A surprising new bill introduced in Hawaii has put the state on the map for potential online gambling expansion. Senator Ronald D. Kouchi has proposed bill SB3376, which would create a limited form of online gambling in the state by 2024. The bill aims to establish a single-operator market for online poker and sports betting, an unexpected move for a state not typically associated with gambling expansion.

The proposed bill would establish the Hawaii Gaming Control Commission (HGCC), consisting of seven part-time members appointed by the Governor. The HGCC would regulate online-only gambling, keeping Hawaii free of any regulated retail gambling. The commission would be responsible for selecting a single operator for licensing, with a 10-year renewable license, prioritizing ease of regulation.

The legislation is seen as a way to address the large number of Hawaii residents engaging in illegal online gambling on offshore platforms. The bill argues that a regulated market would capture lost revenue and benefit the state and its citizens, especially in the aftermath of the 2023 wildfires. The selected licensee may offer sports betting and online poker, but not casino games. The financial terms involve a unique profit split, starting at 70% for the state and 30% for the operator in the first year, gradually shifting in favor of the operator in subsequent years.

However, the bill faces several immediate issues. Hawaii’s small population size and the niche nature of poker could make it less attractive to operators. The bill also omits any references to negotiations for interstate compacts, leaving questions about sustaining online poker traffic. The bill also faces ambitious timing, aiming to become effective on July 1, 2024, giving the HGCC 120 days to accept applications and an additional 90 days to select a winning candidate, setting a probable market launch in the first half of 2025.

The fate of the bill remains uncertain, as another sports betting bill, HB 2765, does not yet have a hearing date. The proposed legislation reflects a continuing trend of states exploring online gambling as a source of revenue and regulatory control. Industry experts are closely watching to see how Hawaii’s unique approach will fare in the legislative process.

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