Aloha To Online Gambling? Hawaii Becomes Latest State To Consider Legalization In 2017

A new bill introduced by Hawaii state Sen. Will Espero seeks to end the state’s run as a state with no gambling. (Utah is the only other state that lacks any form of legal gambling.)

However, the bill’s chances of becoming law are somewhere between pigs flying and a snowball passing unscathed through hell.

Hawaii and online gambling, at a glance

The 28-page bill begins with Espero citing the 2011 Department of Justice Office of Legal Counsel opinion as the mechanism that allows Hawaii to legalize online gambling. It uses the fact that Hawaiians are already gambling tens of millions of dollars online — at offshore, unregulated sites — as the reason behind the legislation.

The bill reads:

“… tens of thousands of Hawaii residents are estimated to participate in illegal online gambling on unregulated internet web sites. These gambling web sites are operated by illegal offshore operators not subject to regulation or taxation in the United States. Questions often arise about the honesty and the fairness of the games offered to Hawaii residents, but neither federal nor Hawaii laws currently provide any consumer protections for Hawaii residents who play on these web sites. Moreover, tens of millions of dollars in 2017 revenues generated from online gambling are being realized by offshore operators serving Hawaii residents, but no benefits are provided to the State.”

The bill would also bring about the creation of a regulatory body: the Hawaii Internet Lottery and Gaming Corporation. Hawaii currently has no regulatory structure to deal with gambling; it doesn’t even have a state lottery. The bill goes on to say:

“The purpose of this Act is to create a body politic, known as the Hawaii internet lottery and gaming corporation, authorized to offer a regulated, secure, and responsible framework for the conduct of internet wagering and gaming in Hawaii that will provide consumer protections and capture additional revenues for the benefit of the State that are currently flowing offshore to unregulated internet gambling operations.”

Inside the Hawaii online gambling bill

A seven-member board would lead the Hawaii Internet Lottery and Gaming Corporation would be led by :

• Three members appointed by the governor
• Two by the president of the Senate
• Two by the speaker of the House.

Each board member would serve for five years. From the sound of it, Hawaii would use a model similar to Delaware’s. The Hawaii Internet Lottery and Gaming Corporation would select an internet gaming provider(s). And it would create most of the regulations and policies governing online gambling.

Espero’s bill is quite sweeping in its scope.

At its core, SB 677 would legalize online poker games (the bill also preauthorizes interstate agreements), online casino games, and online lottery games for residents of the Aloha State older than 18.

The bill also has an eye toward boosting tourism, which Hawaii relies on heavily. SB 677 would:

• Permit brick-and-mortar establishments in Hawaii to run land-based gaming events twice yearly. The Hawaii Internet Lottery and Gaming Corporation would oversee these events.
• Authorize free-play sweepstakes games with Hawaii-related prizes (vacation packages and such) available to residents outside of Hawaii.

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Hawaii bill is pretty much DOA

Calling Espero’s bill a long shot is being generous, considering Hawaii is about as anti-gambling a state as you’ll find. It did look at iGaming briefly in 2012. But the odds of it joining the likes of Nevada and New Jersey in regulated online gambling appear to be slim.

How surprising would it be for the bill to gain traction, or for Hawaii to legalize online gambling in the near future? As Clark Griswold says to Cousin Eddie in Christmas Vacation, “If I woke up tomorrow with my head sewn to the carpet, I wouldn’t be more surprised.”

The state has zero gaming infrastructure. With a population of 1.4 million, the amount of revenue the state would generate from online gambling would be minimal. Furthermore, there will likely be a lot of pushback from the state’s many resorts and providers of outdoor activities. They would almost certainly view any form of legalized gambling as competition for tourists’ time and money.