Hawaii lawmakers have introduced new legislation that would prohibit prediction market operators from conducting business in the state and targets event contracts related to sports, contests, people, politics and catastrophes.
House Bill 2198 would define prediction markets as illegal gambling under state law and go into effect on July 1, 2026, if passed. While current Hawaii gambling laws fail to prohibit "legitimate business transactions,” HB 2198 would remove the exclusion if the contract’s outcome is tied to a real-world event.
According to the legislation, prediction market operators have “allowed for individuals to create financial incentives and motivations for the occurrence of events involving athletics, politics, catastrophe and death."
HB 2198 goes on to state that “some or all of these types of contracts violate moral and ethical standards” as well as “prey on gaps” in existing Hawaii gambling laws.
The bill would ban all markets tied to sporting events, contests or promotions, outcomes involving individual people, elections and government actions, wars, disasters and death or mass-casualty events.
At the time of writing, Hawaii does not allow for the operation of commercial casinos or retail and online sports betting, but has previously considered legislation to legalize some forms of regulated gaming.
Under current Hawaii law, “a person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance…or understanding that he or someone else will receive something of value in the event of a certain outcome.”
HB 2198 was introduced to the state’s House of Representatives and must pass three phases of Hawaii’s legislative body prior to being sent to Governor Josh Green for approval.
The NCAA urged the US Commodity Futures Trading Commission to suspend college sports offerings on prediction markets until a comprehensive regulatory framework is established on January 15
