Hawaii Lawmakers Advance Ban on Prediction Markets

The Goal of House Bill 2198

House Bill 2198 seeks to expand Hawaii’s definition of gambling to include the buying and selling of contracts tied to sports outcomes, games of skill or chance, political events, catastrophic incidents, and even deaths. In practical terms, prediction platforms operating in these areas would fall squarely under Hawaii’s existing gambling prohibition.

While all forms of gambling remain illegal in the state, this bill takes a targeted approach - focusing squarely on prediction market platforms and closing what lawmakers see as a regulatory gap.

The committee passed the bill via voice vote, with full support and no opposition. Public testimony during the February 5 hearing reflected the same sentiment, with four witnesses speaking in favor of the measure.

“Gambling by Any Other Name”

Supporters of the bill did not mince words. Hawaii Prosecutor Steve Alm warned that prediction markets pose serious risks, calling them “gambling by any other name.” He expressed concern about their potential impact on sports integrity and younger participants, describing the platforms as “really, really scary.”

Advocacy groups echoed that sentiment. Les Brunell, National Director of Stop Predatory Gambling, labeled the bill “truly visionary” and indicated that Hawaii’s approach may serve as a legislative model nationwide. His organization has already been involved in federal litigation related to prediction platforms.

Former state representative Marcus Oshiro brought data into the discussion, noting that a significant share of one platform’s revenue reportedly stems from sports-related contracts. “Call it what you will,” he stated plainly. “It’s betting.”

Committee Chair Scot Matayoshi also introduced an amendment to prevent automatic repeal in 2029 - signaling lawmakers’ intent for lasting regulatory clarity.

Hawaii Isn’t Alone - But It Is First

While Hawaii is the first state to advance a prediction market bill through committee, the issue is gaining traction elsewhere.

In New York, multiple proposals are under review. The ORACLE Act aims to prohibit prediction markets tied to politics, catastrophic events, and athletic competitions. Other bills would require platforms to seek state licensure or address concerns over insider trading.

Meanwhile:

• Iowa is exploring taxation and regulatory oversight.
• Illinois has introduced its own ORACLE Act proposal.
• Connecticut’s governor has proposed age-based restrictions for platform access.

None of those measures have yet moved forward procedurally. Hawaii, for now, leads the legislative charge.

The Broader Question: Financial Tool or Gambling Product?

At the heart of the debate lies a fundamental question: are prediction markets innovative financial instruments - or simply a modern form of gambling wearing a different label?

As federal and state jurisdictions navigate overlapping authority, the regulatory path forward remains uncertain. What is clear, however, is that the conversation is accelerating. Hawaii’s legislative move may prove influential - or it may ignite a broader constitutional and regulatory discussion. Either way, prediction markets are no longer flying under the radar.