative session runs until 2 May and the crossover deadline for the bill to cross from one chamber to the other is 6 March.