Hawaii Senate Bill 677 Proposes the Legalization of Online Casinos, Poker Sites, and Lottery Tickets

Last updated on November 2nd, 2018

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Hawaii is the latest US state which is considering the legalization of online poker and other forms of Internet gambling. In Hawaiian Senate Bill 677 (SB 667), State Sen. Will Espero wants to legalize online casinos, poker sites, and lottery ticket sales.

If Sen. Espero’s bill is passed, Hawaii will end its long antipathy to gambling of any kind. Similar attempts have been made in recent years, but none of those online gambling bills passed through the legislature. Along with Utah, Hawaii is one of only two states which has a 100% ban on gambling of all kinds.

Online sports betting would be banned under SB 667. Because of the 1961 Wire Act and the 1992 PASPA law, sports betting of any kind is illegal in the United States — outside of Nevada, Delaware, Montana, and Oregon.

Hawaii Internet Lottery and Gaming Corporation

Espero’s 29-page bill proposes the formation of the Hawaii Internet Lottery and Gaming Corporation. This organization would regulate gaming activities in the state, while assuring that consumers are protected from the various dangers posed by online gambling.

Consumer protections are a major factor in Senate Bill 667. In the current unregulated gaming environment, tens of thousands of Hawaiians gamble each month on sites with no fraud protection. Offshore operators also tend to offer worse odds, so the gambler faces a much harder chance of winning.

Unregulated vs. Regulated Online Gambling

Even if a player wins, many offshore gaming operators have one-sided terms and conditions which allow them to void winnings with very little notification. Some sites slow-pay winnings, hoping the gambler choose to reverse their withdrawal request and continue gambling. The motto of casino owners is to keep players playing, because the house always wins.

Not all online casino operators are bad. The Internet has many player review sites which aggregate information on sites. Word-of-mouth travels far on the Internet, so legitimate online casinos and poker sites offer fair terms, prompt payments, and published odds. That does nothing for unknowing gamblers, which is why Will Espero champions consumer protections.

Problem gambling protections are another improvement the Hawaiian online gambling bill offers. Regulated gaming sites usually are required to offer self-exclusion lists and panic buttons that allow players to exclude themselves from gaming for a certain time. They also are required to link to problem gambling helplines and treatment centers, so those with issues can receive treatment.

Tax Revenues and Public Funding

The bill calls for online casinos and card rooms to pay taxes to the Hawaiian state government, though a tax rate has not been determined yet. Money from online gaming revenues will fund the education system and other social programs. To be eligible to gamlbers, players must be 18 or older.

Hawaii plans to negotiate shared liquitity agreements with other US states. Nevada and Delaware have an interstate poker compact. That compact allows other states to join the agreement simply by agreeing to the terms of the compact. New Jersey has no bilateral or multistate agreements, though it has discussed sharing player pools with Nevada and the United Kingdom. New York state also is discussing an online poker bill, so shared player liquidity with New York State’s 20 million residents also might be possible.

Shared Player Liquidity

In online poker, player liquidity is a key to having a successful product. Unlike online casinos, poker is a social game. Each table has 9 or 10 real life players, depending on the rules. It is best to have table filled to make the game attractive to players.

Also, poker has a variety of variant rules: Texas Hold’em, Omaha, and Seven-Card Stud are only the most popular versions. Then players want a variety of betting rules: No-Limit, Pot-Limit, and Limit games. Different players enjoy specific tournament rules, such as freezeouts, rebuys, and add-ons. Then events have to be scheduled for various lengths, from the turbo events and sit-n-go events to the full Sunday or weekend tournament events with guaranteed prize pools. To increase prize pools, such tournaments need many thousands of players to pay entry fees.

Online Poker Ring Games

Those options just describe tournaments. Many players prefer to gamble in cash games, known sometimes as “ring games” in online poker, in which they can cash out on any hand and go back to their real life.

With all those player preferences to fulfill, a successful online poker site need thousands upon thousands of players — and they need them 24/7 to make it truly profitable. For a smaller state like Hawaii, it needs to sign a shared player liquidity compact with other states. That assures big prizes, which assures more participation.