Prediction market apps have quietly built a large user base in Hawaii, where gambling is banned, and state lawmakers now want to tax or restrict them.

• Kalshi says it has 100,000 users in Hawaii, many betting on college football this season.
• The apps work around state gambling bans because they are regulated by the federal government, not by states.
• That also means Hawaii collects no tax money from the activity happening inside its borders.
• Users trade contracts against each other rather than against a house, and the minimum age is 18 instead of 21.
• Lawmakers worry some people will lose big money with no state-funded help or addiction programs in place.

Outlook: Hawaii legislators plan to take up bills next session to either ban or regulate and tax these apps, and at least 14 other states are weighing similar moves.