Hawaii fantasy sports bill could create loophole, opponents say

Opponents of a Hawaii bill that would outlaw fantasy sports in certain circumstances say it could instead create a loophole to legalize the contests.

Nearly 60 million Americans play fantasy sports. Whether states should allow fantasy sports sites has caught the attention of lawmakers nationwide, and some states have gone as far as banning fantasy sports sites entirely.

The proposed Hawaii law would create the violation of promoting fantasy competitions if someone is under 21 or advertises the game on a school or college. It would also ban professional athletes from playing in fantasy contests in their sport.

Right now, breaking Hawaii’s current gambling laws can result in a misdemeanor or class C felony, a stricter penalty than proposed in the bill. Hawaii and Utah are the only states with no legal gambling.

The bill was largely opposed by agencies that said fantasy sports sites, such as DraftKings and FanDuel, are illegal under Hawaii’s current gambling laws. They also said the bill was vague.

Some worried that if passed, those not included in the bill — for instance, those over 21 who aren’t professional athletes — could be subject to stricter penalties under Hawaii’s current gambling laws. Meanwhile, others worried it would create a loophole to legalize fantasy contests for people not included in the bill.

“This only creates a violation for this small group of individuals, so everyone else is allowed to do that,” Honolulu Deputy Prosecuting Attorney Mark Tom said. “It just creates a niche in our gambling laws to allow for fantasy competitions.”

The Honolulu Police Department, Hawaii Coalition Against Legalized Gambling and the League of Women Voters were among those who opposed the bill, saying fantasy sports are a form of gambling, not a game of skill.

On fantasy sports sites, a player picks out a fantasy team and earns points on how well the athletes perform, similar to the casual, legal games people play with friends and family. But the websites can offer much larger payouts, and they can involve hundreds of players and wagers up to $1,000.

“As soon as that wager is placed, as soon as that lineup is set, those same individuals become spectators of these real sports activities and these real-world athletes,” Tom said. “They have no control over what happens in that game.”

Opponents say legalized gambling, even in the form of fantasy sports, could disproportionately affect Hawaii’s low-income communities and put some people at risk for developing gambling addictions, divorce and child abuse.

Several states, including Pennsylvania and California, are working on laws to regulate the industries. New York, Nevada and Illinois are among states that have banned the sites altogether.