Hawaii Considering Move From No Gambling to Legal Betting and Casino Resorts

Over two-thirds of the US has legalized sports betting, but there are still a few hold outs that could completely revolutionize the country’s betting industry as a whole. Specifically, states like California and Texas, where the betting potential is tremendous, and the revenue would be momentous. But jumping past those bigger untapped markets, the news today is that Hawaii is exploring sports betting bills. Hawaii – a state with a zero tolerance gambling policy, where there are no casinos, no sportsbooks, and no real money gambling platforms. Even DFS is illegal there.

Yet sports betting bills were introduced last year, and now it looks like the tables are set to completely turn. Hawaii, alongside Utah, Alaska, Alabama, and a small handful of other states, was one of those jurisdictions that looked like it would never allow gambling. Not for the same religious reasons as Utah, for example, but in order to keep Hawaii’s wholesome image as an exotic island retreat, with ancient heritage landmarks, its vast active volcanoes, and its Elvis Presley lore. But now, they are not just considering legalizing sports betting, but also eyeing up land for a casino.

Hawaii’s Road to Legalized Sports Betting

Hawaii came very close to passing House Bill 1308 last year, gaining approval from the House and Senate before it fell apart in a conference committee. Legal betting was not the question; all parties gave it the green light, but they couldn’t agree on a taxing, licensing fee and regulatory structure for Hawaii’s sports betting market. The bill would have seen Hawaii grant at least 4 sportsbook licenses.

The sentiment has not changed in 2026, and now lawmakers have brought two more bills, Senate Bill 3303 and House Bill 2570 in late January, in a bid to open the talks again. To add fuel to the fire, Governor Josh Green has publicly announced that he would not oppose a sports betting bill, if it is approved in government and lands on his desk. The committee hearings, which still haven’t been scheduled yet, will analyze these bills and see whether they have patched up some of the issues regarding taxation and licensure structures. For sports bettors in Hawaii, these are extremely positive signs.

Sports Betting Legislation

The problem with House Bill 1308 is that lawmakers could not agree on a gross gaming tax of 10% on operators – with social responsibility levies of 7% for problem gambling prevention and a further 7% for educational programs. The new structure has to satisfy all parties, and we already have a brief glimpse of how it could shape up.

The companion bills this year would increase the number of sportsbook licenses from 4 to 6, and would set the license fees at $500,000 for the first 5 years. On top of that, sportsbook operators would have to pay 15% in sports betting taxes, and they cannot allow college betting on Hawaii-based varsity teams and youth clubs. These are all fair demands, and by increasing the number of licenses, Hawaii would be launching a pretty competitive market. It would have enough options to satisfy most bettors, and not restrict them to 1 or 2 options, effectively giving the state a gambling monopoly like Rhode Island.

As a state with no tribal casinos, there is no question of limiting the licenses to tethered partnerships or giving the tribal communities the monopoly on sports betting. This is a pretty widespread issue across the rest of the states, with some jurisdictions limiting the action to tribes alone. Hawaii doesn’t have these issues to worry about, and by starting with 6 licenses, you can bank on all the usual suspects lining up to enter the market. We are, of course, referring to the likes of DraftKings, Fanatics, FanDuel, Caesars and BetMGM, who are among the most prominent mobile betting platforms in the US.

Though the legalization is not without limits. There is also a bill aiming at banning gambling near the Aloha Stadium District, strictly prohibitting any gambling facilities or services from being near the development.

Prediction Markets Attacked

Hawaii only has a population of over 1.4 million, putting it among the top 45 most populous US states, so it doesn’t have a massive domestic market. But Hawaii represents a great opportunity for sportsbook operators. It attracts a good 9-10 million US tourists per year, and the Hawaiian market is completely untapped potential. It has no legal gambling channels – no online casinos, poker rooms, bingo sites, or DFS platforms. Right now, all the betting traffic in Hawaii is channeled in offshore and unregulated betting sites.

Sportsbooks will also take note of House Bill 2198, introduced by Rep Scot Matayoshi, which would ban prediction markets from the islands. Prediction markets are federally regulated, and thus they are (by default) legal in all 50 states. However, with the rise of prediction markets sports bets, and the huge public hype around them, these platforms have become associated with sports betting. And many states have pushed back on leaders like Kalshi, opening lawsuits to mitigate the betting products that they offer.

Hawaii is among them, and if the bill is passed, these alternative betting products will be blocked out of the state.

Gambling on Cruise Ships and Hawaiian Casino

The current proposals would have sports betting in, prediction markets out, and it doesn’t stop there either. Because House Bill 1945 is also on the table, and this legislation would allow gambling cruise ships to enter Hawaiian waters. Trans pacific cruise lines such as those with Princess, Royal Caribbean, Carnival Cruise Line 14 or Celebrity Cruises could all look to benefit should the legislation pass. Though even if it does, the first gambling cruise ships would only be allowed near the vicinity of Hawaii from 2027 onwards.

Gaming Authority and Casino Resort

Another interesting addition is HB 222, which would establish a Hawaii Gaming Control Commission and authorize one landbased casino for Honolulu. The action would be limited to just one casino, which will go through a bidding phase, and the winning applicant would pay a $1 million application fee plus $5,000 in annual license fees. But that license would be for 20 years, and the proposed casino would be allowed to have slots and table games. The table games would be taxed at a 15% rate, and all other casino games would be taxed at 20%.

The fact that there are so many different bills in the pipeline for Hawaii shows serious intent on behalf of the lawmakers. The fact that interest is building about a potential casino resort, sports betting market with at least 6 books, and even forming a gambling authority are things that would usually be implemented one by one, over the course of a few years. The only thing missing from this wave of gambling bills is online casinos.

How This Affects the Spread of Sports Betting

Hawaii’s potential venture into sports betting is an important milestone for legalized gambling in the US. It was famously one of the key anti-gambling states, forbidding practically all forms of gambling, betting, and real money games of chance. The fact that even DFS platforms were shut out shows just how conservative the lawmakers’ views were towards gambling. Now, the very people in charge have bounced ideas for betting bills for the past year, and if they can find the right terms and conditions, the Governor has his pen ready.

It is not really a question of if at this point, but when Hawaii will go through with the betting bill. If they do it this year, they may well become the 40th state to legalize sports betting, after Missouri became the 39th in December of last year. That is, unless another state beats them to the punch. Proposing to outlaw prediction markets would also be a very controversial statement. Right now, prediction markets are not banned in any state, but Massachusetts and Nevada have filed suits against major platforms, and 9 other states have sent cease and desist letters to demand that prediction markets drop their sports betting products.

Legal Online Casinos On the Rise Too

The tide also seems to be heading towards more online casino states too. More states are banning sweepstakes casinos, and just a few weeks ago the Governor of Maine signed a bill legalizing online casinos. Virginia seems on track to follow suit, and a handful of others are contemplating the big leap. Sweepstakes casinos and prediction markets out – online casinos and sportsbooks in – if the trajectory continues, it looks like America will reset its entire online gambling sector and bring back the conventional gaming and betting platforms.