Published on: January 27, 2026, at 08:26h.
Updated on: January 27, 2026, at 08:26h.
- Hawaii Democrats propose legislation to prohibit prediction markets within the state.
- The ban would encompass a wide range of event contracts, going beyond just sports.
- This state has historically resisted the expansion of gaming opportunities.
Lawmakers in Hawaii are looking to say “aloha” — in a farewell sense — to prediction markets.
Democrats have introduced House Bill 2198 — legislation that, if passed, would impose a prohibition on various event contracts, extending well beyond just sports betting.
“The legislature observes that recent trends in the consumer-focused financial market have enabled individuals to establish financial incentives centered around events in athletics, politics, disasters, and mortality,” states the bill text.
The bill outlines concerns regarding event contracts breaching numerous “ethical and moral standards” and posits that operators of prediction markets are taking advantage of loopholes in Hawaii’s exceptionally stringent gaming regulations. Hawaii and Utah are the only two states in the U.S. where no betting forms are permitted, not even a state lottery.
Hawaii Targets Prediction Markets
Though geographically remote, Hawaii is now joining a multitude of states that are tightening legal scrutiny on prediction market operators.
Many of these places have legalized sports betting and are alleging that prediction market operations are circumventing state gaming regulations. While this is not applicable in Hawaii, proponents of HB 2198 are advocating for an update to the state’s anti-gaming statute to include event contracts.
“Thus, the aim of this Act is to modernize Hawaii’s gambling legislation to explicitly ban prediction event contracts related to sports, contests, politics, disasters, and deaths,” the legislation articulates.
At present, prediction markets are permitted in Hawaii due to claims that they adhere to federal oversight rather than state governance. The Commodities Futures Trading Commission (CFTC) oversees prediction markets; however, in light of recent state legal victories against event contract operators, these businesses may not be able to maintain their standing as federally regulated entities.
Hawaii Aims to Redefine Gambling
Historically, Hawaii has seen debates about gaming expansion but has ultimately turned down such proposals. There is potential for amending the existing definition of gambling to inhibit prediction markets from operating within its borders.
HB 2198 specifies that an individual is considered to be gambling if they wager something of value based on the outcomes of uncontrollable events. The legislation clarifies that futures contracts do not constitute gambling, yet lawmakers exclude event contracts from traditional financial derivatives.
Advocates for the bill aspire for Hawaii’s gaming laws to reflect that financial products linked to future event outcomes span sporting events, political contests, natural disasters, and fatalities — all available for wagering on prediction markets.