House committee advances bill to license online sports wagering, adds confidentiality and regulatory changes

The House Committee on Economic Development and Technology voted to pass House Bill 1308 with amendments on Jan. 31, 2025, advancing a bill to create a legal, taxable framework for online sports wagering in Hawaii.

The measure, as amended by the committee, requires that mobile applications and digital platforms that accept wagers be connected to the internet, narrows public disclosure of applicant and licensee information to the extent allowed under the Uniform Information Practices Act (UIPA), and transfers primary regulatory responsibility from the Department of Business, Economic Development and Tourism to the Department of Commerce and Consumer Affairs. The committee also added committee notes instructing later committees to consider tax-percentage benchmarks used in other states when setting a tax rate and to review Department of Taxation comments.

Proponents at the hearing said a regulated market would curb an existing offshore and unregulated industry and generate revenue that could be earmarked for problem-gambling prevention and treatment. Jeremy Limoun, director of government affairs for BetMGM, told the committee that illegal and sweepstakes-style platforms “are not subject to any gross sports betting taxes, do not offer any meaningful responsible gambling tools, and do not employ sophisticated know your customer identity or age verification processes.” Limoun said the illicit industry expects about $11,400,000,000 in player purchases and $4,000,000,000 in net revenue nationally this year, figures he presented as part of the rationale for regulation and taxation.

Industry witnesses said regulated operators offer age and identity verification, consumer-protection tools and responsible-gambling features that they said are absent from many unregulated apps. Rebecca London, senior government-affairs manager for DraftKings, said the regulated industry is open to working with lawmakers on guardrails and technical questions raised by state departments.

Labor and local-business witnesses urged passage on fiscal and economic grounds. Duane Bautista and Cody Sulau, testifying for Ironworkers-affiliated funds, said revenue from a licensed market could support education, housing, health care and child-care programs and help keep skilled workers in Hawaii.

Committee amendments also reflected agency requests. The Office of Information Practices and Department of Business, Economic Development and Tourism requested confidentiality and data-treatment language; the committee limited disclosure of applicant and licensee information to what would not be publicly disclosable under UIPA. The chair said Department of Taxation comments would be appended to committee notes for the next committees to consider how to implement tax and reporting rules.

Representative Todd commented during final consideration that lawmakers often understand potential harms of legalization but sometimes under-recognize the current harms of prohibition, including an unregulated market that lacks consumer protections. Representative Matsumoto said she had originally planned to vote no but changed her vote to “reserve” after hearing testimony and wanting stronger regulatory guardrails.

The committee voted to pass HB1308 with the chair’s amendments. The committee record notes Representative Matsumoto’s reservation; no detailed roll-call tally for all members was provided in the transcript.

The bill’s amended language and committee notes will go to the next committee of referral for further drafting on tax percentages, regulatory rules, and technical provisions.

Ending

The committee’s action sends HB1308 forward with directions for subsequent committees to set tax benchmarks and refine regulatory details. The measure now proceeds through the legislative process for further drafting and committee consideration.