HB 2040 Summary

• Establishes the Hawaii Lottery and Gaming Corporation as a public corporation to conduct and regulate wagering and gaming operations including lottery, poker, and casino games for individuals over 18 years old, excluding sports betting.

• Creates a 7-member board of directors appointed by the governor (3 members), president of the senate (2 members), and speaker of the house (2 members), each serving staggered 5-year terms with compensation and expense reimbursement.

• Requires the corporation to select a qualified gaming provider through competitive process to operate technology infrastructure, gaming platform, and marketing services in exchange for percentage of revenues and reimbursement of operational costs.

• Establishes the Lottery and Gaming Special Fund to receive net proceeds from gaming operations, with mandatory allocations including 25% to department of education shortage differentials, 20% to education capital improvements, 20% to University of Hawaii capital improvements, 10% to medical student scholarships, 10% to family practice rural residency program, 5% to watershed protection, 5% to problem gambling prevention, and 5% to program administration.

• Makes corporation operations exempt from state taxation, chapter 91 rulemaking requirements, and chapter 103D procurement laws, while prohibiting use of state general fund moneys and requiring quarterly financial reporting to governor and legislature; effective July 1, 2022.