Two poker-legalizing measures introduced in Hawaii

Haley Hintze
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Posted on: January 26, 2023 5:13 pm EST

The state legislature of one of the U.S. states with virtually no legalized forms of gambling, Hawaii, will have the chance to consider at least two bills that would legalize poker during its 2023 session. Both new measures have been introduced in the past week and have been assigned to initial clearing-house committees, though neither has been scheduled as yet for official hearings.

The measures take markedly different approaches to bringing some form of legalized poker to Hawaii. In the state’s senate, SB 1107, as introduced by State Sens. Gilbert S.C. Keith-Agaran and Angus L.K. McKelvey is on the table. Poker, specifically including online poker, would be legalized as a ride-along in a measure largely devoted in legalizing lottery sales in the Rainbow State. Hawaii is one of only five U.S. states where state-run and/or multi-state lotteries are not available, and lottery-legalizing measures have been proposed for years.

Meanwhile, in the Hawaii House, State Reps. John Mizuno and Daniel Holt have introduced HB 918, which would create a tourist-only live-gambling facility somewhere near Honolulu that would offer poker and sports betting. The Mizuno/Holt measure is designed to curry favor with legislators who have long fought against the social ills associated with gambling by promoting this as a tourism-gambling bill, even requiring gamblers to stay at a “transient accommodation, such as a hotel,” on the island of Oahu, in conjunction with a visit to the gambling facility. The restrictions are designed to place hurdles in front of many locals and would-be gamblers.

Both measures would call for the creation of a state gaming commission to oversee the legalized gambling activities. Such an entity in Hawaii does not yet exist.

SB 1107 ties poker to lottery hopes

Allowing Hawaiians to participate in various lottery offerings is a strong sales point on behalf of Keith-Agaran’s and McKelvey’s Senate Bill 1107. For decades, Hawaii’s dedication to its tourism-based economy and its desire to promote itself as a family-friendly destination have worked against lotteries being approved in the state. It’s not that Hawaiians in general are against gambling; several thousand underground and unregulated gambling dens reputedly are in existence or have existed on the state’s islands through the years.

Yet Hawaiians don’t even have the ready option of visiting neighboring states for a lottery fix. There are four other no-lottery U.S. states — Alabama, Alaska, Nevada, and Utah. In Nevada, Alabama, and Utah, most of the states’ residents live within a couple of hours’ drive to a lottery outlet in a neighboring state. Three of those other four states are also quite conservative and anti-gambling in general, while the fourth, Nevada, has no lottery at the behest of the state’s powerful casino-entertainment industry.

Poker’s ride-along within SB 1107 is primarily focused on online play, including the ability to pool what would be a relatively small player base with regulated offerings in other states. Except for a requirement to be at least age 18 to play, the bill offers few specifics related to poker. The heart of poker’s inclusion within the bill reads as follows:

(b) The corporation [referring to a Hawaii gaming commission] may:
(l) Offer wagering on games of chance and games of skill, including lottery, poker, and casino games, to individuals over theage of eighteen years; provided that the corporation shall not offer wagering on any sporting event or sporting contest;
(2) Enter into agreements with other state gaming entities for the offering of multistate games,consistent with state and federal law;…

Sports-betting legalization is to be treated as a separate matter and has been introduced in a companion bill, SB 1108.

House bill would create live-gambling venue for tourists

While SB 1107 is a legalization measure drafted among traditional lines, the same can’t be said for Keith-Mizuno’s and Holt’s HB 918. Contents of a draft version of the bill made some Hawaiian news reports in December, though the bill as submitted varies in some ways from what was reported earlier. What is now HB 918 was originally conceived as a plan to license numerous small poker rooms and betting parlors throughout the Islands, catering to tourists and locals alike. Instead, the submitted version morphed to a bill authorizing the creation of a single, tourism-protecting larger venue, adjacent to a hotel, with lodging requirements designed to deter live gambling by most Hawaiians.

HB 918 uses indirect language in defining how and where such a sports-betting-and-poker facility is to be located. The bill’s description gives away the intent, however:

Authorizes a 10-year license for 1 poker and sportsbook gaming facility in a special district designated for tourism in a county with over 500,000 residents that is not in a hotel. Allows admission for individuals 21 years of age or older who register to stay at a hotel on Oahu and pay an annual fee. Establishes the Hawaiʻi gaming control commission. Imposes wagering tax on gross receipts. Creates the state gaming fund and compulsive gambler program.

The only county in Hawaii with a population over 500,000 is Honolulu County, which includes the entire island of Oahu and the city of Honolulu itself. Such a gambling venue could technically be built anywhere on the island, but it would necessarily be near an existing or newly built hotel of some size, limiting the venue to being in or near Honolulu or near just a handful of other smaller cities on the island.

The poker as proposed in HB 918 includes a quirk or two as well. The measure calls for the venue to have not more than 30 tables, each with no more than nine players and a dealer, and the cash-game action would likely include any “poker” variant but would be capped at a $1,500 maximum per pot. Such capped-pot action exists in other states, such as Montana, but can cause delays in calculating each player’s contribution when a hand reaches the cap amount.

Besides mandating a stay at the neighboring hotel, HB 918 would also make each would-be poker player or sports bettor pay an annual fee in order to place wagers inside the venue. The bill also creates an age-21 minimum, in contrast to the age-18 minimum in the competing Senate bill.

In an interview with a local news outlet earlier this month, Rep. Mizuno said that the impetus behind the bill also included a desire to keep Hawaiians’ money inside the state, especially high-dollar Hawaiian sports bettors, who are estimated to spend a collective billion dollars annually traveling to and wagering in Las Vegas. “The reason we are concerned about DraftKings, FanDuel is we don’t want a mainland corporation coming in and just taking all the money,” Mizuno stated.

Mizuno’s plans may also include a closet-rattling skeleton of sorts. An early-January feature on the planned measure by Hawaii News Now included the disclosure that Mizuno would introduce Rise Hawaii Gaming’s Jon Ford as his gambling expert. Ford, as reported, is also involved with the Full House Poker cardroom in Eugene, Oregon. However, according to Hawaii News Now, Ford and another Rise Hawaii Gaming exec, Kendale Limahai, previously owned and operated an illegal gambling operation in Kona. In 2013, Ford was sentenced to 20 months for masterminding the illegal gambling operation. Ford also told Hawaii News Now that provisions in what would later be submitted as HB 918 would allow convicted felons to run the poker “parlours,” but not “tax evaders or Mainlanders.”