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Nebraska online sports betting received three hours of discussion Wednesday in a special legislative session.
Gov. Jim Pillen called the special session to address the state’s property tax crisis. Pillen did not include online sports betting in his initial proposal to provide property tax relief to Nebraska citizens, making it a longshot for inclusion in the final bill.
Sen. Eliot Bostar, a key member of the Revenue Committee, filed LB13 and LR3CA to legalize online sports betting in Nebraska. They are two of more than 100 proposals made by legislators for possible inclusion in the final property tax plan.
The General Affairs Committee will decide whether online sports betting should be part of the property tax relief discussion.
“Nebraska’s property taxes are among the highest in the nation, heavily impacting homeowners, farmers and small business owners,” Bostar told the committee. “Directing revenues from online mobile sports betting to the property tax credit fund can provide much-needed relief. This is an opportunity to create a new source of tax revenue for property tax relief.”
Nebraskans already are betting on sports
Retail sports betting already is legal in Nebraska.
In 2021, after Nebraska voters had legalized games of chance in November 2020 ballot referendums, Nebraska legislators passed a bill authorizing casinos at six racetrack locations. That bill also included physical sports betting only on the racetrack properties.
But with the casinos spread around a large, mostly rural state, many Nebraskans are going across state borders to place their sports bets rather than doing so at the Nebraska sportsbooks.
Danny DiRienzo of GeoComply told lawmakers that between July 1 of 2023 and June 30 of 2024, GeoComply blocked 4.5 million geolocation checks within the state of Nebraska.
“That’s 4.5 million times a device inside the state of Nebraska was attempting to engage with a legal sportsbook in another state,” DiRienzo said. “Those 4.5 million checks returned to 118,000 unique sports betting accounts.”
He added that 40,000 of those devices then crossed state lines to bet legally, the vast majority going to Iowa. Online sports betting markets in Colorado, Kansas and Wyoming also border Nebraska.
Really illustrating the number of Nebraskans going to Iowa to place sports bets online, DiRienzo pointed to an area off the first exit of Interstate 680 entering Iowa. In an area with nothing but cornfields, GeoComply processed 500,000 geolocation checks.
“If you can sit on your sofa and go to an illegal market and bet, which you can today in Nebraska, yet people are still opting instead to hop in their car and cross the border to bet legally where they have consumer protections in place, I think that speaks to the demand that exists right now in this state for that legal and protected market.”
Details of Nebraska online sports betting proposal
Bostar’s LB13 amends the Racetrack Gaming Act to include online mobile sports wagering.
It establishes the framework to authorize gaming operators at racetrack casinos to offer sports wagering through an online platform.
LB13 also:
- Removes the prohibition on placing sports wagers on in-state collegiate teams when playing games in Nebraska.
- Allocates 90% of tax revenue to the Property Tax Credit Cash Fund, 3% to the Compulsive Gamblers Assistance Fund, 3.5% to the Nebraska Racing and Gaming Commission’s Racetrack Gaming Fund and 3.5% to its Racing Cash Fund.
- Changes the deadline to submit a proposal for a constitutional amendment to the Secretary of State to Sept. 1 during a special session.
Bostar told the committee online sports betting projects to bring Nebraska $32 million in annual tax revenue.
The last change is key, as current statute indicates the legislature must submit ballot measures to change the constitution at least four months before the election.
Several other pieces of legislation requiring constitutional amendments offered during the special session contain the same language to allow them to be on the ballot this November.
Land-based casinos favor online sports betting
Ho-Chunk Nation, an Indian tribe in Nebraska, is in the process of building three of the six Nebraska casinos in Omaha, Lincoln and South Sioux City. A temporary casino facility is open in Lincoln and one will open Tuesday in Omaha.
Ho-Chunk already has already partnered with three biggest sports betting operators — FanDuel, DraftKings and BetMGM — to be its three skins if online sports betting comes to Nebraska.
Lance Morgan, CEO of Ho-Chunk Inc., told the committee they didn’t seek brick-and-mortar sports betting with online in mind. But with it now available in 30 states, people in the rural area where he lives ask about it.
“Because they don’t necessarily have access to one of the gaming facilities, they want to be able to do it on the phone or they’re already doing it,” Morgan said.
Senator asks to let Nebraska voters decide online sports betting
Many members of the General Affairs Committee appeared reluctant to pass what they considered an expansion on gambling.
Bostar told his colleagues that they wouldn’t be deciding whether or not to allow online sports betting. They are merely deciding whether or not they trust the people of Nebraska to make that decision for themselves.
“I think a really good way of determining whether or not Nebraska wants something is to let them vote on it. … So we have the opportunity to ask the state what they would like. I think we should. I think we should give them the question.”
Bostar cited a poll that Nebraskans already favor the measure. Conducted last month by Guidant Polling & Strategy, the poll showed almost 60% of Nebraskan voters support legalize mobile sports betting. Support increased to 65% when respondents heard the revenue goes to property tax relief.
Opponents include Nebraska football legend
Former University of Nebraska head football coach Tom Osborne told committee members online sports betting will not result in a net benefit to Nebraska taxpayers.
“There has been considerable research over the years that has shown gambling revenues produce a net loss of $3 for every $1 tax dollar received.”
Osborne added his personal experience from 25 years coaching Nebraska football.
“Having been involved in athletics for most of my life, I can attest to the fact that the most intense criticism and negative circumstances that coaches and athletes have is often not just due to losing on the scoreboard,” Osborne said. “It often results from not beating the point spread, not beating such metrics as number of turnovers, yards lost, yards gained, points scored, etc.”
Nate Grasz of the Nebraska Family Alliance said more than 50% of online gambling revenue comes from addicted gamblers and personal bankruptcies have risen 28% in states with online sports gambling.
“We are not going to gamble our way out of our state’s property tax problem, not at the expense of our kids and not on the backs of our student athletes,” Grasz said. “These proposals stand to benefit the gambling industry, not ordinary Nebraskans.”
Mike Sciandra of the Nebraska Gamblers Assistance Program had a different take on how the state should respond to problem gambling.
“Basically, gambling is all around us at the end of the day,” Sciandra said. “We’re not putting the lid on that jar anymore. We need to make sure that we’re providing the safeguards that are needed out there, and a way of doing that is providing adequate funding to the gambler’s assistance program.”
Sciandra added it’s much easier dealing with a client who is betting on legal platforms.
“These illegal books are out there that can’t be controlled. Having it legal, in a lot of ways, makes our jobs easier in treatment because we can do voluntary self-exclusions, whether it’s mobile or in person.”
Nebraska online casino will take more time
While Bostar mentioned that online sports betting could bring $32 million to property tax relief, Nebraska online casino could help even more.
PlayUSA projects legalizing online casino could add $70 million annually to the Nebraska Property Tax Credit Cash Fund.
Bostar admitted he was unfamiliar with the benefits and issues around online casinos.
“As far as online casinos and things like that, I don’t know what that really looks like. I can tell you that doesn’t sound like something that I think we should do.”
Morgan said that the tribal enterprise wasn’t interested in expanding to online casinos.
“I want to make one thing super, super clear. We do not support online casinos. Sen. Bostar said we’re on the right path, and I think that’s right. I think that online casinos would be a step too far for the average Nebraskan, and I don’t support that in any way.”
Nebraska governor supports online sports betting
While Nebraska online sports betting currently is on the outside looking in to the governor’s plan, it’s not hard to see an avenue for it being included.
During a discussion earlier in the week on the governor’s plan for property tax relief, many people opposed parts of the plan. Online sports betting could slide in as a way for the state to add revenue for property tax relief without taking away from another aspect.
In unveiling his property tax relief plan for the special session, Pillen said he supported online sports betting but wanted to do it next year. However, Pillen later added he wouldn’t stand in the way if legislators wanted to do it in the special session.
“Online sports betting is real and it is happening in the state,” said Pillen, who played for Osborne at Nebraska in the 1970s. “Whoever wants to do it is doing it, and we’re giving all the revenue to our neighbors. I will put forth, and it will be a priority bill, in January to approve online sports betting.”
How Nebraska online sports betting efforts could proceed
If Nebraska waited to do online sports betting until next year, Bostar said the state would be wasting nearly $100 million in state revenue that could be going to property tax credits. That’s because the issue wouldn’t be able to go on the ballot until November 2026.
“If we really think that it will not come to Nebraska, that we will not get to the point that the question is getting posed to the voters on the ballot, fair enough,” Bostar said. “But if we think it will and we’re just delaying it and therefore delaying any of the economic impact it can have, keeping in mind that Nebraskans are already participating, then that part doesn’t make sense to me.”
According to a Nebraska legislative source, the General Affairs Committee will decide what bills to release from committee early to mid next week. If the committee approves the legislation, it will enter the final discussion for the property tax relief package. Legislators hope to conclude the special session in mid-August.
Sen. Tom Brewer, typically a gambling opponent, called online sports betting one of the hardest calls he’s had to make.
“Part of the problem right now is western Nebraska is being de-populated because the property taxes are so high, they can’t pay them and they’re leaving,” Brewer said. “So my dilemma is I don’t like gambling because I’ve seen how it’s impacted some folks, but I’m much stronger in my dislike in seeing the de-population in my district.”
