Hawaii committee advances a bill banning prediction markets

Hawaii lawmakers have taken a step toward prohibiting prediction markets after a House committee unanimously advanced legislation that would classify such platforms as illegal gambling.

Representative Scot Matayoshi introduced House Bill 2198, which on February 5th became the first state legislature in the country to advance a prediction market ban after passing the House Consumer Protection and Commerce Committee by an 11-0 vote.

The bill would specifically include the purchase, sale, or financial speculation on event-based contracts linked to actual outcomes in Hawaii’s gambling statute.

Sports results, competitions and promotions, human events, political actions and elections, disasters like natural disasters or public health emergencies, and death-related outcomes are among the categories that the proposed ban would cover. The law would go into effect on July 1st, 2026, if passed.

The push for legislation comes after it was revealed that almost $449,000 had been bet on Governor Josh Green‘s use of particular words in his State of the State speech.

This shows how prediction markets can make it easier to place bets on delicate or uncommon events. The bill says that these products “prey upon a gap” in Hawaii’s gambling laws.

Right now, contracts related to commodities and securities are not covered by the laws, so platforms can operate without state gambling oversight. No one from prediction market companies showed up to the committee hearing, but four people who were against these platforms did testify.

Marcus Oshiro, a former state representative from Hawaii, suggested changes to the bill that had to do with national security and legislative matters.

The committee approved these changes, as well as one that made sure the bill would not expire in 2029.

HB 2198 now moves to the House Judiciary Committee for further review. Hawaii’s legislative crossover deadline is set for March 12th, and the session concludes on May 8th.

No comparable measure has been introduced in the Senate, and the deadline for new legislation has passed, positioning HB 2198 as the primary vehicle for enacting a prediction market ban if it continues to gain support.