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Lawmakers in Hawaii are taking aim at prediction-market websites they say function like gambling, even as the state keeps traditional sports betting illegal.
The spark for the latest push was political, not sporting. Ahead of Josh Green’s State of the State address, bettors reportedly staked $448,667 on contracts tied to what he would say, according to industry reporting.
The bill: turn prediction contracts into “gambling” under Hawaii law
The proposal is Hawaii House of Representatives Bill 2198 (HB 2198). It would update Hawaii’s definition of “gambling” so it explicitly covers buying, selling, or speculating on event-based contracts tied to real-world outcomes.
The bill spells out what it wants to block. It lists contracts tied to sports, contests and promotions, events involving people, politics and government actions, catastrophes such as disasters or public health crises, and even death-related outcomes.
In its findings section, the bill says these products “prey upon a gap” in state law and need a direct ban.
If enacted as written, the effective date would be July 1, 2026.
Where the bill stands today
Yesterday, HB 2198 just cleared an early hurdle.
Legislative tracking shows the House Consumer Protection and Commerce Committee recommended the measure be passed with amendments, on Feb. 5, 2026, with an 11–0 vote and no reservations.
The bill is also routed to the Judiciary Committee next, according to the tracking summary.
Lawmakers say prediction markets are a problem
Supporters argue these sites don’t just offer sports-style “yes/no” bets. They also offer contracts on politics and public events. That opens the door to manipulation, they say, because information often circulates in advance.
That concern is also the reason behind the bill’s rationale. It warns that prediction contracts can create “financial incentives and motivations” tied to sensitive events.
Local reporting has also framed the products as a workaround for Hawaii’s gambling ban, with lawmakers arguing the state needs a clearer rule that covers modern online betting products, not just the old categories.
The national backdrop: courts are testing where “event contracts” end and gambling begins
Hawaii is not acting in a vacuum. The larger fight is already playing out in courtrooms.
In Massachusetts, a judge ruled in January that Kalshi could not let residents trade sports-related contracts without a state license, after a lawsuit from Andrea Joy Campbell.
The judge, Christopher Barry-Smith, said licensure and oversight serve “public health and safety” and the state’s financial interest.
Source: Yahoo
