Hawaii may be ready to say ‘aloha’ to legal sports betting By Howard Stutz, Executive Editor, CDC Gaming Reports February 4, 2020 at 7:27 pm Legislatures in 14 states are considering proposals to legalize sports betting this year. That’s not surprising; fourteen other states currently offer regulated sports betting, and six more states, along with Washington D.C., have approved sports betting laws and are expected to launch sometime in 2020. More than $17 billion has been legally wagered on sports in the U.S. during the 20 months after the Supreme Court shredded the Professional and Amateur Sports Protection Act. Now, it’s beginning to look like Hawaii wants its piece of the action. Yes, Hawaii, which, along with Utah, is one of only two U.S. states that does not currently offer any form of legalized gambling – casinos, racetracks, even a state lottery. The state doesn’t have a professional sports franchise, either (anyone remember the Honolulu Hawaiians of the World Football League in the mid-1970s?) A pair of bills recently introduced in the Hawaii Senate, however, look to use tax revenues from legal gambling to pay for various state services. The measures would create a Hawaii Lottery and Gaming Corp. to oversee the activity. Passage is a longshot, but with the fever pitch that legal sports gambling has experienced since May 2018, nothing can be taken for granted. Although former Nevada gaming attorney Anthony Cabot, who is now the Distinguished Fellow in Gaming Law at UNLV’s Boyd School of Law, might disagree. “In the near term, I would be very surprised if the bill legalizing regulated gaming was passed and signed into law under (current) economic conditions,” Cabot said. “Typically, an external driver motivates legalization. None of the obvious factors exist.” Cabot said Hawaii’s tourism industry is robust, “so increased tourism, state tax revenue generation or employment creation will probably not play major factors.” And, unlike the mainland, “Hawaii does not experience revenue bleeding by its residents taking advantage of convenience gambling in adjacent states.” California Hotel Casino is Hawaiian-themed with a customer base that often reaches 90% Hawaiian on busy weekends/Shutterstock But proponents do have something in their corner. Hawaiians love to gamble. That’s one reason Las Vegas is often referred to as the “ninth island.” An estimated 50,000 Hawaiians reside in Southern Nevada. Another 20,000 native Hawaiians live in Southern California. If they want to meet up, downtown Las Vegas – particularly the three resorts operated by Boyd Gaming Corp. – is the place to be seen. Hawaii is a major feeder market for downtown visitation; Boyd charters airline service between the islands and Las Vegas. Meanwhile, the company’s California Hotel Casino is Hawaiian-themed, with a customer base that often reaches 90% Hawaiian on busy weekends. Boyd Gaming quantified its Hawaiian business in its 2019 10-K filing with the Securities and Exchange Commission. During 2018, customers from the islands accounted for 68% of total room nights at the California, 38% percent of the room nights at the Fremont, and 44% of the occupied rooms at Main Street Station. “Our downtown operations are benefiting from the ongoing strength in our Hawaiian customer segments as well as accelerating growth in visitation throughout the downtown market,” Boyd CEO Keith Smith said on his company’s most recent quarterly conference call. Still, a push to legalize sports betting in Hawaii seems odd, although Tennessee, which doesn’t have casinos but has operated a lottery since 2004, hopes to launch sports betting this year though a mobile/online gaming product. The idea has supporters. “After seeing the success of other states with legal sports betting, it is no surprise even those states without gaming are interested in getting involved in the action,” said sports gaming consultant Sara Slane, who advises professional sports leagues, media and other businesses on the activity. I wondered what longtime gaming industry executive Gavin Isaacs thought of the prospects of legal sports betting in Hawaii. He owns a condo in the state and visits quite often. Isaacs, who has been the CEO of two major gaming equipment providers and a top executive with two slot machine companies, is currently chairman of SBTech, a sports betting technology company. SBTech is being acquired by DraftKings as part of the sports betting operator’s reverse merger with Diamond Eagle Acquisition. Isaacs expects to join DraftKings’ newly-created board of directors when the company goes public. “I really hope so,” Isaacs said about Hawaiian sports betting legalization. “There are already enough illegal sites, so why not regulate it for the benefit of all.” Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.