HONOLULU — If gambling industry prognosticators are correct, Sunday’s Super Bowl showdown between the Cincinnati Bengals and the Los Angeles Rams is all but a lock to generate record levels of wagering, thanks in part to the continued rise of mobile sportsbook apps.

The American Gaming Association is predicting that 31.4 million Americans, a 35% increase from last year, will bet on the game for a total of $7.61 billion in legal and illegal wagers.

According to AGA, 9 million people plan to wager online, an increase of about 70% over last year. The number is bolstered by New York and Louisiana’s recent adoption of legalized sports betting, which pushed the number of Americans able to bet legally on athletic events past 100 million. 

Hailed as the first Super Bowl of the online betting era, the big game will likely have a significant impact on the tax coffers of the 30 states that have so far legalized sports wagering.

But not Hawaii, which along with Utah is the only state to ban virtually all forms of gambling. So, depending on who you speak to, the state will either be blissfully untainted by a social threat in digital clothing or foolishly self-deprived of much-needed tax revenue from a modern, well-regulated industry.

Things could be different by the time Super Bowl LVII comes around, however, thanks to a trio of bills treading water in the state Legislature.

HB 736, introduced by Rep. Chris Todd last year and held over to the current session, would amend the definition of gambling in the Hawaii Revised Statutes to exclude “digital sports betting on a platform licensed pursuant to state law” and establish a three-year pilot program under the Department of Business, Economic Development and Tourism to license businesses in the state to operate digital sports betting platforms. The department would be authorized to issue licenses, at a fee of $30 million each, to a maximum of five businesses.

Todd also introduced a new measure this session that excludes sports wagering from the HRS definition of gambling, gives DBEDT regulatory authority over sports wagering and establishes licensing requirements for sports-wagering operators and sports-wagering suppliers. The bill defines sports wagering as occurring “by any system or method of wagering approved by (DBEDT) via a mobile sports wagering licensee’s mobile applications and digital platforms that use communications technology to accept wagers.”

Meanwhile, HB 1815, introduced this session by Rep. John Mizuno, proposes the creation of an online wagering corporation to regulate and administer internet sports wagering in the state. The measure has attracted the attention of several digital gambling publications due to a provision that would tax winnings at a rate of 55%.

The bill passed first reading and has been referred to the House committees on Economic Development; Commerce, Consumer Protection and Health; Judiciary and Hawaiian Affairs; and Finance. 

If any of these measures are successful, Hawaii would join a movement that started with mainstreaming of fantasy sports leagues in the mid-2000s and accelerated in 2018 when the Supreme Court struck down a 1992 federal law that banned states from legalizing sports betting.

With the lifting of the prohibition came the rapid rise of digital sportsbook businesses like FanDuel, DraftKings and BetMGM and the equally rapid buy-in of sports networks, radio, newspapers, magazines, podcasts and other sports-related media that now regularly feature betting odds, tips, strategies and features. 

In testimony before the House Committee on Economic Development regarding HB 736, DraftKings representative Rebecca London emphasized that sports wagering already occurs in Hawaii “on a massive scale,” with an estimated 276,000 people illegally betting more than $669 million each year, according to AGA. 

“Across the country, states are bringing this activity into a legal, regulated market that mandates robust consumer protections,” London testified. 

London noted that DraftKings uses advanced technology to ensure that people under the legal age to gamble are not able to create an account and provides safeguards like play limits and self-exclusion options to help those who might be vulnerable to gambling addiction, assurances that aren’t found on the illegal market. 

Still, the bill received considerable opposition from the DBEDT, the prosecutor’s office, the Honolulu Police Department and individual testifiers.

The Department of the Prosecuting Attorney testified that Hawaii law already makes allowances for “social gambling” like poker nights and informal betting pools.

“If conducted in this manner, ‘sports wagering’ can already be enjoyed legally by Hawaii residents and the department has no problems with such activity,” the department stated in written testimony. “Once gambling starts to involve large-scale operations, business corporations or other money-making entities, however, the department is extremely concerned about the known risks and societal costs associated with legalized gambling. Our laws currently list ‘gambling’ within the definitions of ‘organized crime’ and ‘racketeering’ for good reason.”

In a statement to Spectrum News this week, HPD reiterated its opposition to legalized sports betting: “Numerous studies have shown gambling to be associated with bankruptcy, theft, embezzlement, homelessness, incarceration and suicide. Research has also shown that gambling systems function as a regressive tax on lower income individuals, those who can least afford to participate. The financial burden associated with legalized gambling will far outweigh the potential economic benefits.”

Ray Cho, a former Hawaii resident and post-doctoral associate at Rutgers School of Social Work, Center for Gambling Studies, said HB 736 lacks sufficient explanation of how the pilot program would be operated and acknowledgement of the myriad of factors that would be in play with Hawaii’s first foray into legalized gambling. He also noted that the provision to differentiate sports betting from gambling was mostly semantic and an attempt to “dance around calling something gambling.”

Still, he said the measure represents a useful opportunity to begin a conversation about what legalized gambling would mean for Hawaii.

“What we can stand for as a community from a values standpoint is a different question than what we can manage,” Cho said. “I think it’s blatantly clear that no matter how much we don’t have gambling in the books as legal, we haven’t been able to eliminate gambling. I think it would be extremely naïve to think that if we keep fighting the good fight we’ll get rid of gambling.

“There is this revolving door of legislation followed by killing the bills and meanwhile HPD is playing this cat-and-mouse, whack-a-mole game with illegal game rooms,” he said. “If that’s the status quo and we’re OK with that, I get it. But I would definitely encourage the legislature and the community to understand that the times are a-changing. Sports betting is a good starting point to have this discussion because the sports-entertainment product is a lot different than what it used to be.”

While Cho said he supports in theory a well-regulated industry but thinks Hawaii still has a long way to go to understand how legalized gambling would work here.

“This is all very new,” he said. “A lot of laws are very antiquated based on what we knew about what gambling was many, many years ago, so you can’t fault states for having the most buttoned-up language on it. This is an opportunity to have a conversation.”