Hawaii is home to some of the strictest gambling laws in the United States. The state has no land-based casinos, poker rooms, bingo halls, racing tracks or even a lottery. Nearly everything is illegal here except for fantasy sports and certain forms of “social gambling” in which the house takes no profit either directly or indirectly through fees, food sales, entertainment charges, etc.
It is considered a crime to participate in gambling as a player as well. §712-1223 of the State Statute considers it a misdemeanor offense for a person to knowingly participate in any gambling activity. The punishment for a misdemeanor in the state is up to a year in jail and a fine of up to $2,000.
Hawaii law defines gambling as follows:
“A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome.”
A careful reading of this definition could lead to the conclusion that poker is not considered gambling. However, the state does severely restrict poker and treats it the same as any other form of gambling. The question has never been taken to court but considering Hawaii’s strong stance against all forms of wagering, it would probably be best not to test your luck in front of a judge.
Online betting is similarly restricted in the Aloha State. It is illegal for anyone to accept wagers or host poker games over the internet for residents. The one and only form of online wagering legal in Hawaii is fantasy sports betting. Let’s start with a discussion of that and then talk in more detail about the future for online gambling and poker in Hawaii.
Fantasy Sports Betting
Hawaii had legal fantasy sports for a while, but local prosecutors changed all that in 2016. They released an opinion that fantasy sports sites violate state gambling laws and issued cease-and-desist orders to the major fantasy sites operating at that time. FanDuel and DraftKings subsequently left the state. This outcome was not that big a surprise given Hawaii’s complete ban on anything that even smells like gambling.
Prior to 2006, Hawaii restricted fantasy sports betting to “social” leagues in which no player received anything of value other than his personal winnings. Organizers of leagues were prohibited from taking a profit or otherwise charging people to participate; 100% of what was paid in had to be returned to winners in the forms of prizes.
This all changed with the passage of the federal Unlawful Internet Gambling Enforcement Act of 2006 (the UIGEA). The UIGEA included a carve-out for real money fantasy sports, calling them a contest of skill and legal at the federal level. Online fantasy sports by default became legal (although that was up for debate, as we will soon see) in Hawaii in 2006.
Outside of Hawaii, A handful of fantasy sports sites are now doing business across the United States and are seeing massive numbers of new users. Some of the largest sites regularly host week-long fantasy contests with thousands of players and millions of dollars’ worth of prizes. The two largest sites that accept customers from Hawaii are FanDuel and DraftKings.
These are the two best sites in terms of reputation, quality of games and prizes. At each site, you can play in heads-up contests, small leagues with just a few players or large tournaments with thousands of other people. Each one hosts fantasy contests for professional football, baseball, basketball, hockey, college football and college basketball.
Legalizing Online Poker and Casinos
There is currently little chance that Hawaii will change its stance on land-based or online gaming. The closest we came to changing the situation were bills proposed in 2013 and again in 2017. The 2013 bill never got traction and the 2017 bill looks equally unlikely to go very far.
The 2013 effort would have established the “Hawaii Internet Lottery and Gaming Corporation” to conduct, regulate and license online gambling within the state. SB 768 presented a solid case for legalizing online gaming in the state with the following text in its introductory paragraphs:
“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. To protect Hawaii residents who gamble on the Internet, and to capture revenues generated from internet gambling in Hawaii, it is in the best interest of the State and its citizens to regulate this existing activity by authorizing and implementing a secure, responsible, and legal system for internet gambling.”
The bill never gained much support but it did hang around in the Senate for most of 2013. The last update posted on the Hawaii State Legislature website has the bill listed as “carried over to 2014 Regular Season.” That bill’s status remains unchanged years later.
A 2017 bill introduced by Senate Vice President Michelle Kidani on behalf of Senator Will Espero sought to renew the online gambling debate in Hawaii. Senate Bill 677 seeks to legalize online gambling, establish the Hawaii Internet Lottery and Gaming Corporation and permit at least one authorized operator to hold online gambling games in Hawaii. The odds of this bill ever making it into law are exceedingly low, however, due to Hawaii’s long anti-gambling history.
It’s possible online poker or gambling will make a third run in Hawaii at some point. The state does have a long anti-gambling history, but at least some lawmakers have shown interest in getting a piece of the tax revenue they know they’re missing out on with people visiting offshore poker sites and casinos.