Nebraska Sports Betting Bill — Sans In-State Team And Mobile Betting — Heads To Governor’s Desk

Written By Russ Mitchell on May 21, 2021 - Last Updated on July 27, 2021
nebraska sports betting to pass

Sports betting is part of the casino expansion legislation en route to Nebraska Gov. Pete Ricketts. He now has five days to sign or veto LB561 — the Nebraska Racetrack Gaming Act.

Legal Nebraska betting is currently limited to racetrack wagers and paper betting slips at keno parlors. Now the state is a governor’s signature — or Senate override — away from multimillion-dollar casino projects at the state’s racetracks.

LB561’s final reading passed 44-3 on Thursday. If Nebraska’s senators maintain that level of support, the margin would be enough to override a veto.

Nebraska’s proposed casino policy

Here are some highlights of the legislation:

  • LB561 would officially bring sports wagering to Nebraska, but bets must be placed at specialized kiosks within Nebraska “racinos.”
  • Prop bets on an individual athlete’s performance won’t be allowed.
  • Bettors can’t wager on Nebraska college teams when the team is playing at home.
  • Betting on high school sports and minor league sports will be prohibited.
  • Some senators wanted to protect the state’s small keno parlors by allowing them to introduce electronic keno apps. That didn’t survive the amendment process. Instead, lawmakers will require the new casinos to match the keno parlors with similar keno machines and paper betting slips.
  • The governor will appoint seven members of a State Racing and Gaming Commission, subject to Senate confirmation. The commission will then begin a search process for the executive director.

Public, governor disagreed on gaming expansion

Lawmakers had to move on some form of casino policy because nearly 65% of voters approved three constitutional changes on Nov. 3 to allow casino games at Nebraska’s six racetracks.

That was a defeat for Ricketts, who opposed gambling expansion leading up to last year’s general election. The unicameral legislature sent him casino policies with a conservative tint.

During the debate, District 39 Sen. Lou Ann Linehan, of Elkhorn, told fellow lawmakers:

“I’m opposed to gambling, but we’re here to do our job and respect the will of the people.”

District 41 Sen. Tom Briese, of Albion, sponsored the Nebraska Racetrack Gaming Act. He also doesn’t like gambling but said the following of past betting restrictions in the state:

“It encourages Nebraskans to place illegal bets online or with their bookies. (It) sends more tax dollars to Iowa and it enhances the profit of Iowa casinos.”

Mike Moser, president of Omaha Exposition and Racing, said:

“It’s going to mean the property tax relief that everyone has been so desperately clamoring for, and it means that we’re going to be able to keep all this tax revenue in Nebraska.”

Iowa casinos vs. Nebraska racinos

With Nebraska’s casino regulations likely in place, a major developer can polish off the schematics for multimillion projects in southeast Nebraska.

Winnebago Tribe of Nebraska tapped WarHorse Gaming to develop racetrack casino (“racino”) additions in Omaha, Lincoln and, eventually, South Sioux City.

  • Construction on the $220 million WarHorse Lincoln casino and racetrack expansion is expected to begin early this summer at Lincoln Race Course.
  • Plans for the $220 million WarHorse Omaha casino will center around a destination-retail sportsbook at the Horsemen’s Park racecourse in an older section of Omaha. WarHorse Omaha hopes to be operational by the winter of 2022-23.

In addition, Iowa-based Elite Casino Resorts will develop Grand Island Casino Resort at Fonner Park.

As dignitaries break ground on casinos in Nebraska, concerns over gaming revenue will shift to the Iowa side of the Missouri River. Two of Iowa’s top three casinos in adjusted growth revenue reside in Council Bluffs.

Brian Ohorilko, of the Iowa Racing and Gaming Commission (IRGC), said:

“There will be an impact on overall revenue — casino revenue, sports revenue — there’s no question. A number of the operators in that part of the state have indicated that they do expect a decline in their attendance and their revenue. As far as how much? It’s difficult to know at this point time. A lot of it will really kind of depend on the size and scope and the facilities.”

Nebraska expansion hurts Iowa casinos in key locations

PlayIA examined revenue reports from the 12-month range before casinos were limited and shut down due to pandemic health and safety mandates.

From March 2019 to February 2020:

  • Council Bluffs’ three casinos — Ameristar Casino, Horseshoe Council Bluffs and Harrah’s Council Bluffs Casino — combined for about $415.2 million in adjusted gross revenue.
  • Council Bluffs has just three of the state’s 19 casinos, but the facilities accounted for 27.6% of the state’s $1.5 billion in adjusted gross revenue.

A third WarHorse Casino in South Sioux City will impact Hard Rock Casino on the Iowa side of the metropolitan area. Hard Rock collected $78.6 million based on numbers from PlayIA‘s pre-pandemic 12-month records review. When added to the Council Bluffs earnings, the Missouri River casinos collected about one-third of the state’s adjusted gross revenue.

Ohorilko said:

“A good portion of the revenue that came into the Council Bluffs facilities did come from Nebraska — cities like Lincoln and Omaha. Just knowing that, and knowing what the what the operators have told us, I think everyone does expect that we will see a decline in revenue and attendance in that part of the state once these casinos are built. Then at that point, it will be kind of a competitive environment in that area.”

The IRGC Administrator expects Nebraskans to “try a shiny new facility.”

“Then typically, they will settle into the facility that they’re most comfortable with, or that treats them the best. We’ll expect an initial impact. And then it will kind of interesting to just see how things settle a year or two later.”

Photo by Nati Harnik / AP
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Russ Mitchell

Russ Mitchell has been covering news and sports in northwest Iowa since 1997, including 11 years as managing editor for one of the most acclaimed community newspapers in the state. He looks forward to keeping readers up to date on the growing sportsbook industry in Iowa.

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