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Online gaming could become a reality in Nebraska out of necessity, not luxury.
Legislators kicked off a special session last week with one focus in mind: lowering property taxes for residents. One possible solution? Legalize online sports betting in Cornhusker State and use a portion of tax revenue to help temper rising property taxes.
Nebraska Legislative Bill 13 reads:
“The Legislature finds that Nebraska relies more heavily on local property taxes to support public education compared to other states and consistently ranks in the top ten among all states in terms of per capita property tax burden on its citizens.
The Legislature further finds that is important to authorize and impose a tax upon the gross gaming of sports wagering by means of an online sports wagering platform in order to create a property tax relief program to reduce the tax liability of property taxes paid to support public education.”
Key takeaways
- Nebraska is facing a property tax crisis that legislators are trying to ease with online gaming.
- A new bill would legalize online sports betting, sending 90% of gaming tax revenue to property tax relief.
- Legalizing online casinos could add $4.5 million to $5.8 million in tax revenue each year.
90% of online sports betting tax revenue would go to property tax relief
Nebraska’s state regulations place a 20% tax on sports betting revenue. So, for every $1 million in revenue a sportsbook generates, it has to pay $200,000 in taxes to the state.
That tax revenue is split up four ways:
- 70% to property tax relief
- 25% to the county where the sportsbook is located
- 2.5% to the general fund
- 2.5% to Nebraska’s Compulsive Gamblers Assistance Fund
The bill submitted during the special session, Nebraska’s LB13, would alter the existing tax distribution structure for online sports betting. Namely, it increases the property tax relief share by 20 percentage points:
- 90% to the state’s Property Tax Credit Cash Fund
- 3.5% to the Racing and Gaming Commission’s Racing Cash Fund
- 3.5% to the Racing and Gaming Commission’s Racetrack Gaming Fund
- 3% to Nebraska’s Compulsive Gamblers Assistance Fund
NE online casinos could generate up to $5.8M in property tax funds
Online casinos are not on the table during this special legislative session. However, legalizing online sports betting could open the door for online casinos, especially if industry experts project online casinos contributing more to property tax relief than online sportsbooks.
Based on revenue data from the seven states that have active online casino markets, PlayUSA projects that Nebraska online casinos could generate $32.2 million in slow months:
| August online casino revenue | Population (according to 2023 Census Bureau data) | Per-capita revenue | |
|---|---|---|---|
| Pennsylvania | $225 million | 13 million | $17.31 |
| New Jersey | $198.4 million | 9.3 million | $21.33 |
| Michigan | $196.7 million | 10 million | $19.67 |
| Connecticut | $44.6 million | 3.6 million | $12.39 |
| West Virginia | $20.4 million | 1.8 million | $11.33 |
| Delaware | $5.8 million | 1 million | $5.80 |
| Rhode Island | $3 million | 1.1 million | $2.73 |
| Average | $99.1 million | 5.69 million | $17.42 |
| Nebraska (projected) | $34.8 million | 2 million | $17.42 |
Based on Nebraska’s existing gaming tax rate of 20%, Nebraska online casinos could generate a projected minimum of $6.4 million in monthly tax revenue. If 70% of that money goes toward property tax relief, the state could see $4.5 million.
That number goes up to $5.8 million if property taxes get a 90% share of iGaming revenue.
