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Hawaii Sports Betting Bill with Record 55% Tax Passes First Reading
By Jeff Osienya Feb 13, 2022 LegalityAs one of the only two US states with no speck of gambling in the country, Hawaii is now fighting for a slice of the pie. A new mobile sports betting regulation bill has passed the first reading in the state legislature.A few days ago, the entire country was locked in when the Cincinnati Bengals were taking on the LA Rams in the 51st edition of the highly anticipated Super Bowl. As tens of millions of viewers in America relished this sporting spectacle, millions of fans also enjoyed betting on the event. The American Gaming Association had even previously predicted that a record 31 million Americans would wager a whopping $7.61 billion on the Super Bowl LVI.
Well, someone in The Aloha State took notice of the windfall generated for state coffers from the US sports betting scene and filed a bill seeking to capitalize on the action that the state has been missing out on. US Rep Mizuno from Hawaii filed House Bill 1815 that sought to legalize mobile betting in Hawaii. The bill has so far done well, as it passed its first reading, and there are hopes that it can get through the Committee of Economic Development.
In a recent interview with local media house KHON 2, Rep Mizuno commented about offshore betting on this year’s Super Bowl showdown, saying:
Quote“You are going to see millions of dollars wagered on this game, and tens of thousands of people from Hawaii or local residents will be gambling on illegal websites that are offshore. I will bet you or a friend or family member is betting on the Super Bowl.”
Gambling Regulation Would Pump More Funds into Hawaii’s Economy
According to the US Rep Mizuno, there is a lot that the state will gain from mobile sports betting. For starters, it would open up a whole new industry that Hawaii has never experienced yet.
Thinking of New York, for example, the state is breaking records upon records for both the wagered handle and revenue streams generated from mobile betting. Within 30 days of launch, New Yorkers have spent over $2 billion on mobile wagers, and the action has generated more than $70 million for state coffers in taxes. Nonetheless, even though Hawaii might not necessarily match The Empire State’s potential, it will certainly reap handsomely from in-state regulated sports betting. During his media appearance, Rep Mizuno added that:
Quote“New York just passed theirs. They have a ton of taxes on it, but it’s gonna go to a lot of good social programs. Capture some of the tax revenue — which could go for a lot of good things like Hawaiian Homelands, affordable housing, and education for kids.”
As we speak, Hawaii and Utah are the two states in the country that are yet to legalize any form of gambling, let alone mobile sports betting. Moreover, right now, 34 jurisdictions (33 states and Washington DC) across the country have legalized some form of sports betting, with 31 of them already operational. And so, it is now more imperative than ever that Hawaii makes a move to catch up by legalizing sports betting.
The Highest Taxation Ration in the USA So Far
There have, however, been a couple of grave concerns raised regarding the proposals presented by Mr. Mizuno. For one, even though there are many vital details to be looked at, it would be wise to start with the elephant in the room – a whopping 55% tax levy! While this is the highest taxation rate in the country, the reasoning behind this by Rep Mizuno is that the 55% tax will serve to sway most legislators into voting the bill in during legislative sessions.
Should this proposal see the day of light, it would even shadow New York’s 51%, which caused a lot of controversies before the measure was finally passed into law. But then, there’s a huge difference with New York’s clause as the Hawaii measure proposes that sports bettors be the ones to be taxed, not the bookmakers. It specifically targets the player’s winnings which is a lucrative side many have not yet delved in.
Rep Mizuno has also outlined additional plans for how the betting will be inducted into the state. He proposes that:
- Part of the revenue collected from sports betting be channeled towards programs aimed to help persons addicted to gambling
- A commission should be formed to act as a watchdog over the gambling activities in Hawaii. Should Hawaii residents face a problem in the state’s gambling scene, this commission will be mandated to help them. The gaming commission will fall under the Department of Business, Economic Development, and Tourism.
- The state imposes licensing fees for any sportsbook or casino operating within the borders of Hawaii
- There be a special fund created specifically for the revenue collected from gambling
Prospective Implications of the 55% Rule
Should the 55%rule stand, a couple of ill-fated things could happen. One of the biggest concerns is that state residents e may steer clear of betting within Hawaii due to the high tax imposed on their payouts should they win. Also, the bookmakers and casinos may be wary of Hawaii as their customer base may not be as high as they are probably used to in other states, given the high taxation.
Well, whatever the case, Hawaii still has some catching up to do with the rest of the country. Thankfully, visionaries like Rep Mizuno will likely successfully steer The Aloha State into a more gambling-friendly future. He is also behind House Bill 1820, a casino gambling regulation measure seeking to construct one casino in Waikiki.
While Mizuno may have overplayed his hand with the 55% tax clause for sports betting wins, it is great to see that the conversation about legalizing gambling in this beautiful state has started. Although many doubt the bill’s eventual success in the legislature, it may still come into existence by July should it pass through all the hurdles. Nonetheless, we remain optimistic that sports betting is surely coming to Hawaii. Exactly when is the key question.
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