Nebraska legislators listened to over three hours of testimony at the first legal digital gambling hearing. Although no votes were cast, opponents dominated the meeting.
The General Affairs Committee of the Nebraska Legislature heard opinions on four bills legalizing sports betting from various representatives.
The only consensus between supporters and opponents is that online gambling has already appeared on Nebraska's black market. Supporters argue that legalization would provide law enforcement with tools to combat the illegal market. Opponents counter that legalization would only increase the total number of gamblers.
Since 2023, some areas in Nebraska have started offering retail gambling, and some legislators have been trying to add digital gambling to the menu for years, but without success. Recently, the issue was not considered in a special summer session.
The first committee hearing was about LR20CA, a constitutional amendment that would leave the decision to legalize digital gambling to the voters. Any framework bill submitted must pass through this amendment to become law.
According to the committee chair, the feedback on the proposed constitutional amendment included three supporters, including representatives from BetMGM and DraftKings, and 51 opponents. Not everyone testified in person. Similarly, in all digital gambling bills, the number of opponents exceeded that of supporters.
Iowa's Story
In 2020, Nebraska voters approved a gambling referendum. At that time, it was unclear whether sports betting was included in the legalization. Legislators eventually determined that live sports betting was included.
The first bets were placed in June 2023 at WarHorse Casino Lincoln. This casino, along with others in the state, is operated by Ho-Chunk Inc., the commercial arm of the state's Winnebago Tribe.
The current expansion plan would add six digital platforms, while requiring platforms to be linked to physical casinos. It allows each location to have one skin or platform. Several industry insiders support increasing this number. A representative from Underdog requested three per location, believing that the more competition, the stronger the market.
All of Nebraska's border states have legalized sports betting. Iowa is the state mentioned most in the testimony, as there is a cornfield across the border from Nebraska, which geolocation service GeoComply has identified as a gambling hotspot.
GeoComply's Senior Vice President of Compliance, Lindsay Slader, told the committee that her company expects a 63% increase in geolocation checks in Nebraska by 2024. These checks indicate that bettors are attempting to place bets. She said there were 3.9 million attempts during the NFL season.
Ho-Chunk Aims to Enter the Digital Realm
Ho-Chunk CEO and President Lance Morgan also supports further expansion of the gambling business. He noted that the largest gambling companies in the U.S. hold about 90% of the market share. If sports betting is legalized, his company plans to partner with one of these companies.
"There are four entities that are an oligopoly," he testified. "We're not going to reinvent the wheel. But we will make an effort not to be victims of their growth—we are participants."
Morgan previously testified that his company and the tribe are "local entities," implying that sports betting revenue would stay in Nebraska. However, opponents point out that the headquarters of major national operators are not located in Nebraska. Such companies typically do not hire a large number of new employees when launching digital gambling in a state.
Stakeholders Over-Promise Tax Revenue?
Morgan also testified that Nebraska could generate $32 million in tax revenue from digital gambling annually. Nebraska has a population of 2 million, and the bill requires a 20% tax rate. The fiscal note for the authorizing legislation LB421 predicts that tax revenue will decrease to $19 million starting in the fiscal year 2027.
In comparison, West Virginia (population: 1.77 million) has been offering live digital betting since September 2019. Like Nebraska, West Virginia lacks famous professional sports franchises but has major college football and basketball teams.
West Virginia's total tax revenue over four and a half years was $2.8 billion, with $25.9 million collected at a 10% tax rate. If the tax rate were 20%, the state's tax revenue over five years would be approximately $52 million, or about $10 million per year.
In Kansas (population: 3 million), the tax rate is also 10%. Digital gambling launched in the state in September 2023, and as of January 2025, the total revenue was $5.7 billion. The state collected $26.5 million in taxes, about $19 million per year. At a 20% tax rate, this would be approximately $38 million per year—in a state with 1 million more people.
Bernal: Betting on an "Epic Policy Failure"
Opponents point out that concerns about gambling addiction are the main reason for rejecting legalization. Les Bernal of the "Stop Predatory Gambling" organization called legal gambling "a significant policy failure." Bernal stated that the rate of gambling addiction in legal states has increased, and its social harms far outweigh its benefits.
In Nebraska, gambling tax revenue is designated for property tax relief. An opponent living in Nebraska said that since gambling began, her property tax bill has not seen any relief.
According to a report by 1011 Now, the state generated $29 million in land-based gambling revenue in 2024, including $942,000 from sports betting. About $20 million of this will specifically go to the property tax relief fund. This could mean a reduction in property tax bills of 0.5% to 1%.
It is not yet clear whether legislators are leaning in one direction, but the overwhelming number of opponents suggests a lack of consensus, indicating that the legislature may not yet be ready to commit. However, bill sponsor Eliot Bostar essentially stated that it would be foolish for the state not to take advantage of this opportunity.
"People are already involved," the senator said. "Not passing this bill won't stop any of it. I think we should use this revenue for public purposes."
Discussing the Gambling Ban
The discussion also included LB 63, a bill that would repeal the existing ban on retail betting on home games of Nebraska's college teams. Nebraska is currently the only state with an NCAA Power 5 team that implements such a ban. Lynn McNally, CEO of the Nebraska Knights and Director of Government Relations for WarHorse Casinos, testified in support of the bill.
One of her arguments is that since the NCAA began allowing college athletes to benefit from their name, image, and likeness (NIL) in July 2021, there have been "millionaire freshmen" on Nebraska's college teams. She said she does not believe these players would risk losing endorsement and advertising revenue by fixing games. She also mentioned that the ban creates a practical problem, as sports betting cashiers face "harassment" when telling customers they cannot place bets.
Opponents argue that allowing betting on home games of Nebraska teams would put athletes and their team personnel at risk. Additionally, they state that this is another path to addiction.
Meanwhile, bill sponsor Tom Brandt stated that "anecdotal" evidence suggests that allowing such betting could increase the state's tax revenue by 25%.
