Hawaii State Senator Introduces Legislation to Legalize Online Poker, Casino, and Lottery

Hawaii holds the distinction of being one of only two American states, along with Utah, where all forms of gambling are illegal – but one state senator hopes to change that through the proposal of a new iGaming bill.

Senate Bill 677 was officially introduced by state senator Will Espero (D-19) on January 20.

Over the course of 28 pages, the statutory language within SB 677 calls for the creation of a new Hawaii Internet Lottery and Gaming Commission. Per section three of Espero’s bill, this regulatory body would be tasked with  establishing the framework of a statewide industry offering the following products and services:

“Internet wagering on games of chance and games of skill, including lottery, poker, and casino games, to individuals over the age of eighteen years; provided that the corporation shall not offer internet wagering on any sporting event or sporting contest.”

As that provision outlines, SB 677 would allow for online poker, casino games, and lottery – but sports betting over the internet would remain prohibited in recognition of the federal Professional and Amateur Sports Protection Act (PAPSA) of 1992.

Additionally, these iGaming services would be permitted to any players over the age of 18 – rather than following the typical gambling age threshold of 21.

A Democrat representing Hawaii’s 19th district, Espero has been a state senator since 2002. In the first section of SB 677, Espero cites a 2011 decision by the U.S. Department of Justice which reversed the longstanding interpretation of the Federal Wire Act of 1961. As Espero writes, this reversal effectively allows states to legalize and regulate online gambling industries within their jurisdictional boundaries.

Espero continues by outlining the state’s interest in iGaming legalization, pointing to the fact gambling over the internet is already rampant among Hawaiian residents:

“The legislature also finds that 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 revenues generated from online gambling are being realized by offshore operators serving Hawaii residents, but no benefits are provided to the State.”

Other items of note buried within SB 677 include the infamous “bad actor” clause. This controversial provision, which has helped stall similar online poker legislation in California for years now, forbids any operators who continued serving U.S. customers after the federal Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 was authorized.

The bad actor clause was ostensibly designed to bar PokerStars – the world’s leading online poker room and a blatant violator of the UIGEA between 2006 and 2011 – from capitalizing on ostensibly ill-gotten market share.

Espero also wrote SB 677 to provide an infusion for the local tourism industry, which forms the foundation of Hawaii’s local economy. If the bill was passed as authored, Hawaii’s newly formed iGaming regulatory body would supervise two live gambling events – poker tournaments are the best bet – as a way of sending contest winners to the state.