On January 25th, House Bill 2422 was introduced in the state legislature of Hawaii. The purpose of HB 2422 is to create a “Hawaii internet lottery and gaming corporation,” which would be authorized to offer “games of chance and games of skill, including lottery, poker, and casino games” on the internet only.
The Hawaii internet lottery and gaming corporation would “not be deemed a state agency” but rather an “instrumentality of the state.” It would be a public corporation subject to the corporate laws of Hawaii, but it would also have clearly enumerated regulatory responsibilities. A seven-member board of directors would be appointed by the governor, the president of the state senate, and the speaker of the state house of representatives.
The Hawaii Internet lottery and gaming corporation would enter into an agreement with a private company to conduct the operation of internet gambling games, and the chosen company would effectively receive a monopoly on the in-state market.
The Hawaii internet lottery and gaming corporation would select its operating provider through a bidding process, and no company would be eligible to become the operating provider if it has ever accepted internet gambling wagers from Americans.
Initially, the chosen operator would not have the ability to offer real money wagers to customers located outside of Hawaii. However, the bill envisions that the Hawaii Internet lottery and gaming corporation should have authority to “enter into agreements with other state gaming entities for the offering of multistate games, consistent with state and federal law.”
Even in the absence of such agreements it would be permissible for the chosen operator to offer free-play games to individuals located outside the state, and in this regard the Hawaii internet lottery and gaming corporation would be authorized to “conduct no more than two land-based gaming entertainment events annually, related to the corporation’s internet game offerings, for the purpose of attracting tourists to Hawaii; provided that the corporation shall not have the authority to conduct any other form of land-based gambling.”
HB 2422 is significant not only because it makes Hawaii one of the first states to propose regulations for internet gambling, but also because Hawaii has never had any forms of legalized gambling– not even a lottery.
Separately another bill, HB 2316, has been introduced into Hawaii’s legislature which would establish a “Hawaii state lottery commission.” However, HB 2316 would permit the commission to operate only land-based games and not internet games.
House Speaker Emeritus Joseph Souki is a co-sponsor of both HB 2422 and HB 2316, as are Representatives Faye Hanohano and Angus McKelvey.
HB 2422 is pending in the House Committees for Economic Revitalization and Business, for the Judiciary, and for Finance. Meanwhile HB 2316 is pending in the House Committees for Education, for the Judiciary, and for Finance. Representative McKelvey, who co-sponsors both bills, is chairman of the House Committee for Revitalization and Business.