Nebraska Nears the Passing of Online Gambling Legislation

After seven (7) months into the current year, it's surprising to see that not one state has yet passed any kind of online legislation. Sure, there have been a couple of near misses but to no avail. There are now indications that Nebraska could be first to the online gambling finish line here in 2024.

Facing a possible fiscal problem heading into the next fiscal year, the Nebraska state legislature has decided they need to act sooner rather than later. That led to the summoning of a special legislative session that was convened during the week ending July 28, 2024.

At issue is the fact that raising property taxes might not be a viable option. Why? According to Nebraska Legislative Bill LB13:

"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 Bill goes on to make clear that tax revenue created by online sports casino gambling could certainly give a boost to the state's coffers. This option is being viewed as a viable tax revenue-raising option since it would take the focus off further burdening that state's property owners with higher property taxes.

Note: Nebraska has consistently ranked in the upper twenty percentile in terms of the per capita property tax burden that is placed on state residents.

About Nebraska Legislative Bill LB13

As is to be expected, the devil is in the details. Bill LB13 has been submitted as a means to raise tax revenue and ease growing fiscal issues. Here are a few details of the bill that warrant consideration:

• The passing of the bill would alter the gambling-related tax revenue being allocated to the state's property tax fund from 70% to 90%


• 3.5% would go to the Racing and Gaming Commission’s Racing Cash Fund


• 3.5% would go to the state's general fund


• The remaining 3% would go to support problem gambling initiatives


• The effective tax rate charged to online operators would be 20%, the same rate currently charged to retail sports betting operators

It's interesting to see that much of the focus on new gambling-related revenue is going towards online casino gambling. This is being done with the expectation of passing online sports betting legislation having minimal impact over what's already in place at the retail sports betting level.

According to a recent study, online casino gambling in Nebraska could raise as much as $6.4 million in tax revenue. This is based on data that has been accumulated from the seven (7) states that have already passed online casino gambling legislation. With 90% of this amount going to the property tax relief fund, Nebraska residents would be spared from having to fork over $5.8 million in property taxes.

To be clear, it would likely be a process by which online sports betting gets legalized, followed by online casino legislation being passed at a later date.