Hawaii lawmakers moved forward a bill that would ban prediction markets during a hearing Thursday in which not one person testified in person in favor of allowing the platforms.
The House Commerce-Consumer Protection Committee agreed unanimously via voice vote to advance an amended version of the bill, after hearing from four opponents, making the Hawaii legislature the first in the nation to move a prediction market ban bill. No representative from any prediction market platform testified in person or via video link.
Hawaii’s crossover deadline is March 12, and the legislature is set to adjourn May 8. There is no similar bill in the Senate, and the introduction deadline has passed, meaning that HB 2198 will likely be the vehicle to ban prediction markets if it gains traction.
The rise of prediction markets has been a hot topic in the gambling industry for months. Kalshi, the most well-known pure prediction market, is involved in a dozen lawsuits about its legality to operate. In addition, regulators in several states have warned licensed sports betting operators against involvement, Connecticut’s governor wants to make the minimum age for prediction markets 21, a federal draft bill would ban government employee insider trading on prediction markets, and at least three federal judges have ruled that prediction markets should be banned until court cases are resolved.
“They are a real problem,” Hawaii prosecutor Steve Alm said. “Gambling by another name … this has the potential to destroy sports and destroy young men and women.”
Les Brunell, testifying on behalf of Stop Predatory Gambling Now, called prediction markets predatory, and said they have “metastasized across the U.S.” He called the platforms “a blatant attempt to avoid Hawaii’s laws on legalized gambling.”
‘Call it what you will, it’s betting’
No form of gambling is legal in Hawaii, and while the state legislature came close to legalizing sports betting during the last session, it failed. Two bills that would legalize online sports betting carried over from 2025, as well as one that would create an entertainment district that would include casinos around Aloha Stadium.
During the push to legalize sports betting in 2025, BetMGM and DraftKings lobbied in person to legalize. Since then, DraftKings — as well as Fanatics Sportsbook and FanDuel — has launched prediction market products.
Regulators across the country have pushed back against prediction markets in large part because they are federally but not state regulated, and are regulated by the Commodity Futures Trading Commission, a financial agency and not a gambling regulator. The prediction markets do not pay state taxes and are not beholden to the rigorous standards for integrity or responsible gambling that states require.
Former Hawaii state Rep. Marcus Oshiro put forward two amendments — one relating to the legislature and another about national security — during his testimony. The committee accepted both, as well as one from the committee chair that would “preserve the bill from repeal in 2029.” None would change the spirit of the bill.
During his testimony, Oshiro pointed out that that pure prediction markets like Kalshi get about 90% of their revenue via sports event contracts, and said “call it what you will, it’s betting.”
