Online sports betting touted as way to reduce property taxes

Proposals to allow online sports betting from anywhere in Nebraska, and to allow the Legislature to ask voters to legalize it this November, were heard Wednesday during the Legislature’s special session.

Nebraska currently allows sports betting, but only at casinos located at the state’s horseracing tracks. Sen. Eliot Bostar wants to expand that, sponsoring a constitutional amendment to allow mobile online sports betting anywhere. Bostar told a public hearing of the General Affairs Committee that Nebraska is missing out.

“Nebraska is currently missing out on a $1.6 billion state industry and $32 million in annual tax revenue, which instead goes to neighboring states like Iowa, Colorado, Kansas and Wyoming,” Bostar said. “Legalizing online mobile sports betting through LR3CA could significantly boost state revenues dedicated to the property tax credit fund, addressing the burden of high property taxes.”

Bostar noted that Gov. Jim Pillen has said he will pursue legislation to legalize online sports betting next year. But he said that would mean voters could not vote on it until 2026. Meanwhile, he said Nebraskans are already betting on sports through a combination of foreign websites, getting around the geofencing that’s supposed to confine it to casinos, or simply going to another state.

“A significant share, I believe, of those who want to participate in sports gambling are already doing so,” he said. “We’re already absorbing the societal and social costs of having a gambling population that has access to gambling at their fingertips. We already are. We’re just not getting any of the benefits.”

More from the Legislature’s special session:

Committees hear support, opposition to Pillen’s budget and tax proposals

Legislature begins property tax session with a variety of bill introductions

Legislation to legalize online sports betting introduced in special session

Senator introduces bill to sell state plane for property tax relief

Supporters promote alternative to Pillen’s property tax proposal

Bostar said many Nebraskans are driving to Iowa, where mobile online sports betting is legal. And Danny DiRienzo of GeoComply, a company that checks whether bets are being made from a location where they’re legal, said his company got half a million hits last year from an Iowa cornfield bordering on Nebraska.

“I actually don’t know if this is the busiest cornfield in the state, in the US. I suspect it is. But you can see off the first exit (from) 680 heading into Iowa, there is literally nothing there, and GeoComply processed 500,000 geolocation checks,” DiRienzo said. “I would submit that is not organic Iowa sports betting traffic. That is very likely all related to Nebraskans crossing the border to place a legal wager.”

Former Nebraska football coach and congressman Tom Osborne was among those opposing the proposal, which he said could put additional pressure on student athletes. And he cast doubt on the economic benefits that are supposedly being lost.

“If all of the revenue that I hear are going to Iowa was that beneficial, you would think that Council Bluffs would look like Abu Dhabi. It doesn’t,” Osborne said.

Lance Morgan, CEO of Ho-Chunk Inc., which has Warhorse casinos in Lincoln and Omaha and plans to open one in South Sioux City, supported the proposal. Morgan said Nebraska casinos would get revenue by making licensing agreements with online betting outfits like FanDuel.

Sen. Rick Holdcroft asked Morgan about potential harm to children from allowing people to gamble at home.

“If you’re in a casino, typically, you can’t bring in your 15 year old and let him play a game in the casino, but obviously at home, you could log in and pass off the – you see where I’m going here? I think you lose some of the security of a brick and mortar casino when you move it to, you know, your iPhone,” Holdcroft said.

Morgan responded that would be a possibility.

“That seems like a real parenting challenge to me, though, if your 15 year old’s making a bet,” Morgan replied. “I guess I can’t say that bad things can never happen. I think that putting some parameters around it, and regulating it, probably makes more sense than leaving it as the wild west, as what’s going on right now.”

Longtime gambling opponent Pat Loontjer also weighed in, criticizing the amount of revenue that supporters of the measure said it would bring in to the state.

“It’s a very small percentage compared to what we need for that property tax,” Loontjer said. “I admire the governor for trying as hard as he is, and for all of you. We’re all thinking, ‘How can this be done, because it’s so necessary?’ But this particular mention of sports betting on the phone is just going to be a tiny percent of what you need to solve this problem.”

The $32 million a year in tax revenue that supporters say the proposal would generate is about six-tenths of one percent of the $5.3 billion in property taxes levied last year. Efforts to reduce that amount continue, as senators consider other proposals in their ongoing special session.