Nebraska Casinos Face Further Coronavirus Challenges

Legalizing commercial casinos in Nebraska was an uphill climb even before the COVID-19 outbreak. Casino backers said as recently as this week they will still push for three gaming referendums on the 2020 ballot, but it remains a difficult challenge to collect enough signature to do so ahead of a July 2 deadline.

Organizers behind Keep The Money in Nebraska have not publicly disclosed their signature total, but they will need north of 120,000 voters to sign on statewide, as well as at least 5% of voters in 38 of the state’s 93 counties. Assuming the government doesn’t grant an extension, they must do so by the July deadline even as much of the state, like the rest of the country, takes unprecedented social distancing measures.

Background of Nebraska Gambling

Nebraska’s constitution has some of the most stringent anti-gambling components in the country. Aside from the state-run lottery along with a handful of horse tracks and keno parlors, there are no significant commercial gaming entities in the state.

Though several tribal gaming centers operate on sovereign tribal lands near the state border with South Dakota, Nebraska remains among a dwindling group of states without any commercial or full-scale Native American casinos. The existing facilities are allowed to operate due to federal statues granting recognized tribes broader leeway to operate gaming, but the Nebraska facilities offer few of the gambling options now common in both tribal and commercial casinos across the country, such as table games, craps and roulette.

Nebraska is one of the most conservative states in the country politically and culturally. Republicans have held the governorship since 1999, and Democrats have only been elected twice to the state’s top executive office since 1979. During much of that time, the state’s unicameral legislature, which is officially non-partisan, has nevertheless been dominated by conservative interests that have traditionally opposed gambling in most forms.

The legislature has largely followed the wishes of its constituents, at least on ballot measures. Since voters approved a bingo regulation measure in 1958, Nebraska voters have rejected six of seven gambling-related constitutional amendments. The only successful measure increased taxes.

That doesn’t mean Nebraskans aren’t gambling. Iowa has seven casinos located along its western border, including three just across the Missouri River from Omaha, far and away Nebraska’s most-populated city. Lance Morgan, who is spearheading financing for the casino drive, told Lincoln CBS affiliate KOLN that Nebraska residents have spent more than $11 billion in Iowa casinos since legal gambling began there in the 1990’s.

Details of the Nebraska Casino Measure

Casino backers are now looking to reverse decades of commercial gambling prohibition. Keep the Money in Nebraska is seeking signatures from 10% of the electorate, or roughly 120,000, that are necessary to place a series of referendums to expand gambling on the 2020 ballot.

The first would ask voters to amend the Nebraska Constitution so laws may be enacted to allow licensing, authorization, taxation and regulation of all forms of games of chance, which would be overseen the horse tracks.

A second would expand authorizations of the first, and would also create the Nebraska Gaming Commission to regulate casino-style betting.

The final ballot question establishes an annual 20% tax on gross gaming revenue generated by casino gaming. It would allocate 75% of tax revenues to the state, of which 2.5% of would go to the Compulsive Gamblers Assistance Fund, 2.5% to the state General Fund, and 70% to the Property Tax Credit Cash Fund. The remaining 25% would go to the local municipality that house the gaming centers.

Next Step in The Nebraska Gambling Expansion Process

A signature collection process is a tricky endeavor even in the best of circumstances. With many businesses closed and nearly all public gatherings banned, it becomes significantly more difficult to coral signatories. Backers of a California sports betting referendum already suspended their efforts to put a question on the 2020 ballot.

Meanwhile a legislative lifeline remains a dead end. After passing an emergency virus relief measure earlier in the week, the legislature was set to adjourn indefinitely.

Even in a traditional session, gambling measures have gained little traction in recent years, and Republicans have a de facto 30-18 advantage over Democrats. Most GOP lawmakers, as well as Republican governor Tom Ricketts, have opposed new gaming proposals. Other conservative luminaries, including legendary former Nebraska football coach and congressman Tom Osborne, oppose new gambling ventures.

That’s to neighboring states’ financial gain. Iowa and Colorado continue to expand their gaming options after legalizing mobile sports betting last year. South Dakota could legalize mobile wagering after its legislature approved a referendum question for its 2020 ballot. Missouri and Kansas are also likely to consider sports betting bills in 2021.

Should all three make the 2020 ballot, a majority of votes must be in favor in order to come into law. A ballot question to allow sports betting only narrowly passed in neighboring Colorado, which has had commercial casino gaming for decades. In more conservative Nebraska, approving the state’s first full-scale casinos could prove more difficult.

In a best-case scenario, backers will get the questions on the ballot by July and earn majority support in November. Casino operators could, in another best-case scenario, break ground in late 2020 and open their doors around a year later.

If any of those steps fall short, it means efforts will have to start again in 2022. There will almost assuredly be more casinos and betting options then, both regionally and nationally. The pressure on elected officials to keep gambling dollars within state lines will only increase, but it remains to be seen if that would be enough to break through decades of gambling opposition in Nebraska.