Ahead of Super Bowl, effort to legalize online sports betting in Hawaii fails in state Legislature

The sports gaming industry and supporters came in with the argument that thousands of people are already illegally betting on sports in Hawaii and so it would be beneficial to legalize it, regulate it and tax it.

Pat Gibbs, lobbyist for the Sport Betting Alliance, told the House Economic Development Committee that an Ernst and Young study for the industry estimated that “276,000 people bet a combined total of $670 million in illegal sports wagers each year in Hawaii, using bookies or offshore sites on their phones and computers.”

But asked where those gamblers tend to be located yielded an admission — that the numbers were extrapolated from a national study with no specific focus on Hawaii. “So we don’t have specific numbers,” Gibbs said. “Because it’s an illicit market with participants and operators who do not want to be tracked.”

The industry also estimated legal online sports betting on their platforms could bring in about $7 million a year.

But gambling opponent, state Rep. Elijah Pierick, said that legal or illegal, the harm is the same.

“The statistics are highly against them,” Pierick said. “They probably are not going to win their wager they are probably going to lose more of their money.”

Rebecca London, representing Draft Kings, said their system allows them to watch for problem gambling and encourage players to limit how much time and money they spend. “What we find is that the most sustainable consumer base is folks that are doing it in a responsible fun way,” London said.

Legislative leaders said with 35 states allowing online sports betting, it was the only form of gaming with even a slim chance of passing this year.

Committee chair Rep. Daniel Holt, who sees lots of illegal gambling in his Kalihi district and recently supported a system of local sports betting and poker parlors, announced his recommendation was to kill the bill.

“I think maybe at some point this may be a worthy cause for us, but at this point, $7 million a year may not be worth putting our communities at risk,” Holt told the committee.

Holt and House leaders said that was the last we will hear of gambling this year. Senate leaders also said with an legislative agenda already packed with urgent issues, legalizing gambling is almost certainly dead for the year.

Gov. Josh Green has indicated that he is open to discussing gambling bills, although he also expressed concern that legalization would only increase the number of people who are harmed by gambling habits.