The Nebraska legislature’s general affairs committee heard on Monday (10 March) from representatives from all sides of the issue concerning four legal sports betting bills.
The only thing proponents and opponents agreed on is that online wagering is already happening on the black market in Nebraska. Proponents say that legalising will give law enforcement tools to tamp down the illegal market. Opponents counter that legalising will only increase the number of people gambling in total.
Retail betting has been available to Nebraskans in certain locations since 2023, and some lawmakers have been trying unsuccessfully for several years to add digital betting to the menu. Most recently, the issue failed to receive floor consideration during a summer special session.
Monday’s first committee hearing was for LR20CA, a constitutional amendment that would send the decision to legalise digital betting to the voters. That bill would have to pass for any of the filed framework bills to become law.
According to the committee chair, submissions received about the proposed constitutional amendment consisted of three proponents, including representatives from BetMGM and DraftKings, and 51 opponents. Not all testified in person. Opponents similarly outnumbered supporters concerning all of the digital betting bills.
Iowa cornfield tells a story
Nebraska voters in 2020 approved a gambling referendum. At that point, it was unclear if sports betting was included in the legalisation. Lawmakers ultimately determined that in-person sports betting was included.
The first bets were taken at the WarHorse Casino Lincoln in June 2023. The casino — and others in the state — are operated by Ho-Chunk Inc., the commercial arm of the state’s Winnebago Tribe.
The current expansion proposal would add six digital platforms while requiring platforms to be tethered to land-based casinos. It allows for one skin, or platform, per location. Several from the industry testified in favor of increasing that number. A representative from Underdog asked for three per location, arguing that the more competition allowed, the stronger the market would be.
All of Nebraska’s border states have legalised sports betting. Iowa is the one that was mentioned most often during testimony, as there is a cornfield just over the Nebraska border that geolocation service GeoComply has identified as a betting hotspot.
GeoComply senior VP for compliance Lindsay Slader told the committee her company charted a 63% increase in the number of geolocation checks in Nebraska in 2024. These checks indicate bettors trying to wager. She said there were 3.9 million attempts during the NFL season.
Ho-Chunk wants in on digital
Ho-Chunk CEO and president Lance Morgan also testified in favor of another gambling expansion. He pointed out that the biggest betting companies in the US account for about 90% of market share across the nation. His company has plans to partner with one of those companies should sports betting become legal.
“There are four entities that are an oligarchy,” he testified. “We’re not going to reinvent the wheel. But we are going to make it so that we are not victims in their growth — we are participants.”
Morgan previously testified that his company and the tribe are “local entities,” and he suggested that sports betting revenue would stay in Nebraska. Opponents, however, note major national operators are not headquartered in Nebraska. Such companies do not usually hire a significant new workforce when digital betting is launched in a state.
Stakeholder overpromising tax revenue?
Morgan also testified that the state of Nebraska could get $32 million per year in tax revenue from digital betting. Nebraska’s population is 2 million people, and the bill calls for a 20% tax rate. A fiscal note for LB421, the enabling legislation, projects a lower amount of $19 million in tax revenue beginning in FY 2027.
For comparison, West Virginia (population: 1.77 million) has offered live digital betting since September 2019. Like Nebraska, West Virginia lacks any notable professional sports franchise but has big-time college football and basketball teams.
West Virginia’s total handle for four and a half years is $2.8 billion, with the state collecting a totalof $25.9 million in tax revenue using a 10% tax rate. If the tax rate were 20%, state tax revenue would have been roughly $52 million over five years, or about $10 million per year.
In Kansas (population: 3 million), the tax rate is also 10%. Digital wagering went live there in September 2023, and total handle through January 2025 was $5.7 billion. The state collected $26.5 million in taxes, or about $19 million per year. At a 20% tax rate, that would have been about $38 million per year — in a state that has 1 million more people.
Bernal: Wagering ‘an epic policy failure’
Opponents pointed to concerns about addiction as a key reason not to legalise. Les Bernal from Stop Predatory Gambling called legal betting “an epic policy failure”. Bernal said the rate of addiction increases in legal states, and that the social harms far outweigh the benefits.
In Nebraska, gambling tax revenue is earmarked for property tax relief. One opponent who lives in Nebraska said she’s yet to see any kind of break on her property tax bill since betting went live.
According to a 1011 Now report, the state collected $29 million in total land-based gambling revenue in 2024, including $942,000 from sports wagering. About $20 million of that revenue would be earmarked for the property tax relief fund. That should potentially translate into a half-percent to 1% reduction in property tax bills.
It wasn’t clear if lawmakers were leaning in one direction or another, though opponents testifying far outweighed opponents. A lack of consensus could indicate that the legislature isn’t ready to commit, but bill sponsor Eliot Bostar essentially said the state would be foolish not to capitalise.
“People are already participating in this,” the senator said. “Not passing this won’t stop that. I believe we should draw upon the revenue for public purposes.”
At-home college betting ban discussed
Also up for discussion was LB 63, which would remove the existing retail ban against betting on Nebraska college teams when they are playing at home. Nebraska is currently the only state with NCAA Power 5 teams that has such a ban. Lynn McNally, CEO of the Nebraska Horsemen and director of government relations for WarHorse Casinos, testified in favor of the bill.
Among her arguments were that since the NCAA began allowing college athletes to benefit from their name, image and likenesses (NIL), there are “freshmen who are millionaires” on Nebraska college teams. She said she doesn’t believe these players would risk losing marking and advertising income to throw a game. She also said that one of the real-world issues with the ban is that sportsbook tellers get “harassed” when telling customers they are not able to place a bet.
NIL rules went into effect in July 2021, about eight months after Nebraska voters legalised.
Opponents argue that allowing betting on Nebraska teams when they play at home would put athletes and others associated with their teams at risk. In addition, they said, it is another avenue for addiction.
Bill sponsor Tom Brandt, meanwhile, said that “anecdotal” evidence suggests the state could see a 25% increase in tax revenue by allowing such betting.
