Hawaii Enacts Tougher Penalties for Landlords of Illegal Gambling Operations

Illegal gambling rooms in Hawaii persist as a significant issue, but Gov. Josh Green and lawmakers aim to confront these illicit activities through a newly enacted law. This week, Green signed Senate Bill 2197, which broadens the penalty framework for landlords who lease property to individuals using the premises for illegal gambling operations. The legislation, championed by state Sen. President Ron Kouchi since January, modifies the definition of “advances gambling activity” by eliminating provisions that previously shielded landlords from certain charges related to their tenants’ unlawful acts.

The term “advances gambling activity” plays a critical role in Hawaii’s prohibition on gaming, defining actions that promote gambling in both the first and second degrees. Under prior regulations, landlords were protected from prosecution for advancing gambling activity unless they made no attempt to prevent the illegal gambling from occurring on their properties. The new law places more responsibility on property owners, ensuring they actively prevent their tenants from conducting illegal activities.

Hawaii, along with Utah, holds some of the most stringent anti-gambling laws in the U.S., prohibiting commercial and tribal casinos, pari-mutuel wagering, lotteries, iGaming, and sports betting. Nonetheless, Hawaii’s gambling addiction rates remain high, partially due to the state serving as a significant feeder market for Las Vegas casinos. Those unable to afford trips to Las Vegas often turn to numerous underground gambling options within Hawaii, where illegal slot machines and table games thrive.

Law enforcement in Hawaii hopes that the tougher penalties will discourage landlords from ignoring illicit activities on their properties. Honolulu Prosecuting Attorney Steven Alm emphasized in a March letter to the State Legislature that illegal gambling venues are hotbeds for violence, illicit drugs, sex trafficking, and other dangerous activities, posing a considerable threat to communities. Alm pointed out that under the previous law, landlords could escape prosecution by making even minimal efforts, such as issuing a verbal reprimand, to stop illegal gambling. The amended law eliminates this loophole, thereby holding property owners more accountable.

However, Hawaii’s Office of the Public Defender opposed SB2197, arguing that it risks penalizing passive stakeholders who may be unaware of illegal gambling activities happening on properties they own. In a representative scenario, the office mentioned a married couple where the husband runs an illegal gambling operation unbeknownst to his wife. Despite her objections, she may be unable to stop her husband’s activities. Under the new law, both partners could face prosecution, with severe consequences such as civil asset forfeiture, loss of voting rights, and immigration repercussions.

While the office acknowledged the widespread presence of unlawful game rooms and the need to address them, they argued that SB2197 targets the wrong individuals and won’t effectively curb illegal gambling.