Hawaii Attorney General Doug Chin issued a formal advisory opinion Wednesday stating that daily fantasy sports contests, such as DraftKings and FanDuel, are illegal under Hawaii gambling laws, and his office is considering pursuing criminal or civil enforcement actions against companies operating the websites.
“Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under a person’s control,” Chin said in a news release. “The technology may have changed, but the vice has not.”
“Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under a person’s control. The technology may have changed, but the vice has not.”
Doug Chin
Hawaii attorney general
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Under Hawaii law, promoting gambling can constitute a class C felony, punishable by up to five years in prison and a fine of up to $10,000.
Chin’s opinion signals a blow to company officials who have been lobbying local lawmakers to initiate protections for the fantasy sports industry in Hawaii. But it may also form the basis of efforts to change Hawaii’s gambling laws. In recent days, lawmakers have introduced several bills that would provide legal cover for the industry.
Two of the bills, Senate Bill 2722 and House Bill 1838, were proposed by the fantasy sports industry, said Sen. Gil Keith-Agaran (D, Waihee-Wailuku-Kahului), who introduced the Senate version.
The measures stipulate that daily fantasy contests are not gambling, and would implement a number of consumer protections, such as requiring operators to verify that customers are at least 18.
Keith-Agaran said the bills will be reviewed in light of the attorney general’s position.
Chin’s opinion was issued in response to an inquiry from Sen. Rosalyn Baker (D, West Maui-South Maui), who told the Honolulu Star-Advertiser that she had recently met with company representatives.
“The folks representing DraftKings and FanDuel made an appointment and came in to see me,” she said. “My first reaction was, ‘Well, it is not legal in Hawaii.’ That was my nonlawyer take.”
Baker said she sought further clarity from the Attorney General’s Office. If Chin had deemed it legal, she said, the question for lawmakers would be how they might properly regulate it.
“I know there are some folks, members of the Legislature, that enjoy this activity and probably will not be happy that the AG came down the way that he did,” said Baker.
She said that if the Legislature moves forward with efforts to legalize the contests in Hawaii, then lawmakers should ensure there are proper consumer protections in place.
Randy Mastro, an attorney for DraftKings, said Chin’s interpretation of Hawaii law is incorrect and that the company would continue “its constructive work with lawmakers.”
“We respectfully disagree with the attorney general’s opinion, which is predicated on a fundamental misunderstanding of daily fantasy sports. DFS is a game of skill and Hawaii law clearly permits such games of skill,” Mastro said in an emailed statement. “We intend to continue our constructive work with lawmakers in the state, and across the nation, to see to it that fans are able to continue to enjoy the fantasy sports contests they love.”
FanDuel did not immediately respond to a request for comment on Chin’s opinion.
Daily fantasy sports contests have exploded into a multibillion-dollar industry in recent years, dominated by DraftKings and FanDuel. But some states have sought to regulate or ban the sites, which critics say are the latest iteration of illegal gambling.
Customers of the fantasy sports sites pay an entrance fee, put together rosters of fictional sports teams made up of real players and can win cash based on the players’ performance in real games.
Attorneys general in New York, Illinois and Texas have said the contests are illegal under their state laws.
Chin’s opinion distinguishes between daily fantasy sports contests and “traditional” fantasy sports, in which people play in a league with friends or colleagues. The traditional form of fantasy sports might be considered “social gambling,” said Chin, which is legal in Hawaii.
Hawaii residents playing in the daily fantasy sports contests are not the focus of potential enforcement actions, said Josh Wisch, a spokesman for the attorney general.
