Hawaii Lawmakers’ Sports Betting Bill Blocks Industry Giants like FanDuel

Hawaii lawmakers are making another push at legalizing sports betting, but this time, they have added a surprising twist.

The group of policymakers has proposed a bill that would allow sports betting and poker in Oahu, the most-populated Hawaiian island, but bans the top operators in the industry from joining the market. This means that FanDuel, DraftKings, and other gambling giants would be locked out.

The bill was introduced to state legislators Monday. The main sponsors said that it would redirect the supposed $1 billion locals spend in Las Vegas every year.

House Vice Speaker John Mizuno (D-District 28) and state Rep. Daniel Holt (D-District 29) helped file the bill at the top of the week. Mizuno wants to erect a dedicated lounge for sports betting and card games to help detract from the power of over 7,200 illegal gambling rooms spread throughout the islands.

If the bill succeeds in funneling illegal gamblers into legal centers, it will kill two birds with one stone, both by redirecting criminal gamblers and keeping Vegas travelers on the islands.

“If crime is associated with gambling, why is gaming legal in 48 states, and why are so many Hawaii residents going to Las Vegas?” said Mizuno. “The people I know who enjoy trips to Las Vegas are mostly kupuna (grandparents, elders), not criminals. I feel it is important to discuss options to keep local money in the local economy.”

The increase in illegal gambling destinations has also created other legal problems for local authorities. Paid sex and drug distribution were cited as two main criminal activities that have thrived in conjunction with illegal gambling dens.

Holt sees the growth in overall crime as another reason lawmakers need to consider legalizing gambling. 

“These game rooms are unregulated,” Holt said. “They often have to do with drugs and prostitution as well. By having a legal avenue to express their willingness to play these poker games we are going to get the tax revenue.”

An estimated 500,000 Hawaiians visit Las Vegas every year. America’s gambling capital has such a hold on the islanders that it has been nicknamed “the ninth island” in reference to Hawaii’s eight major islands.

Under the terms of the proposal, each gambling center would be built up to a maximum of 25,000 square feet. Each facility could host 10-30 poker tables and offer sports betting odds through non-market-dominant entities.

Sports betting licenses would also be restricted to in-person wagering for at least two years. Once the facility has proven itself worthy, it would be able to apply for an online operator’s license.

“We are taking an industry that is being unregulated and putting it into regulation and benefiting our communities at the same time," said Holt.

Mizuno and Holt’s reason for excluding FanDuel, DraftKings, and the other mega-corporation is two-fold: First, it is a concession to the anti-gambling crowd, but more importantly, they believe those companies would only be entering the Hawaiian market to make out with a quick profit. As such, only residents of 35 years or more on the islands would be able to receive licenses.

Former criminals (excluding tax evaders) would be part of the group allowed to apply for licenses, assuming they meet the tenure requirement. That came under the advice of Eric Ford, associated with Full House Poker, who is assisting Mizuno during the process.

State tax revenue from the gambling operations would go towards funding the police to help crack down on illegal gambling outfits, build affordable housing, and organize addictive gambling treatment programs.

Hawaii Governor Josh Green said that he is interested in hearing a full proposal from the pair of legislators.

“We need revenue for our state, but the revenues, if you are not careful, do come from those who are tending to have economic problems or challenges,” said Green. “So I’d like to be careful.”

36 states and Washington D.C. offer legal sports betting. Ohio is the most recent addition to the list, while others like Missouri are lining up.