As sure as day follows night, each session of the Legislature brings renewed efforts to introduce some form of gambling to Hawaii.
This year, House Speaker Joe Souki said the House would consider a state lottery — perhaps motivated by a longing to join the frenzy of ticket-buying for the recent $1.5 billion Powerball jackpot.
Hawaii has a long history of restricting gambling, dating back to at least 1850, according to the state Attorney General’s Office. Over the years, the laws have been refined, with limited exceptions made for casual gambling in a social context, such as office pools.
Nonetheless, Hawaii has maintained a firm ban on all forms of institutionalized gambling — the only state besides Utah to do so.
It’s a tradition that has long been a part of the social fabric of our islands, and one that should not be heedlessly discarded.
So skepticism should be given to efforts in the Legislature to provide legal cover for fantasy sports contests run by companies such as FanDuel and DraftKings. While the hugely popular online games have grown the companies into billion-dollar concerns, a few states, including New York, Illinois and Texas, have declared them illegal gambling under state law.
Hawaii now joins them. The attorney general, in a formal advisory opinion
issued Jan. 27, said that Hawaii law prohibits such contests because they constitute illegal gambling — a “contest of chance” in which a person risks something of value on something not under his control or influence.
The Honolulu city prosecutor, Keith Kaneshiro, on Monday sent cease-and-desist letters to DraftKings and FanDuel, demanding that they stop accepting wagers from Honolulu residents for their daily fantasy sports contests.
Naturally, the industry denies the games are illegal, and has enlisted the Legislature to protect its interests.
House Bill 1838 and Senate Bill 2722 would authorize and regulate so-called “fantasy contests,” and specifically exempt them from the gambling statute. They would be placed outside the legal definition of a “contest of chance” or “gambling.”
These bills are industry proposals, introduced at the request of DraftKings and FanDuel. The companies argue that the games are based on skill, which are legal, rather than chance, which are not.
They have a point, albeit a weak one. Winning in a fantasy sports contest no doubt requires some measure of knowledge about the athletes and the game. To play the games, you pay an entry fee, choose a roster of players, and collect a prize based on a statistical analysis of the performance of the athletes. Participants can receive cash prizes — upwards of $1 million, the companies say. It’s also different from standard betting on the outcome a game or individual performance.
The federal Unlawful Internet Gambling Enforcement Act of 2006 creates an exception for fantasy games, which traditionally tended to take place among friends or colleagues and small amounts of money over the course of a season.
With DraftKings and FanDuel, however, you can play with a new team every day — with many thousands of players, high stakes and rapid payouts. As the attorney general’s opinion noted, the games “resemble poker more than traditional fantasy leagues.”
So it’s a stretch to say there’s not a significant element of chance involved. Even Nevada’s Gaming Control Board considers daily fantasy sports contests to be sports wagering.
It’s not surprising that Hawaii’s attorney general looked at the industry’s claims and came away unconvinced.
The bills deserve a cold eye, if not the trash bin. Online, commercial daily fantasy sports contests skirt too close to the institutionalized gambling Hawaii has long kept from its shores.
If the Legislature insists on opening the door to gambling, it should be for an obvious and defined public benefit, such as lottery revenue going to schools. FanDuel and DraftKings don’t count.
