Hawaii Online Sports Betting Bill Would Set Highest Tax Rate In Country

• A recently introduced Hawaii sports betting bill would set a 55% tax rate on sports betting
• The tax rate would be the highest in the country
• A separate bill was also introduced for a standalone casino in the state

Hawaii online sports betting is moving forward into potentially the highest sports betting tax rate in the entire country.

A recently introduced bill, HB 1815, would legalize online sports betting in the state and set the tax rate at a whopping 55% on sportsbook entities, the highest in the country ahead of New York and New Hampshire’s 51% rate.

Initial Hawaii Sports Betting Tax Rate Confusion

State Rep. John Mizuno, the vice speaker of the House, introduced HB 1815 to legalize online sports betting and HB 1820, which would legalize gambling in the state and allow for a single standalone casino in Waikiki.

There was some initial confusion in the language of HB 1815, which originally reads as the state taxing the consumer 55% on their winnings instead of the sportsbook. An automatic tax on all winnings to consumers would be a radically different approach to sports betting taxes than any other state has taken so far.

“There shall be levied, assessed, and collected a tax of fifty-five per cent on all winnings paid out to any person by a sports wagering provider. The tax revenues shall be deposited into the sports wagering special fund.”

Hawaii has a new sports betting legalization bill. Apparently they've seen the worst bills floated around and said "Hold my Mai Tai"…

They're proposing a 55% tax on CONSUMERS.

Win $100, get paid $45. Mahalo? Try Mahellno. https://t.co/DrmGY8b0ZX

— Captain Jack Andrews (@capjack2000) January 24, 2022

It has since been clarified that the bill will actually tax the sportsbook entities, not the consumer, if it is approved.

Mizuno’s bill will also create a Hawaii online sports wagering corporation to conduct and regulate sports wagering. The corporation will be able to offer sports wagering on sporting events for those citizens 18 years of age or older.

HB 1820, which would allow for one standalone retail casino, would help to reinvigorate Waikiki and its waning nightlife opportunities. The bill notes that online sports betting and digital gaming opportunities don’t offer the same economic benefits as a brick-and-mortar facility.

“The legislature finds that a single casino in Waikiki will not only provide tourists with memorable nighttime activities but will also stimulate the economy by creating hundreds of jobs and generating millions of dollars in revenue for the State. By comparison, other forms of gambling, such as lotteries, internet gambling, and non-casino electronic gambling, create few quality jobs and do not generate significant economic development in the State. Polls have shown that more than seventy per cent of Japanese, Chinese, and Korean visitors approve of a casino in Waikiki,” the bill reads.

Separate Hawaii Sports Betting Bill Also Introduced

Hawaii State Rep. Chris Todd also reintroduced his own sports betting bill, HB 736, which he initially proposed in 2021. Todd’s bill proposes an online sports betting pilot program, which if approved, would run through June 30, 2025.

The pilot program will legalize online sports betting in the state. The Hawaii department of business, economic development, and tourism issuing no more than five online sports betting licenses. The proposed fee is $30 million per license.

After June 30, 2025, the legal definition of gambling in the state would include online sports betting.