Hawaii, known for its idyllic landscapes and laid-back lifestyle, is now stepping into the high-stakes world of online gambling. A surprising move, given its historical stance against such activities. This seismic shift is propelled by a newly proposed bill, SB3376, introduced by Senator Ronald D. Kouchi, aiming to establish a regulated online gambling market in 2024.

The proposed bill seeks to address Hawaii’s struggle with black market operators, providing a regulated and safer alternative for residents. The bill proposes the formation of the HGCC, comprising seven part-time members appointed by the Governor. This commission will oversee online-only gambling, ensuring the state remains free of regulated retail gambling.

The selected licensee, offering sports betting and online poker (excluding casino games), faces a distinctive profit split. In the first year, the ratio is 70% for the state and 30% for the operator; however, over the next years, the ratio gradually shifts in favor of the operator, reaching a minimum of 5%.

Senator Kouchi’s legislation aims to curtail the tens of thousands of Hawaii residents engaged in illegal online gambling on offshore platforms. The bill argues that a regulated market would not only capture lost revenue but also benefit the state and its citizens. With Hawaii still recovering from the aftermath of the 2023 wildfires, the state urgently needs additional income. The proposed gambling market could offer a financial lifeline.

Despite its unique approach, the bill faces challenges. Hawaii’s small population and the niche nature of poker may make it less appealing to operators. The absence of references to interstate compacts raises questions about sustaining online poker traffic. The legislation’s ambitious timing aims for effectiveness on July 1, 2024, giving the HGCC 120 days to accept applications and an additional 90 days to select a winning candidate. A probable market launch is expected in the first half of 2025.

The House sports betting bill, HB 2765, adds to the uncertainty. Without a hearing date, its fate remains unknown. Hawaii’s unique approach to online gambling reflects a broader trend of states exploring such avenues for revenue and regulatory control. As the legislative process unfolds, industry experts are keenly watching Hawaii’s approach. The state’s strategy mirrors past proposals, emphasizing sports betting over poker for its broader appeal and revenue potential.

Hawaii’s consideration of limited online gambling legalization in 2024 represents a significant departure from its traditional stance. The proposed bill, though unique, faces immediate challenges and uncertainties. As the Aloha State navigates these uncharted waters, the nation watches, anticipating the outcome.

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