Hawaii Seeks to Ban Prediction Markets by Classifying Them as Gambling

^{Pictured: Scott Matayoshi, a member of the Hawaii State House of Representatives}

Hawaii lawmakers have introduced a bill that would classify online prediction markets as forms of gambling and ban their operation in the state, iGaming Today reported.

The initiative was introduced by state representative Scott Matayoshi.

The bill proposes expanding the legal definition of gambling to include transactions involving the buying, selling and speculation of contracts tied to the outcomes of real-world events.

These contracts typically have binary outcomes — such as “yes” or “no” — and function in practice like wagers, although they are formally marketed as financial products. The most prominent platforms operating in this segment include Polymarket and Kalshi.

The proposal was prompted by high-profile betting activity linked to a political event.

Nearly $449,000 was wagered on whether Hawaii Governor Josh Green would use specific words during his annual address.

The episode triggered a sharp response from state lawmakers.

The proposed changes are intended to close a legal loophole that has allowed prediction markets to operate outside traditional gambling regulations. If adopted, the ban could apply to markets linked to sports results, political events, actions of specific individuals, elections and other high-profile outcomes. The bill has been referred to relevant legislative committees, with the measures expected to take effect on July 1, 2026.

Hawaii remains one of the most restrictive U.S. states in terms of gambling regulation, with casinos, sports betting, lotteries and other forms of legal gambling prohibited. Against this backdrop, Gambling Park noted that the effort to classify prediction markets as gambling aligns with the state’s broader regulatory approach.