Skill games across Nebraska have found their way into the crosshairs of a state senator’s quest to bring additional property tax relief to taxpayers.
State Sen. Tom Briese plans on bringing a bill to the state legislature this year to have Nebraska skill games taxed at the same rate as slot machines. Slot machines have a 20% tax on net revenue, which helps bring down property taxes.
According to an article in the Nebraska Examiner, Briese says there’s no reason the machines shouldn’t be taxed: “As a property tax relief proponent, I see these machines as another revenue source. If they’re going to be out there, they need to be taxed.”
What are Nebraska skill games?
Skill game machines are machines that appear similar to slot machines, but instead of being random games of chance, they require some skill to win. Nebraska legalized skill games in 2011 due to the need because random games of chance, like slot machines, were illegal at the time.
The number of skill games across the state has exploded in recent years. They went from 1,577 in 2018 to 3,878 in November, according to the Nebraska Department of Revenue. Skill games can be located in:
- Convenience stores
According to the American Gaming Association, skill games generate $109 billion in plays per year. That leads to around $27 billion in revenue nationwide.
Nebraska skill games could generate $20M
Briese, along with Ho-Chunk Inc., who operates WarHorse Casino Lincoln, is making the push for skill games to be on the same level playing field as slot machines.
Lance Morgan, CEO of Ho-Chunk Inc., is upset that while his company paid $5 million for a state casino license, skill game operators can purchase and install a skill game machine after paying for a $250 sticker from the state.
Skill games in Lancaster County outnumber WarHorse Casino Lincoln’s slot machines by 568 to 430.
Ho-Chunk Inc. estimates that skill game taxes could bring around $20 million in tax revenue to Nebraska. That’s in addition to about $90 million-$100 million in tax revenue when the state approved casino gaming. That’s if six casinos were to open.
Morgan says skill games are not regulated enough:
“It’s like the Wild West out there. I don’t understand why the previous administration, which was so anti-gambling, let them proliferate. Now they can’t take them away.”
He went as far as to prove this by sending an employee to tour the state to examine skill games. His employee, Rachael Johnson, found machines where minors were playing.
And he found sketchy practices from operators claiming that players had to call a number to receive winnings. Or that a mandatory tip was due to store employees upon winning.
Small businesses, charities could oppose a skill game tax
While property tax relief sounds great for many people, not everyone is enthusiastic about the potential bill. Many charities and businesses that own and operate skill game machines will likely oppose the bill.
Jim Ritzman, a member of the Sowers Club of Lincoln, says the club would stop using skill games in the event of a 20% tax on revenue. “It’s like they’re going after people who give away money. Our proceeds all go back into the community. It would kill us.”
The Sowers Club of Lincoln owns and operates 10 to 12 machines in sports bars across Lincoln. They make about $75,000 a year from them. The revenue earned from the machines goes toward youth activities and college scholarships.
Kent Rogert, a lobbyist representing American Amusements, a skill game company, contests the idea that skill games and slot machines are similar. He claims some who play skill games regularly often win more money than they put in.
John Fox, an executive at American Amusements, disagrees with the idea that skill games are under-regulated. And he says a tax on Nebraska skill games would be an increased tax on small businesses and charities.
He says his BankShot machines split half of the net revenue with those entities. Revenue which in some cases helps keep those doors open.