H.B. NO.



H.D. 2


S.D. 1














SECTION 1. The legislature finds that Hawaii's gambling laws need clarification. The purpose of this Act is to amend chapter 712, Hawaii Revised Statutes, to clarify the gambling laws to provide that gambling activities offered incident to the purchase of goods or services constitute gambling, but that legitimate business game promotions do not.

SECTION 2. Section 712-1220, Hawaii Revised Statutes, is amended to read as follows:

"712-1220 Definitions of terms in this part. In this part unless a different meaning plainly is required, the following definitions apply.

[(1)] "Advance gambling activity". A person "advances gambling activity" if he engages in conduct that materially aids any form of gambling activity. Conduct of this nature includes but is not limited to conduct directed toward the creation or establishment of the particular game, contest, scheme, device, or activity involved, toward the acquisition or maintenance of premises, paraphernalia, equipment, or apparatus therefor, toward the solicitation or inducement of persons to participate therein, toward the actual conduct of the playing phases thereof, toward the arrangement of any of its financial or recording phases, or toward any other phase of its operation. A person advances gambling activity if, having substantial proprietary control or other authoritative control over premises being used with his knowledge for purposes of gambling activity, he permits that activity to occur or continue or makes no effort to prevent its occurrence or continuation. A person advances gambling activity if he plays or participates in any form of gambling activity.

[(2)] "Bookmaking" means advancing gambling activity by accepting bets from members of the public upon the outcomes of future contingent events.

[(3)] "Contest of chance" means any contest, game, gaming scheme, or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.

[(4)] "Gambling". A person engages in gambling if he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he or someone else will receive something of value in the event of a certain outcome. Gambling does not include [bona]:

(a) Bona fide business transactions valid under the law of contracts, including but not limited to contracts for the purchase or sale at a future date of securities or commodities, and agreements to compensate for loss caused by the happening of chance, including but not limited to contracts of indemnity or guaranty and life, health, or accident insurance[.]; and

(b) Bona fide business game promotions that comply with the following requirements:

(i) The game promotion is conducted or offered in connection with the sale, promotion, or advertisement of a bona fide product or service, or to enhance the brand or image of a supplier of bona fide consumer products or services. An item is not bona fide if it is offered at a price that is disproportionate to the value of the item purchased;

(ii) No purchase payment, entry fee, or proof of purchase is required as a condition of entering the game promotion or receiving something of value;

(iii) The chance to win by free play must be offered from the same pool from which the chance to win via purchase is drawn;

(iv) All materials advertising the game promotion clearly disclose that no purchase or payment is necessary to enter and provide details on the free method of participation; and

(v) In cases where a service or usage time is being sold or promoted, any usage time; privilege to use or operate; or credits accumulated by the customers must be allowed to be transferred or sold to any other person.

[(5)] "Gambling device" means any device, machine, paraphernalia, or equipment that is used or usable in the playing phases of any gambling activity, whether that activity consists of gambling between persons or gambling by a person involving the playing of a machine. However, lottery tickets and other items used in the playing phases of lottery schemes are not gambling devices within this definition.

[(6)] "Lottery" means a gambling scheme in which:

(a) The players pay or agree to pay something of value for chances, represented and differentiated by numbers or by combinations of numbers or by some other medium, one or more of which chances are to be designated the winning ones; and

(b) The winning chances are to be determined by a drawing or by some other method based on an element of chance; and

(c) The holders of the winning chances are to receive something of value.

[(7)] "Mutuel" means a form of lottery in which the winning chances or plays are not determined upon the basis of a drawing or other act on the part of persons conducting or connected with the scheme, but upon the basis of the outcome or outcomes of a future contingent event or events otherwise unrelated to the particular scheme.

[(8)] "Player" means a person who engages in gambling solely as a contestant or bettor.

[(9)] "Profit from gambling activity". A person "profits from gambling activity" if he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he participates or is to participate in the proceeds of gambling activity.

[(10)] "Social gambling" is defined in section 712-1231.

[(11)] "Something of value" means [any]:

(a) Any money or property[, any];

(b) Any token, object, or article exchangeable for money or property[,];

(c) Any purchase of an item or service that entitles a person to participate in a gambling scheme or use a gambling device; or

(d) Any entries, credits, or play points that extend or permit the privilege of playing a game of chance without charge,

or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service or entertainment."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2013.



Report Title:

Gambling Machines and Devices; Gambling Activities Offered Incident to Purchase of Goods or Services



Amends a definition in the gambling law to provide that gambling activities offered incident to the purchase of goods or services, or any entries, credits, or play points that extend or permit the privilege of playing a game of chance without charge, constitute gambling. Excepts bona fide business game promotions from gambling. Effective July 1, 2013. (Proposed SD1)


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