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The Nebraska Racing and Gaming Commission (NRGC) hired new staff to address serious compliance deficiencies highlighted in an October audit stemming from the state’s recent gambling expansion.
The news speaks to a greater trend across US markets. The number of legal gambling options has increased in most states in the past five years, and regulatory bureaucracies have been struggling to keep up.
The NRGC promoted Drew Behn to Director of Enforcement and hired Ari Saltzman as the group’s auditor to ensure regulatory compliance. They will focus on regulatory compliance and address issues from an October audit.
In the audit, State Auditor Mike Foley said the agency had a “lackluster at best and oftentimes nonexistent” oversight of casino tax revenue.
Nebraska Racing and Gaming Commission asked the state for help
Commission chairman Denny Lee said the agency asked the state for an audit to help find its leaks and plug them. He wants the agency to work with the state to improve its oversight processes and ensure compliance, integrity and transparency for future audits.
The agency only had one person responsible for its financial matters. This was enough for the state before it legalized casino gaming in November 2020, especially since its horse racing industry brought in declining revenue totals year-over-year.
However, four licensed casinos have opened since September 2022.
According to the Omaha World-Herald, Lee said that the agency’s oversight of those casinos has “exponentially” increased its responsibilities and that it had looked at adding new hires before October’s audit. Executive Director Casey Ricketts said the agency actively recruited the perfect candidate for its auditor position “for about a year and a half.”
Ultimately, the commission recognized that its gambling industry was growing faster than it could track. Now, it can work with the state to find appropriate solutions.
Other states experience regulatory speed bumps amidst gambling growth
Growing pains happen across all industries as they mature, and Nebraska is not alone in experiencing them.
States like Virginia and New Jersey have also demonstrated an increased need for regulatory oversight from booming gambling industries.
Simply put, mistakes happen. Proper regulatory oversight helps prevent those mistakes from slipping through the cracks.
A new Virginia Gaming Commission to form?
Virginia’s casino industry predates Nebraska by seven months, with state legislators passing a bill in April 2020 to allow five retail casinos. Three are open with at least temporary facilities.
The Virginia Lottery has assumed regulatory responsibilities since casinos opened, but that could change due to the growing industry. Lawmakers are assessing whether or not to create a unified regulatory agency to oversee all gambling in VA, except lottery sales.
If approved by the Virginia General Assembly, the Virginia Gaming Commission (VGC) plans to be established on July 1, 2025, and has a two-year plan to launch. If all goes according to plan, its regulatory authority will take effect in 2027.
Operator error in New Jersey
New Jersey, one of the nation’s most established gambling markets, showcased the need for a regulated gambling industry. The New Jersey Division of Gaming Enforcement (DGE) found that DraftKings, one of its top two sports betting operators, had misreported several months of wagering data.
According to the AP News, the DGE said DraftKings overreported parlay wager totals and underreported other categories. It fined the operator $100,000.
Acting Director Mary Jo Flaherty called the mistake “unacceptable,” writing that such “gross errors and failures cannot be tolerated in the New Jersey gaming regulatory system.”
DraftKings told the DGE that the discrepancies came from a coding error that has since been fixed. The issue came to Flaherty’s attention after Illinois and Oregon regulators found similar inconsistencies.
