- Hawaii committee approved a bill for digital sports betting with six operators and 15% tax rate.
- South Dakota Senate passed a resolution letting voters decide on mobile betting in November.
- Both faced addiction concerns, though supporters cited existing illegal gambling activity.
HONOLULU – Hawaii and South Dakota made progress on online sports betting legislation this week, marking an unexpected shift for two states with long track records of opposing gambling. Officials in both locations approved measures that would allow residents to place wagers through mobile devices, though their methods for implementation are completely opposite.
Hawaii Committee Advances Controversial Bill
A significant change for a state that has never allowed gambling of any kind was made when the House Committee on Economic Development & Technology in Hawaii voted to forward HB 2570. Reports indicate that the committee passed the measure in a narrow vote, either 4–3 or 5–2, depending on how the votes for “yes with reservations” are tallied.
The bill would create a marketplace that is exclusively digital and has at least six authorized operators. Operators would have to pay $500,000 for initial license and renewals, and Hawaii betting sites would be subject to a 15% tax on adjusted gross revenue. Regulation would fall within the purview of the Department of Business, Economic Development, and Tourism.
With 41 testimonials against the law and only 11 in support, there was a significant amount of opposition. While the attorney general’s office expressed worries about insufficient oversight, Honolulu prosecutor Steve Alm noted studies indicating 96% of bettors lose money. Advocates contended that an estimated $680 million is currently wagered by Hawaiians each year on illegal offshore platforms.
South Dakota Takes Different Approach
By a vote of 23–10 on Wednesday, the South Dakota Senate passed Senate Joint Resolution 504, although this proposal takes a completely different approach. The proposal would put a constitutional amendment on the ballot in November, giving voters the last word, rather than outright making legal sports betting.
90% of mobile betting money would go toward lowering property taxes, with 10% going toward Deadwood’s historic preservation, according to Sen. Casey Crabtree’s proposal. Residents who frequently go across state lines to wager in Iowa or Wyoming currently have no internet options because South Dakota sportsbooks are limited to operating in Deadwood casinos and tribal institutions.
In their concerns about compulsive betting, critics pointed to statistics showing that South Dakota has the second-highest rate of gambling dependency problems in the US, after Nevada. Sen. Joy Hohn questioned the rationale behind using proceeds from gambling to fund state initiatives.
Sen. Amber Hulse and other supporters, however, argued in favor of creating regulatory protections for an existing unlawful action. Before the resolution can be put to a vote in November, it must be approved by the House.
