Hawaii Bill Moves to Ban Prediction Markets After $448K Bet on Gov. Green’s Speech
Hawaii could become the next battleground in the escalating fight over prediction markets, as lawmakers seek to outlaw a form of wagering that has exploded nationwide but operates in a gray zone of U.S. gambling law.
Lawmakers in Hawaii have introduced new legislation that could ban prediction markets in The Aloha State. The move comes after $448,667 in bets were placed on whether Gov. Josh Green would say certain words like during his annual State of the State address.
House Bill 2198, introduced by state Rep. Scot Matayoshi, would prohibit online prediction markets, making Hawaii the only state besides Utah that bans all forms of legal gambling.
For operators such as Kalshi and Polymarket, the Hawaii debate signals a new front: states are no longer viewing event contracts as abstract financial products, but as gambling activity that may require the same restrictions as sportsbooks and casinos.
From Forecasting Tool To De Facto Sports Betting
Prediction markets were originally marketed as forecasting instruments, but their use has broadened dramatically. Users can now bet on everything from elections to the weather to the Super Bowl.
Matayoshi, who chairs the House Consumer Protection & Commerce Committee, said he first learned about prediction markets from a cousin at a family Christmas party.
The more he studied them, the more he worried about manipulation and insider trading, particularly after receiving an advance copy of the governor’s speech while markets were still open.
Matayoshi said users are turning to the platforms because they are technically legal right now, calling it a “really interesting loophole” they’ve managed to exploit.
Hawaii isn’t the only state that wants to put an end to the prediction market boom. Massachusetts recently banned Kalshi from operating in the state and New York introduced a bill that would provide much-needed regulation.
The NFL even banned commercials for prediction markets during the Big Game, a sign that not everyone agrees on the exact nature of the platforms.
A State at a Crossroads on Gambling
HB 2198 is only one piece of a broader gambling debate in Hawaii.
Lawmakers simultaneously introduced measures that would legalize gambling, including:
- SB 3303 – imposing a general excise tax on online sports and fantasy betting
- HB 1945 – permitting gambling on cruise ships in Hawaiian waters with a 20% wagering tax
- HB 2222 – authorizing a single Honolulu casino with a tax on gross receipts
The contrast reflects competing visions among policymakers.
Some see new revenue streams, while others view any expansion as incompatible with Hawaii’s long-standing prohibition.
The Industry Stakes
For the gambling sector, Hawaii is a warning sign.
States that have resisted casinos and sportsbooks for decades are now being forced to define whether prediction markets are financial instruments or a new form of betting.
With billions already flowing through event contracts and more legislatures taking notice, HB 2198 adds Hawaii to the list of states making a serious attempt to pull the industry back under gambling law.
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