Does Hawaii Sports Betting Need to be Legalized for Daily Fantasy Sports Sites to Enter Market?

Information on legal sports betting in the United States is for the most part available in droves. The industry is that popular, with 38 of 50 states now offering some form of sports wagering. But there are a few exceptions where clarity can be scarce. This includes the outlook of Hawaii sports betting.

Generally speaking, it will be states without legal sports wagering that aren’t front and center. More specifically, though, it will be markets that aren’t considered flagship regions.

For instance, sports betting in California remains illegal. But you’ll have no trouble finding out the latest happenings and developments. The same goes for sports betting in Texas. Ditto for sports betting in Georgia. These states are all considered lucrative sports betting markets. The top online sportsbooks in the United States want to capitalize on their large population and expansive pro sports interest. And while this intrigue also applies to sports betting in Hawaii, sports betting in Idaho, sports betting in Alabama, etc. the thirst for information and push for legalization isn’t nearly as aggressive because they’re smaller markets unlikely to generate as much revenue as bigger ones.

This isn’t to say that the future of Hawaii sports betting should be portrayed as unimportant. On the contrary, every state’s gaming laws are pivotal. Sports betting is becoming more of a societal norm. Discussions need to be taking place at every level, regardless of whether sports betting is legal.

And yet, there are informational gaps when it comes to Hawaii’s gaming laws and outlook. The same can be said for places like Utah and Idaho, among others. So, this time around, that’s why we’re here: to shed some light on pressing questions related to the Hawaii sports betting outlook. More pointedly, we’re here to focus on Hawaii daily fantasy sports.

Unlike Other States, Hawaii Has Assumed a Specific Stance on Daily Fantasy Sports

This is a tantalizing topic because for so long, daily fantasy sports in the United States have existed in a gray area. Before sports betting in the USA was ever legal, we saw these sites pop up. In many cases, little was done to halt their operations. That’s because while states had and have specific sports betting laws, they don’t always have language directed at DFS.

When you really think about it, this isn’t particularly surprising. For starters, daily fantasy sports sites in the USA paint their offerings as games of skill rather than chance. This helped them avoid the “sportsbook” label in many instances. So while there may have been laws against sports betting in a given state, residents could invest in DFS sites not because they were technically exempt, but because they weren’t directly addressed at all. 

However, this is not the case in the Aloha State. Just like Hawaii sports betting, daily fantasy sports are explicitly disallowed. And they have been for almost a decade. As Matthew Waters notes for Legal Sports Report:

“Hawaiians looking for sports entertainment unfortunately cannot turn to daily fantasy sports, either. Hawaii is one of the few states that specifically outlaws daily fantasy sports contests. Former state Attorney General Doug Chin ruled daily fantasy sports are technically illegal gambling under Hawaii’s laws. ‘Gambling generally occurs under Hawaii law when a person stakes or risks something of value upon a game of chance or upon any future contingent event not under the person’s control,’ said Chin. ‘The technology may have changed, but the vice has not.’ Therefore, daily fantasy sports contests have been illegal in the state since January 2016.”

As you can tell, there’s no gray area here.

What Will It Take for Hawaii to Authorize Daily Fantasy Sports Sites?

Based on Hawaii’s interpretation of daily fantasy sports, it sure seems like DFS sites will remain taboo until general sports betting is legalized. But the Aloha State discussed the legalization of sports betting in 2024, much to the surprise of anyone who follows the industry. 

Though the push was unsuccessful, it suggests that Hawaii may have a more open mind on amending gaming laws. Could this potentially lead to a “soft” test of changes with the allowance of DFS sites? After all, it most likely wouldn’t require a constitutional amendment. That theoretically makes it easier to do.

Still, we would not expect approval of daily fantasy sports before the legalization of Hawaii sports betting. And to be honest, it’s so much about the Aloha State current policy as it is about the state of DFS.

Over the past few months or so, more and more states are classifying daily fantasy sports as illegal. This includes markets with legal sports betting. The motivation behind this groundswell? Pick ‘Em Games. These are contests in which customers wager on the outcome of a player’s stat lines. Because they are based on real-life events, officials have started to argue they qualify as unlicensed sports betting rather than fantasy competitions. 

As a result, daily fantasy sports sites have been forced out of entire markets, including bigger ones such as Florida. This isn’t a trend we see reversing anytime soon. In fact, more states seem to be following Hawaii’s lead. 

To what extent online USA sportsbooks are playing a part remains to be seen. Licensed operators like DraftKings and FanDuel may be taking issue with unlicensed DFS sites eating into their market share. Even if it means shuddering their own daily fantasy contests, they’re likely okay with winnowing down the competition.

All of which is to say: Daily fantasy sports aren't legal in the Aloha State. And that’s unlikely to change even when Hawaii sports betting eventually gets legalized. 

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: