Hawaii Lawmakers Reopen Gambling Debate With New Bills and Working Group as Underground Market Persists

New Legislative Proposals in 2026

This week, lawmakers filed multiple bills, with some pending introduction.

HB 2222 — Casino Gaming Framework

HB 2222 would authorize one casino in Honolulu and establish a Hawaii Gaming Control Commission to oversee licensing, regulation, and taxation of casino operations.

Applicants would have to pay a $1 million nonrefundable application fee and $5,000 annual license fee. The license would be for 20 years. The casino would have slots and table games. Theble games will be taxed at 15% and all other games at 20%.

The bill also calls for the creation of a State Gaming Fund and compulsive gambling prevention and treatment requirements.

HB 2198 — Defining Prediction Markets as Illegal Gambling

With the rise of prediction markets, Hawaii joins several other states, including New York, in considering legislation that would effectively prohibit platforms like Kalshi and Polymarket.

HB 2198 would update Hawaii’s legal definition of “gambling” to explicitly cover prediction markets.

HB 1945 — Cruise Ship Gaming

Another measure, HB 1945, would allow regulated gaming on cruise ships within Hawaii waters starting in 2027. Cruise ship gambling will be subject to taxation on adjusted gross receipts and reporting requirements for the Department of Commerce and Consumer Affairs.

Proponents see such gaming as an incremental entry point for legalized wagering in Hawaii.

Carryover Measures: Sports Betting and Casino Plans

Some gambling-related bills, including a failed sports betting measure, have carried over into 2026.

HB 1308 — Sports Betting Revisited

The most high-profile carryover is HB 1308, a bill to legalize sports betting. In 2025, it advanced further than any prior gambling measure and gathered support in both chambers before negotiations broke down over tax structure and regulatory details.

Its return this year gives lawmakers another opportunity to resolve those issues. However, last year’s progress does not guarantee comparable results in 2026. Other similar late-stage efforts — including gambling expansion in Alabama and skill-game regulation in Virginia — have failed to advance in subsequent sessions.

SB 893 — Aloha Stadium Casino Proposal

SB 893 would allow legalized casino gaming in the redevelopment of the New Aloha Stadium Entertainment District and the Hawaii Convention Center. Some of the bill’s provisions are similar to HB 2222.

That includes a $1 million nonrefundable application fee, $5,000 annual license fee, and 20-year licenses. The bill would also create a state gaming commission.

Notably, a new 2026 bill, SB 1527, aims to prohibit gambling in the New Aloha Stadium district.

HB 1434 and SB 1507 — Lottery and Gaming Corporation

Two additional companion bills are carrying over: HB 1434 and SB 1507. They seek to create a Hawaii Lottery and Gaming Corporation to conduct and regulate wagering and gaming in the state.

Gaming activities under the corporation’s oversight would include online and in-state games of chance and skill — such as lottery, poker, and other games — with participants aged 18 and older.

The bill sets out a governance structure, powers and duties of a board of directors, procurement and vendor rules, responsible gambling measures, and a special fund for gaming revenues.

Working Group Examines Legalization Options as Illegal Gambling Market Grows

In addition to bill drafting, the Legislature has established a 24-member Tourism and Gaming Working Group to study the potential legalization of gambling in Hawaii, including costs, benefits, and regulatory options.

The panel includes lawmakers, law enforcement officials, tourism leaders, academics, and gaming industry representatives. The group’s charge is to examine the multiple legalization concepts.

That includes gaming on cruise ships and gambling in the New Aloha Stadium district, as well as the regulatory structures that may be needed if any of those ideas advance.

The group will also examine models from other states and assess their social and economic implications. It must report findings to the Legislature by the end of the year.

During the group’s first meeting, the scale of illegal gambling occurring in the state took center stage.

Mike Lambert, director of the state Department of Law Enforcement and member of the group, told fellow members that about $700 million to $800 million a year flows through illegal gambling activity. This mainly includes illegal game rooms where drug dealing, armed robberies, and other criminal activity occur.

Honolulu Police Department Sgt. Leland Kudaishi told the group that about 50 illegal game rooms operate in Oahu. He added that the number has stayed consistent, as they often reopen in different locations after raids.

Rep. Greggor Ilagan, co-chair of the working group and co-sponsor of HB 2198, HB 1945, and HB 1527, suggested that the panel can help address illegal gambling in Hawaii.

“This is something we could simply ignore, or we could figure out a way to not only control and manage what’s happening now and figure out with our working group and with our expertise how to improve the current situation we are at.”

The Policy Crossroads

Hawaii’s status as a Democratic-leaning state with no legalized gambling has long made it an outlier in U.S. gambling policy. Unlike Utah, where gambling bans are closely tied to conservative religious views, Hawaii’s resistance has historically been driven by cultural and social concerns. That includes the potential for addiction, financial harm to families, and broader community impacts.

Lawmakers have frequently cited the state’s high cost of living and income inequality as reasons for caution. They have warned that gambling losses could disproportionately affect vulnerable residents.

Others have raised concerns about altering Hawaii’s community-focused identity and tourism model, which has traditionally emphasized natural attractions rather than gaming-based entertainment.

As the working group discussion underscored, prohibition has not eliminated gambling. That tension is highlighted during the legislative session, as lawmakers introduce multiple gambling and anti-gambling bills.

Whether the Legislature pursues incremental steps — such as cruise ship gaming — or broader legalization of sports betting or casino gaming remains uncertain. What is clear is that Hawaii’s debate has shifted from whether gambling exists at all to how, or if, it should be regulated.