Hawaii seeks to impose tax on gambling trips and junkets

The Aloha State dashed locals’ hopes of accessing sports gambling products any time soon last week, with lawmakers voting against a proposed draft bill that would have set the legalization process in motion. Now, the state is looking at another gambling-related issue that many legislators believe has a serious bearing on the state, Hawaii News Now reported.

This is where junket operations come in. A new bill pitched by Sen. Stanley Chang seeks to introduce a 30% excise tax on gambling travel from Hawaii, impacting junket operations, a lucrative business that supports the local economy.

Junkets are companies that offer customers organized trips to destinations where casinos and other gambling casino facilities await, and most commonly to popular gambling hubs on the mainland.

In his arguments, Chang insisted that while Hawaii is a non-gambling state itself, the Aloha State is still struggling with the impact of gambling addiction. His bill originally sought to prohibit advertising of traveling linked to gambling to places such as Las Vegas, Nevada.

However, the original idea was opposed by the Attorney General’s Office, which explained to the Senate Consumer Protection Committee last Thursday that banning advertisements for gambling travel would be a violation of the principle of freedom of speech, especially when the legal status of gambling in Las Vegas is considered.

Among those opposing the proposal were Vacations Hawaii, a tour operator, that organizes trips to Las Vegas and to cruise ships that have casinos onboard. The operator warned of "the negative economic ramifications" passing the bill would have and insisted that there are serious constitutional concerns to address as well.

Chang understood those concerns, but he insisted that Hawaii is one of the few states that allocates no money to the treatment of problem gambling. The state presently has no gambling treatment centers and that is not least because of a lack of funds. Levying trips with tax would make it possible to start working on that issue, the legislator insisted.

The Senate Consumer Protection Committee ultimately voted against the part of the bill that would have introduced a ban on gambling trips advertisement, but it did not scrap the proposal entirely. The idea of introducing a tax seems to remain on the table as of right now, although the 30% tax is most likely going to be reduced to a more palpable rate if the bill is to have a fighting chance.

As of right now, lawmakers have not put down any specific amount. It’s not yet clear if Chang’s bill would move forward this year and whether it would be able to clear several other committees and get floor votes as well. Hawaii has missed out on Super Bowl betting yet another year. Would its lawmakers have it miss out on those trips to Las Vegas as well?