Tax rate, fees, regulator at issue as Hawaii sports betting bill goes to conference

Hawaii’s digital sports betting bill has hit a snag. HB 1308, which has made a surprising march through the house and senate, is headed to conference committee after the house rejected an amended version passed by the senate on Friday.

After moving through senate committees with no tax rate or application fee, both were added on the senate floor. In addition, the regulator was changed in a senate committee and the department of law is now named.

HB 1308 would allow for statewide digital sports betting with a minimum of four platforms. There would be no retail locations.

The bill initially had a 10% tax rate and a $250,000 application fee, but those were stripped in the house finance committee, where Representative Sue L Keohokapu-Lee Loy voiced concern that the application fee was too low.

It “appears rather low for an industry that makes billions of dollars”, she said. “I would love to see that licence fee go up exponentially.”

Tax revenue projection off?

There was also much discussion in the finance committee about the tax rate. BetMGM head of government affairs Jeremy Limun suggested that tax revenue for Hawaii (population: 1.45 million) would range from $10 million-$20 million per year based on a 10% tax rate. Compared to states of a similar size, that projected tax revenue is high and the tax rate, at least per current trends, is low.

While digital sports betting operators would embrace a 10% tax rate, the move of late has been higher rates to start as well as states proposing to raise their rates in the months and years after launch.

Hawaii’s legislative session is set to adjourn on 2 May.

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