RELATING TO SPORTS WAGERING.

HB1308

HOUSE OF REPRESENTATIVES

H.B. NO.

1308

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to sports wagering
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION 1.
�
The Hawaii Revised Statutes is amended by
adding a new chapter to be appropriately designated and to read as follows:

"
Chapter

REGULATION
OF SPORTS WAGERING

����
�
��

-1
�
Definitions.
�
As used in this chapter, unless the context
otherwise requires:

����
"Adjusted gross sports wagering
receipts" means gross sports wagering receipts less the total of all sums
actually paid out as winnings to patrons, including the monetary value of any
merchandise or thing of value awarded as a prize and subject to federal income
tax.

����
"Amateur sports" means any
sports or athletic event that is not a professional sport or athletic event,
collegiate sports or athletic event, or youth sports.
�
"Amateur sports" includes domestic,
international, and Olympic sports or athletic events.

����
"Cash" means moneys that
have value as legal tender.

����
"Collegiate sports or athletic
event" means an athletic or sporting event in which at least one
participant is a team or contestant competing on behalf or under the
sponsorship of a public or private institution of higher education, regardless of
where the institution is located.

����
"Department" means the
department of business, economic development, and tourism.

����
"Fantasy sports contest"
means a contest in which:

����
(1)
�
There are no fewer
than two participants; provided that all participants are natural persons and a
fantasy sports contest operator shall not be construed to be a participant;

����
(2)
�
Participants own,
manage, or coach imaginary teams;

����
(3)
�
All prizes and
awards offered to winning participants are established and made known to
participants in advance of the game or contest;

����
(4)
�
The winning
outcome of the game or contest reflects the relative skill of the participants
and is determined by statistics generated by actual individuals, including
athletes in the case of a sporting event; and

����
(5)
�
No winning outcome
is based solely on the performance of an individual athlete or on the score,
point spread, or any performance of any single real-world team or any
combination of real-world teams.

����
"Gross sports wagering
receipts" means the total of all cash paid by patrons as wagers.

����
"License" means any
license applied for or issued by the department under this chapter, including
but not limited to:

����
(1)
�
A sports wagering
operator license under section
���
-5 to
permit a sports wagering operator to operate sports wagering through an
approved mobile application or other digital platform that involves, at least
in part, the use of the Internet; and

����
(2)
�
A sports wagering
supplier license under section
���
-6 to
sell goods and services to be used in connection with sports wagering but not
to directly accept wagers.

����
"National criminal history
background check system" means the criminal history record system
maintained by the Federal Bureau of Investigation based on fingerprint
identification or any other method of positive identification.

����
"Professional sports or
athletic event" means an event at which two or more contestants
participate in a sports event or athletic event and one or more participants
receive compensation.
�
"Professional
sports or athletic event" shall not include events in which the majority
of participants are under eighteen years of age.

����
"Qualified gaming entity"
means an entity that offers sports wagering through computers, mobile
applications, or digital platforms in no fewer than three jurisdictions in the
United States pursuant to a state regulatory structure.

����
"Sports wagering" means
the business of accepting wagers on wagering events or portions of wagering
events, the individual performance statistics of individuals in wagering
events, or a combination of any of the same by any system or method of wagering
approved by the department via a sports wagering operator licensee's mobile
applications and digital platforms that use communications technology to accept
wagers.
�
"Sports wagering"
includes but is not limited to single-game bets, teaser bets, parlays, over-under,
moneyline, pools, exchange wagering, in-game wagering, in-play bets,
proposition bets, and straight bets.
�

"Sports wagering" shall not include fantasy sports contests.

����
"Sports wagering account"
means a financial record established by a sports wagering operator for an
individual patron in which the patron may deposit and withdraw funds for sports
wagering and other authorized purchases and to which the licensed sports
wagering operator may credit winnings or other amounts due to that patron or
authorized by that patron.
�
A sports
wagering account may be established electronically through an approved mobile
application or digital platform.

����
"Sports wagering operator"
means a sports wagering operator licensee pursuant to section
���
-5.

����
"Sports wagering supplier"
means a person that provides geolocation and age verification services to a
sports wagering operator.

����
"Wager" means a sum of
money or thing of value risked on an uncertain occurrence.

����
"Wagering event" means any
professional sports or athletic event, collegiate sports or athletic event, or
amateur sports or athletic event, including but not limited to an Olympic or
international sports or athletic event; a motor vehicle race; electronic sports
event, also known as e-sports; and any other event as permitted by the
department, provided the majority of participants in the event are not under
age eighteen.

����
"Winnings" means the total
of all sums actually paid out, including the monetary value of any merchandise
of value awarded as a prize.

����
"Youth sports" means an
athletic event:

����
(1)
�
Involving a
majority of participants under eighteen years of age; or

����
(2)
�
In which at least
one participant is a team from a public or private elementary, middle, or
secondary school, regardless of where the school is located;

provided that if an athletic event meets the
definition of college sports or professional sports, the event shall not be
considered youth sports regardless of the age of the participants.
�
An international athletic event organized by
the International Olympic Committee shall not be considered to be youth sports,
regardless of the age of the participants.

����
�
��

-2
�
Authorization of sports
wagering; license required; emergency rules.
�
(a)
�

Notwithstanding any law to the contrary, sports wagering and ancillary
activities shall be lawful when conducted under this chapter and rules adopted
under this chapter.

����
(b)
�

No person or entity shall engage in any activities in the State that
require a license under this chapter unless all necessary licenses have been
obtained under this chapter and rules adopted under this chapter.

����
(c)
�
In regard to rulemaking:

����
(1)
�
The department may
adopt emergency rules pursuant to the requirements of sections 91-3 and 91-4;

����
(2)
�
The department�s
determination that there is imminent peril and the reasons therefor shall be
stated in, and as a part of the emergency rule; and

����
(3)
�
The authority
shall make the emergency rule known to the public by publishing the rule, at
least once, in a newspaper of general circulation in the State, within five
days from the date the rule is filed with the lieutenant governor.

����
�
��

-3
�
Application; criminal history
record check.
�
(a)
�
An application for a license or renewal of a
license required under this chapter shall be submitted on an application form
as prescribed by the department.
�
An
application submitted to the department shall include the following:

����
(1)
�
The full name,
current address, and contact information of the applicant;

����
(2)
�
Disclosure of each
person that has control of the applicant as described in subsection (b);

����
(3)
�
Consent to permit
the department to conduct a criminal history record check under subsection (c)
of the applicant and each person disclosed under subsection (b)(2);

����
(4)
�
For the applicant
and each person disclosed under subsection (b)(2), a record of previous
issuances and denials of a gambling-related license or application in the State
or in any other jurisdiction;

����
(5)
�
For a sports
wagering operator applicant, proof that the sports wagering system has been
tested and certified for use in another United States jurisdiction by an
independent testing laboratory within the last six months; and

����
(6)
�
Any other
information that the department may require by rule.

����
(b)
�

The following persons shall be considered to have control of an
applicant or a licensee:

����
(1)
�
Each corporate
holding company, parent company, or subsidiary company of a corporate applicant
or licensee and each person who owns fifteen per cent or more of the corporate
applicant or licensee and who has the ability to control the activities of the
corporate applicant or licensee or elect a majority of the board of directors
of that corporate applicant or licensee, except for a bank or other licensed
lending institution that holds a mortgage or other lien acquired in the
ordinary course of business;

����
(2)
�
Each person
associated with a noncorporate applicant or licensee that directly or
indirectly holds a beneficial or proprietary interest in the noncorporate
applicant's or licensee's business operation or that the department otherwise
determines has the ability to control the noncorporate applicant or licensee;
and

����
(3)
�
Any executive,
employee, or agent of an applicant or licensee who has ultimate decision-making
authority over the conduct of the applicant's or licensee's sports wagering
operations in the State.

����
(c)
�

The department shall request a criminal history record check in the form
the department requires and submit fingerprints for a national criminal records
check against the national criminal history background check system.
�
The fingerprints shall be furnished by all
persons required to be named in the application and shall be accompanied by a
signed authorization for the release of information by a law enforcement agency
in the State and the Federal Bureau of Investigation; provided that an
individual who has submitted to a criminal history record check in the State or
any other state within the previous twelve months shall not be required to
submit to another criminal history record check; provided further that the
person shall submit the results of the previous criminal history record check
to the department and affirm that there has been no material change in the
individual's criminal history since the time of the previous criminal history
record check.

����
(d)
�

A person licensed under this chapter shall give the department written
notice within thirty days of any material change to any information provided in
the licensee's application for a license or renewal, including any change in
the identity of persons considered to have control of the licensee under
subsection (b).

����
(e)
�

The department shall keep all information, records, interviews, reports,
statements, memoranda, or other data supplied to or used by the department in
the course of its review or investigation of an applicant for a sports wagering
operator license confidential.
�
The
department shall also keep confidential any trade secret, proprietary
information, confidential commercial information, or confidential financial
information pertaining to any applicant or licensee.

����
�
��

-4
�
Denial of license; reprimand,
suspension, and revocation.
�
The
department may deny a license to any applicant, reprimand any licensee, or
suspend or revoke a license if:

����
(1)
�
The applicant or
licensee has knowingly made a false statement of material fact to the
department;

����
(2)
�
The applicant or
licensee has intentionally not disclosed the existence or identity of other
persons that have control of the applicant or licensee as required by
section
���
-3;

����
(3)
�
The applicant or
licensee has had a license revoked by any government authority responsible for the
regulation of gambling or gaming activities;

����
(4)
�
The applicant has
been convicted of a crime of moral turpitude, gambling-related offense, theft
or fraud offense, or has otherwise demonstrated, either by a police record or
other satisfactory evidence, a lack of respect for law and order;

����
(5)
�
The applicant or
licensee has not demonstrated to the satisfaction of the department financial
responsibility sufficient to adequately meet the requirements of the licensed
business or proposed business; or

����
(6)
�
An applicant has
not met the requirements of this section or any other provision of this
chapter.

����
�
��

-5
�
Sports wagering operator
license; issuance; fees; term of license; temporary license.
�
(a)
�

The department shall issue a minimum of four sports wagering operator
licenses to applicants that meet all requirements of this section, section -3,
and rules adopted under this chapter and that have not violated any provision
of this chapter; provided that this section shall not be interpreted to direct
the department to license an unqualified applicant.
�
The department shall establish a universal
start date for mobile sports wagering operators that is not later than one
hundred eighty days following the enactment of this section.
�
No person shall offer sports wagering in this
state prior to the universal start date.

����
(b)
�

Only a qualified gaming entity shall be eligible to apply for a sports
wagering operator license.

����
(c)
�

A sports wagering operator license granted by the department pursuant to
this section shall grant a licensee the lawful authority to conduct sports
wagering through a mobile application or digital platform approved by the
department and any rules adopted under this chapter.

����
(d)
�

The fee for an initial or renewal sports wagering operator license shall
be $250,000; provided that the fee shall be retained by the department for the
costs of administering this chapter.
�
In
addition to the license fee, the department may charge a processing fee for an
initial or renewal sports wagering operator license in an amount equal to the
projected cost of processing the application and performing any background
investigations.
�
If the actual cost
exceeds the projected cost, an additional fee may be charged to meet the actual
cost; provided that if the projected cost exceeds the actual cost, the
difference may be refunded to the applicant or licensee.

����
(e)
�

Except as provided in subsection (f), a license granted or renewed under
this section shall be valid for five years, unless sooner revoked by the
department pursuant to section
���
-4.

����
(f)
�

An applicant for a sports wagering operator license may submit with the
application a request to the department to commence sports wagering through a
temporary license subject to the universal start date in subsection (a);
provided that this request shall include the initial license fee of $250,000
payable to the department.
�
Upon
receiving a request for a temporary license, the department shall review the
request.
�
If the department determines
that the entity requesting the temporary license is a qualified gaming entity,
has paid the initial license fee for a temporary license, and has submitted an
application for a sports wagering operator license, the department shall
authorize the qualified gaming entity to conduct sports wagering for three
years under a temporary license or until a final determination on the sports
wagering operator's license application is made.
�
Sports wagering conducted under the authority
of a temporary license shall comply with the sports wagering operator's house
rules adopted pursuant to section
���
-7.

����
�
��

-6
�
Sports wagering supplier
license; issuance; fees; term of license; temporary license.
�
(a)
�

The department shall issue a sports wagering supplier license upon
finding that the applicant meets all the requirements of this section, section
-3, and rules adopted under this chapter.

����
(b)
�

An applicant for a sports wagering supplier license shall demonstrate
that the equipment, systems, or services that the applicant plans to offer to a
sports wagering operator conform to standards established by the department by
rule.
�
The department may accept approval
by another jurisdiction that is specifically determined by the department to
have similar equipment standards as evidence the applicant meets the standards established
by the department.

����
(c)
�

A sports wagering supplier license granted by the department pursuant to
this section shall grant a licensee lawful authority to sell or lease sports
wagering equipment, systems, or services to sports wagering operators in the
State within the terms and conditions of the license and any rules adopted
under this chapter.

����
(d)
�

The fee for an initial or renewal sports wagering supplier license shall
be $10,000; provided that the fee shall be retained by the department for the
costs of administering this chapter.
�
In
addition to the license fee, the department may charge a processing fee for an
initial or renewed license in an amount equal to the projected cost of
processing the application and performing any background investigations.
�
If the actual cost exceeds the projected
cost, an additional fee may be charged to meet the actual cost; provided that
if the projected cost exceeds the actual cost, the difference may be refunded
to the applicant or licensee.

����
(e)
�

Except as provided in subsection (f), a license granted or renewed under
this section shall be valid for five years unless sooner revoked by the
department under section ‑4.

����
(f)
�

An applicant for a sports wagering supplier license may submit with the
application a request for a temporary license; provided that the request for a temporary
license shall include the initial license fee of $10,000.
�
If the department determines that the
applicant is qualified under subsection (b), meets the requirements established
by rule for a temporary license, and has paid the initial license fee for a
temporary license and the department is not aware of any reason the applicant
is ineligible for a license under this section, the department shall issue a
temporary sports wagering supplier license.
�

A temporary sports wagering supplier license issued under this
subsection shall be valid for three years or until a final determination on the
sports wagering supplier license application is made, whichever is sooner.
�
If after investigation the department
determines that the applicant is eligible for a sports wagering supplier
license under this chapter, the department shall issue the initial sports
wagering supplier license, at which time the temporary license shall be
terminated.

����
�
��

-7
�
Sports wagering; house rules.
�
(a)
�
A
sports wagering operator shall adopt comprehensive house rules for game play
governing sports wagering transactions with its patrons.
�
The rules shall specify the amounts to be
paid on winning wagers, the circumstances under which the sports wagering
operator will void a bet, treatment of errors, late bets, and related
contingencies, and the effect of schedule changes.
�
The department shall approve house rules
before implementation by a sports wagering operator.

����
(b)
�

The house rules, together with any other information the department
determines to be appropriate, shall be available in the sports wagering system.

����
�
��

-8
�
Sports wagering operator;
duties.
�
A sports wagering operator
shall:

����
(1)
�
Employ a
monitoring system using software to identify irregularities in volume or odds
swings that could signal suspicious activity that requires further
investigation; provided that the suspicious activity shall be promptly reported
to and investigated by the department; provided further that monitoring system
requirements and specifications shall be under industry standards;

����
(2)
�
Promptly report to
the department any facts or circumstances related to the operation of a
licensee that constitute a violation of state or federal law and immediately
report any suspicious betting over a threshold amount, to be set by the sports
wagering operator and approved by the department;

����
(3)
�
Conduct all sports
wagering activities and functions in a manner that does not pose a threat to
the public health, safety, or welfare of the residents of the State;

����
(4)
�
Keep current in
all payments and obligations to the department;

����
(5)
�
Prevent any person
from tampering with or interfering with any sports wagering;

����
(6)
�
Ensure that sports
wagering occurs using only a mobile application or digital platform approved by
the department that uses communications technology to accept wagers originating
in the State or in a state or jurisdiction approved by the department and consistent
with federal law;

����
(7)
�
Conspicuously
display in all advertising for sports wagering the availability of the
toll-free helpline "1‑800-GAMBLER" or a successor phone number;

����
(8)
�
At all times,
maintain sufficient cash and other supplies to conduct sports wagering;

����
(9)
�
Maintain daily
records showing the gross sports wagering receipts and adjusted gross sports
wagering receipts of the licensee; and

���
(10)
�
Timely
file with the department any additional reports required by this chapter or by
rule adopted under this chapter.

����
�
��

-9
�
Sports wagering agreements.
�
(a)
�

The department may:

����
(1)
�
Enter into sports
wagering agreements with other states, territories, nations, jurisdictions,
governments, or other entities to accept wagers from individuals located
outside the State; provided that entering into the sports wagering agreement
shall not violate state or federal law; and

����
(2)
�
Take all necessary
actions to ensure that any sports wagering agreement entered into pursuant to
this section becomes effective.

����
(b)
�

The department may adopt rules pursuant to chapter 91 to implement this
section.

����
�
��

-10
�
Acceptance of wagers;
excluded persons.
�
(a)
�
A sports wagering operator shall accept
wagers on wagering events only through mobile applications or digital platforms
approved by the department or a patron's sports wagering account using a mobile
application or digital platform approved by the department.
�
The branding for each mobile application or
digital platform shall be determined by the sports wagering operator.

����
(b)
�

A sports wagering operator shall allow patrons to fund a sports wagering
account using:

����
(1)
�
A credit or debit
card;

����
(2)
�
Bonuses or
promotions;

����
(3)
�
Electronic bank
transfer;

����
(4)
�
An online or
mobile payment system that supports online money transfers; and

����
(5)
�
Any other means
approved by the department.

����
(c)
�

A person placing a wager shall be twenty-one years of age or older and
be physically located in the State.
�
No
person shall offer sports wagering at a physical location via kiosks, computer
terminals, or other means established for that purpose.

����
(d)
�

A sports wagering operator may accept layoff wagers placed by other
sports wagering operators and may place layoff wagers with other sports
wagering operators as long as a sports wagering operator that places a wager
with another sports wagering operator informs the sports wagering operator
accepting the wager that the wager is being placed by a sports wagering
operator and discloses the wagering operator's identity.

����
(e)
�

The department shall establish a voluntary exclusion program for any
individual to voluntarily exclude themselves from sports wagering.
�
Sports wagering operators shall use reasonable
means to comply with the exclusion of individuals participating in the
voluntary exclusion program by the department.

����
(f)
�

The department shall adopt rules to establish the voluntary exclusion
program, including the following:

����
(1)
�
Verification of
the individual's request to be placed in the voluntary exclusion program, and
for how long, up to and including that individual's lifetime;

����
(2)
�
How information
regarding the identity of individuals who are in the voluntary exclusion
program shall be disseminated to sports wagering operators;

����
(3)
�
How an individual
in the voluntary exclusion program may petition the department for removal from
the voluntary exclusion program;

����
(4)
�
The means by which
sports wagering operators and their agents shall make all reasonable efforts to
cease direct marketing efforts to individuals participating in the voluntary
exclusion program; and

����
(5)
�
The means by which
the department shall make available to all sports wagering operators the names
of the individuals participating in the voluntary exclusion program; provided
that the names shall be made available at least quarterly.

����
(g)
�

The names of the individuals participating in the voluntary exclusion
program shall be treated as confidential by each sports wagering operator.
�
Sports wagering operators conducting sports
wagering in another state may share the information provided under this section
with its agents and affiliates in other states for excluding individuals
participating in the voluntary exclusion program.

����
(h)
�

No employee of a sports wagering operator shall place a wager on any
wagering event through a mobile application or digital platform of that
employee's employer.

����
�
��

-11
�
Sports wagering revenues;
tax.
�
(a)
�
For the privilege of holding a license to
engage in sports wagering as a sports wagering operator, the tax imposed by
section 237-13(9) shall be levied on the licensee.
�
The accrual method of accounting shall be
used for purposes of calculating the amount of the tax owed by the
licensee.
�
The department shall adopt
rules and develop any forms necessary to carry out enforcement of this section.

�
This tax shall be in lieu of all other
taxes imposed on the operation of sports wagering or on the proceeds from the
operation of sports wagering in this state.

����
(b)
���
�
per cent
of all taxes collected in this section shall be deposited into the problem
gambling prevention and treatment special fund established under section
���
-12.

����
�
��

-12
�
Problem gambling prevention
and treatment fund.
�
(a)
�
There is established the problem gambling
prevention and treatment special fund into which shall be deposited:

����
(1)
�
Appropriations by the legislature to the
special fund; and

����
(2)
�
The portion of taxes collected under section
���
-11 for deposit into the problem gambling
prevention and treatment special fund.

Any interest and moneys earned on the investments
shall be credited to the problem gambling prevention and treatment special fund.

�
Notwithstanding any other provision of
law to the contrary, any moneys remaining in the fund at the end of the
biennium shall not revert to the credit of the general revenue fund.

����
(b)
�
Subject to legislative appropriation, moneys
in the problem gambling prevention and treatment special fund shall be expended
by the department of health for:

����
(1)
�
Counseling and
other support services for disordered and problem gamers;

����
(2)
�
Developing and implementing
problem gaming treatment and prevention programs, and

����
(3)
�
Creating and
disseminating responsible gaming education and messages.

����
�
��

-13
�
Civil violation.
�
Except as provided in section 14, a
violation of any provision of this chapter shall be a civil violation.
�
The department may impose a fine of no more
than $5,000 on any person who violates this chapter or $10,000
�
for all violations resulting from the same
occurrence of events.
�
Fines imposed
under this chapter shall not be limited to persons licensed under this chapter.

����
�
��

-14
�
Unlicensed sports wagering;
penalties.
�
(a)
�
Any person other than a licensee under this
chapter who conducts sports wagering shall be subject to a fine of no more than
$10,000 or a term of imprisonment of no more than ninety days, or both.

����
(b)
�

A person convicted of a second violation of subsection (a) shall be
subject to a fine of no more than $50,000 or a term of imprisonment of no more
than six months, or both.

����
(c)
�

A person convicted of a third or subsequent violation of subsection (a)
shall be subject to a fine of no less than $25,000 and no more than $100,000,
or a term of imprisonment of no less than one year and no more than five years,
or both.

����
�
��

-15
�
Exemption from gambling.
�
Sports wagering operated by a sports wagering
operator licensed under this chapter and in compliance with this chapter shall
not constitute a gambling offense under part III of chapter 712."

����
SECTION
2
.
�
Section 237-13,
Hawaii Revised Statutes, is amended to read as follows:

����
"
�237-13
�
Imposition of tax.
�
There is hereby levied and shall be assessed
and collected annually privilege taxes against persons on account of their
business and other activities in the State measured by the application of rates
against values of products, gross proceeds of sales, or gross income, whichever
is specified, as follows:

����
(1)
�
Tax on
manufacturers.

���������
(A)
�
Upon every person
engaging or continuing within the State in the business of manufacturing,
including compounding, canning, preserving, packing, printing, publishing,
milling, processing, refining, or preparing for sale, profit, or commercial
use, either directly or through the activity of others, in whole or in part,
any article or articles, substance or substances, commodity or commodities, the
amount of the tax to be equal to the value of the articles, substances, or
commodities, manufactured, compounded, canned, preserved, packed, printed,
milled, processed, refined, or prepared for sale, as shown by the gross
proceeds derived from the sale thereof by the manufacturer or person
compounding, preparing, or printing them, multiplied by one-half of one per
cent.

���������
(B)
�
The measure of the tax on manufacturers is the
value of the entire product for sale.

����
(2)
�
Tax on business of
selling tangible personal property; producing.

���������
(A)
�
Upon every person engaging or continuing in
the business of selling any tangible personal property whatsoever, there is
likewise hereby levied, and shall be assessed and collected, a tax equivalent
to four per cent of the gross proceeds of sales of the business; provided that,
in the case of a wholesaler, the tax shall be equal to one-half of one per cent
of the gross proceeds of sales of the business; and provided further that
insofar as the sale of tangible personal property is a wholesale sale under section
237-4(a)(8), the tax shall be one-half of one per cent of the gross
proceeds.
�
Upon every person engaging or
continuing within this State in the business of a producer, the tax shall be
equal to one-half of one per cent of the gross proceeds of sales of the
business, or the value of the products, for sale.

���������
(B)
�
Gross proceeds of
sales of tangible property in interstate and foreign commerce shall constitute
a part of the measure of the tax imposed on persons in the business of selling
tangible personal property, to the extent, under the conditions, and under the
provisions of the Constitution of the United States and the Acts of the
Congress of the United States which may be now in force or may be hereafter
adopted, and whenever there occurs in the State an activity to which, under the
Constitution and Acts of Congress, there may be attributed gross proceeds of
sales, the gross proceeds shall be so attributed.

���������
(C)
�
No manufacturer or producer, engaged in such
business in the State and selling the manufacturer's or producer's products for
delivery outside of the State (for example, consigned to a mainland purchaser
via common carrier f.o.b. Honolulu), shall be required to pay the tax imposed
in this chapter for the privilege of so selling the products, and the value or
gross proceeds of sales of the products shall be included only in determining
the measure of the tax imposed upon the manufacturer or producer.

���������
(D)
�
A manufacturer or producer, engaged in such
business in the State, shall pay the tax imposed in this chapter for the
privilege of selling its products in the State, and the value or gross proceeds
of sales of the products, thus subjected to tax, may be deducted insofar as
duplicated as to the same products by the measure of the tax upon the
manufacturer or producer for the privilege of manufacturing or producing in the
State; provided that no producer of agricultural products who sells the
products to a purchaser who will process the products outside the State shall
be required to pay the tax imposed in this chapter for the privilege of
producing or selling those products.

���������
(E)
�
A taxpayer selling to a federal cost-plus
contractor may make the election provided for by paragraph (3)(C), and in that
case the tax shall be computed pursuant to the election, notwithstanding this
paragraph or paragraph (1) to the contrary.

���������
(F)
�
The department, by rule, may require that a
seller take from the purchaser of tangible personal property a certificate, in
a form prescribed by the department, certifying that the sale is a sale at
wholesale; provided that:

�������������
(i)
�
Any purchaser who
furnishes a certificate shall be obligated to pay to the seller, upon demand,
the amount of the additional tax that is imposed upon the seller whenever the
sale in fact is not at wholesale; and

������������
(ii)
�
The absence of a certificate in itself shall
give rise to the presumption that the sale is not at wholesale unless the sales
of the business are exclusively at wholesale.

����
(3)
�
Tax upon
contractors.

���������
(A)
�
Upon every person
engaging or continuing within the State in the business of contracting, the tax
shall be equal to four per cent of the gross income of the business.

���������
(B)
�
In computing the tax levied under this
paragraph, there shall be deducted from the gross income of the taxpayer so
much thereof as has been included in the measure of the tax levied under
subparagraph (A), on
another taxpayer who is a contractor, as defined in
section 237-6; provided that any person claiming a deduction under this
paragraph shall be required to show in the person's return the name and general
excise number of the person paying the tax on the amount deducted by the
person.

���������
(C)
�
In computing the tax levied under this
paragraph against any federal cost-plus contractor, there shall be excluded
from the gross income of the contractor so much thereof as fulfills the
following requirements:

�������������
(i)
�
The gross income exempted shall constitute
reimbursement of costs incurred for materials, plant, or equipment purchased
from a taxpayer licensed under this chapter, not exceeding the gross proceeds
of sale of the taxpayer on account of the transaction; and

������������
(ii)
�
The taxpayer making the sale shall have
certified to the department that the taxpayer is taxable with respect to the
gross proceeds of the sale, and that the taxpayer elects to have the tax on
gross income computed the same as upon a sale to the state government.

���������
(D)
�
A person who, as a business or as a part of a
business in which the person is engaged, erects, constructs, or improves any
building or structure, of any kind or description, or makes, constructs, or
improves any road, street, sidewalk, sewer, or water system, or other
improvements on land held by the person (whether held as a leasehold, fee
simple, or otherwise), upon the sale or other disposition of the land or
improvements, even if the work was not done pursuant to a contract, shall be
liable to the same tax as if engaged in the business of contracting, unless the
person shows that at the time the person was engaged in making the improvements
the person intended, and for the period of at least one year after completion
of the building, structure, or other improvements the person continued to
intend to hold and not sell or otherwise dispose of the land or
improvements.
�
The tax in respect of the
improvements shall be measured by the amount of the proceeds of the sale or
other disposition that is attributable to the erection, construction, or
improvement of such building or structure, or the making, constructing, or
improving of the road, street, sidewalk, sewer, or water system, or other
improvements.
�
The measure of tax in
respect of the improvements shall not exceed the amount which would have been
taxable had the work been performed by another, subject as in other cases to
the deductions allowed by subparagraph (B).
�

Upon the election of the taxpayer, this paragraph may be applied
notwithstanding that the improvements were not made by the taxpayer, or were
not made as a business or as a part of a business, or were made with the
intention of holding the same.
�
However,
this paragraph shall not apply in respect of any proceeds that constitute or
are in the nature of rent, which shall be taxable under paragraph (9); provided
that insofar as the business of renting or leasing real property under a lease
is taxed under section 237-16.5, the tax shall be levied by section 237-16.5.

����
(4)
�
Tax upon theaters,
amusements, radio broadcasting stations, etc.

���������
(A)
�
Upon every person
engaging or continuing within the State in the business of operating a theater,
opera house, moving picture show, vaudeville, amusement park, dance hall,
skating rink, radio broadcasting station, or any other place at which
amusements are offered to the public, the tax shall be equal to four per cent
of the gross income of the business, and in the case of a sale of an amusement
at wholesale under section 237‑4(a)(13), the tax shall be one-half of one
per cent of the gross income.

���������
(B)
�
The department may require that the person
rendering an amusement at wholesale take from the licensed seller a
certificate, in a form prescribed by the department, certifying that the sale
is a sale at wholesale; provided that:

�������������
(i)
�
Any licensed
seller who furnishes a certificate shall be obligated to pay to the person
rendering the amusement, upon demand, the amount of additional tax that is
imposed upon the seller whenever the sale is not at wholesale; and

������������
(ii)
�
The absence of a certificate in itself shall
give rise to the presumption that the sale is not at wholesale unless the
person rendering the sale is exclusively rendering the amusement at wholesale.

����
(5)
�
Tax upon sales representatives, etc.
�
Upon every person classified as a
representative or purchasing agent under section 237-1, engaging or continuing
within the State in the business of performing services for another, other than
as an employee, there is likewise hereby levied and shall be assessed and
collected a tax equal to four per cent of the commissions and other
compensation attributable to the services so rendered by the person.

����
(6)
�
Tax on service business.

���������
(A)
�
Upon every person
engaging or continuing within the State in any service business or calling
including professional services not otherwise specifically taxed under this
chapter, there is likewise hereby levied and shall be assessed and collected a
tax equal to four per cent of the gross income of the business, and in the case
of a wholesaler under section 237-4(a)(10), the tax shall be equal to one-half
of one per cent of the gross income of the business.

���������
(B)
�
The department may require that the person
rendering a service at wholesale take from the licensed seller a certificate,
in a form prescribed by the department, certifying that the sale is a sale at
wholesale; provided that:

�������������
(i)
�
Any licensed
seller who furnishes a certificate shall be obligated to pay to the person
rendering the service, upon demand, the amount of additional tax that is
imposed upon the seller whenever the sale is not at wholesale; and

������������
(ii)
�
The absence of a certificate in itself shall
give rise to the presumption that the sale is not at wholesale unless the
person rendering the sale is exclusively rendering services at wholesale.

���������
(C)
�
Where any person is engaged in the business of
selling interstate or foreign common carrier telecommunication services within
and without the State, other than as a home service provider, the tax shall be
imposed on that portion of gross income received by a person from service which
is originated or terminated in this State and is charged to a telephone number,
customer, or account in this State notwithstanding any other state law (except
for the exemption under section 237-23(a)(1)) to the contrary.
�
If, under the Constitution and laws of the
United States, the entire gross income as determined under this paragraph of a
business selling interstate or foreign common carrier telecommunication
services cannot be included in the measure of the tax, the gross income shall
be apportioned as provided in section 237-21; provided that the apportionment
factor and formula shall be the same for all persons providing those services
in the State.

���������
(D)
�
Where any person is engaged in the business of
a home service provider, the tax shall be imposed on the gross income received
or derived from providing interstate or foreign mobile telecommunications
services to a customer with a place of primary use in this State when the
services originate in one state and terminate in another state, territory, or
foreign country; provided that all charges for mobile telecommunications
services which are billed by or for the home service provider are deemed to be
provided by the home service provider at the customer's place of primary use,
regardless of where the mobile telecommunications originate, terminate, or pass
through; provided further that the income from charges specifically derived
from interstate or foreign mobile telecommunications services, as determined by
books and records that are kept in the regular course of business by the home
service provider in accordance with section 239-24, shall be apportioned
under any apportionment factor or formula adopted under subparagraph (C).
�
Gross income shall not include:

�������������
(i)
�
Gross receipts
from mobile telecommunications services provided to a customer with a place of
primary use outside this State;

������������
(ii)
�
Gross receipts from mobile telecommunications
services that are subject to the tax imposed by chapter 239;

�����������
(iii)
�
Gross receipts from mobile telecommunications
services taxed under section 237-13.8; and

������������
(iv)
�
Gross receipts of a home service provider
acting as a serving carrier providing mobile telecommunications services to
another home service provider's customer.

�������������
For the purposes of this
paragraph, "charges for mobile telecommunications services", "customer",
"home service provider", "mobile telecommunications services",
"place of primary use", and "serving carrier" have the same
meaning as in section 239-22.

����
(7)
�
Tax on insurance
producers.
�
Upon every person engaged as
a licensed producer pursuant to chapter 431, there is hereby levied and shall
be assessed and collected a tax equal to 0.15 per cent of the commissions due
to that activity.

����
(8)
�
Tax on receipts of sugar benefit
payments.
�
Upon the amounts received from
the United States government by any producer of sugar (or the producer's legal
representative or heirs), as defined under and by virtue of the Sugar Act of
1948, as amended, or other Acts of the Congress of the United States relating
thereto, there is hereby levied a tax of one-half of one per cent of the gross
amount received; provided that the tax levied hereunder on any amount so
received and actually disbursed to another by a producer in the form of a
benefit payment shall be paid by the person or persons to whom the amount is
actually disbursed, and the producer actually making a benefit payment to
another shall be entitled to claim on the producer's return a deduction from
the gross amount taxable hereunder in the sum of the amount so disbursed.
�
The amounts taxed under this paragraph shall
not be taxable under any other paragraph, subsection, or section of this
chapter.

����
(9)
�
Tax
on licensed sports wagering.
�
Upon every
person engaged in sports wagering as a licensed sports wagering operator or
sports wagering supplier in the State pursuant to chapter
����
, there is hereby levied and shall be
assessed and collected a tax equal to ten per cent of the adjusted gross sports
wagering receipts.
�
For purposes of this
paragraph, "adjusted gross sports wagering receipts" has the same
meaning as in section -1.

���
(10)
�
Tax on other business.
�
Upon every person engaging or continuing
within the State in any business, trade, activity, occupation, or calling not
included in the preceding paragraphs or any other provisions of this chapter,
there is likewise hereby levied and shall be assessed and collected, a tax
equal to four per cent of the gross income thereof.
�
In addition, the rate prescribed by this
paragraph shall apply to a business taxable under one or more of the preceding
paragraphs or other provisions of this chapter, as to any gross income thereof
not taxed thereunder as gross income or gross proceeds of sales or by taxing an
equivalent value of products, unless specifically exempted."

����
SECTION
3.
�
Section
712-1220, Hawaii Revised Statutes, is amended by amending the definitions of
"contest" and "gambling" to read as follows:

����
"
"Contest of chance"
means any contest, game, gaming scheme, or gaming device in which the outcome
depends in a material degree upon an element of chance, notwithstanding that
skill of the contestants may also be a factor therein.
�
"Contest of chance" does not
include sports wagering under chapter
��
�
�
or
fantasy sports contests as defined in section
���

-1.

����
"Gambling"
�
[
A person engages in gambling if he stakes
or risks
]
means taking or risking
something of value upon the
outcome of a contest of chance or a future contingent event not under [
his
]

the person's
control or influence, upon an agreement or understanding
that [
he
]
the person
or someone else will receive something of
value in the event of a certain outcome.
�
Gambling does not include [
bona
]
:

����
(1)
�
Bona
fide
business transactions valid under the law of contracts, including but not
limited to contracts for the purchase or sale at a future date of securities or
commodities[
, and agreements
]
;

����
(2)
�
Agreements

to compensate for loss caused by the happening of chance, including but not
limited to contracts of indemnity or guaranty and life, health, or accident
insurance[
.
]
;

����
(3)
�
Sports wagering
authorized under chapter
���
��
and placing wagers on wagering events or
portions of wagering events, the individual performance statistics of
individuals in wagering events, or a combination of any of the same by any
system or method of wagering under chapter
���
; and

����
(4)
�
Fantasy sports
contests as defined in section
���
-1.
"

����
SECTION
4.
�
This Act does not affect rights and
duties that matured, penalties that were incurred, and proceedings that were
begun before its effective date.

����
SECTION
5.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 6.
�
This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Gambling;
Sports Wagering; Fantasy Sports; DBEDT

Description:

Allows for the regulation of sports wagering by the Department
of Business, Economic Development, and Tourism.
�
Establishes licensing requirements for sports
wagering operators and sports wagering suppliers.
�
Specifies that sports wagering shall not be
considered games of chance or gambling.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.