Honolulu, Jan 28: Lawmakers in Hawaii, one of only two U.S. states without any form of legal gambling, are reopening a long-running debate during the 2026 legislative session, as officials point to a large and persistent underground gambling market.
Multiple bills introduced this session would legalize or restrict different forms of wagering, while a newly formed legislative working group examines whether regulation could curb illegal activity estimated to move hundreds of millions of dollars annually.
Among the most expansive proposals is HB 2222, which would authorize a single casino in Honolulu and establish a Hawaii Gaming Control Commission to oversee licensing, regulation and taxation.
Under the bill, applicants would be required to pay a $1 million nonrefundable application fee and a $5,000 annual license fee for a 20-year license. The casino would be permitted to offer slot machines and table games, with table games taxed at 15% and other games at 20%. The proposal also creates a State Gaming Fund and mandates compulsive gambling prevention and treatment programs.
Other measures take a more restrictive approach. HB 2198 would update Hawaii’s definition of gambling to explicitly include prediction markets, effectively banning platforms such as Kalshi and Polymarket. Hawaii would join states including New York in scrutinizing the fast-growing sector.
Lawmakers have also introduced HB 1945, which would allow regulated gambling on cruise ships operating in Hawaii waters beginning in 2027. Cruise ship gaming would be taxed on adjusted gross receipts and subject to reporting requirements. Supporters describe the proposal as a limited, incremental step toward legalization.
Sports betting has also returned to the agenda. HB 1308, which failed in 2025 after negotiations broke down over tax rates and regulatory details, is carrying over into the new session. While it advanced further than any prior sports betting proposal, lawmakers cautioned that previous momentum does not guarantee passage this year.
Competing casino proposals have emerged as well. SB 893 would permit casino gaming as part of the redevelopment of the New Aloha Stadium Entertainment District and the Hawaii Convention Center, mirroring several provisions of HB 2222. At the same time, a separate bill, SB 1527, seeks to prohibit gambling in the stadium district altogether.
Additional carryover legislation, HB 1434 and SB 1507, would establish a Hawaii Lottery and Gaming Corporation to regulate lottery, poker and other games of chance and skill, including online offerings, for players aged 18 and older.
Beyond legislation, the state has convened a 24-member Tourism and Gaming Working Group to study legalization options and their social and economic impacts. The panel, which includes lawmakers, law enforcement officials, tourism leaders, academics and industry representatives, is expected to report its findings by the end of the year.
At the group’s first meeting, officials highlighted the scale of illegal gambling already operating in the state.
“About $700 million to $800 million a year flows through illegal gambling activity,” said Mike Lambert, director of the Hawaii Department of Law Enforcement, adding that many illegal game rooms are associated with drug dealing, armed robberies and other crimes.
Honolulu Police Department Sgt. Leland Kudaishi told the panel that roughly 50 illegal game rooms operate on Oahu and frequently reopen in new locations after enforcement actions.
Rep. Greggor Ilagan, a co-chair of the working group, said the panel could help lawmakers confront the state’s illegal gambling problem as policy discussions continue.
Hawaii’s resistance to gambling has historically been rooted in cultural and social concerns, including addiction, financial harm and impacts on community life, rather than religious opposition seen in other states. As lawmakers weigh new proposals, the debate has shifted from whether gambling exists in Hawaii to whether regulation could be a more effective response than continued prohibition.
