Nebraska Casino Measure Could Pave the Way For Legal Sports Betting

Nebraska voters will soon decide whether or not their state approves commercial casino gaming and possibly its first-ever legal sportsbooks.

Nebraska Initiative 429 would amend the state constitution to allow “games of chance” at licensed racetracks. It’s joined on the ballot by Initiative 430 and 431, which would create a governing body and gaming tax on the newly legal commercial gaming bodies, respectively. All three need majority approval for casino gaming to pass.

If a majority of Nebraska voters approve each gaming measure on this fall’s ballot, the state’s six horse racetracks will be able to expand into full-scale “Las Vegas-style” casinos. It remains to be seen if that can (or will) include sportsbooks, but it’s a critical step for a state without commercial casinos; a “no” vote effectively halts sports betting’s hopes in Nebraska for the foreseeable future.

Nebraska Sports Betting Hopes Sparked by Casinos

If approved, games of chance — such as roulette, craps and slot machines — would be legal at state horse racetracks. What that means for sports betting remains to be seen.

Since the Supreme Court struck down PASPA in May 2018, states have been able to approve legal sportsbooks within their borders. In Nebraska, the state constitution’s gambling bans require a voter referendum, such as Initiative 429, before sports betting could begin.

However, the initiative only covers games of chance. Sports betting is typically considered a game of skill.

In Nebraska, it’s too early to tell if the ballot measure’s language in and of itself would be enough to allow sports betting. Nate Grasz, a representative from the Nebraska Family Alliance, which opposes the measure, told the Omaha World-Herald he wasn’t sure if the referendum encompassed sports wagering.

Nebraska still hasn’t technically approved daily fantasy sports, even though leading operators such as DraftKings and FanDuel still accept players in the state. Lawmakers pushed for legalization legislation in recent sessions, arguing these are games of skill instead of luck, but the legislation gained little traction.

This is significant because gambling opponents could argue sports betting is not covered by the ballot measure and would require a separate act of the legislature. If daily fantasy can’t pass, it would forestall greater opposition for single-game wagering.

Statewide online gaming could be an even more difficult challenge. In states such as New Jersey, online sportsbooks have been able to work around restrictions by housing their servers within casinos. Nebraska’s new horse racetrack-casinos could theoretically take the same approach, but this opens even more questions.

As politicians and courts debate the scope of sportsbooks, sports betting faces additional external political and legal obstacles. Barring legislation or direct court order, gambling opponents will likely challenge any sports betting options, as they have casino gambling for decades.

Nebraska Gambling Environment

Opposition from politicians and interest groups are much of the reason most gambling forms remain illegal in Nebraska — and why the 2020 gaming measures nearly missed the ballot.

Gaming proponents have pushed for Nebraska’s first commercial gaming facilities since voters rejected two separate ballot measures to do so in 2004. Secretary of State Bob Evnen rejected the latest ballot proposals earlier this year after ruling they were unclear to voters, but they were saved by a 4-3 Nebraska Supreme Court decision in September that ordered all three be placed on the 2020 ballot.

Keep the Money in Nebraska, a consortium of state gaming interests, has pumped more than $3 million into the “yes” campaign. But unlike other states such as Colorado and Arkansas, where recent voter-backed gambling referendums faced minimal organized opposition, Nebraska’s measure faces opposition headwinds.

Anti-gambling groups such as the Nebraska Family Alliance as well as Gambling with the Good Life have fought against the initiatives, arguing full-scale casinos would enflame social problems and cannibalize local revenues. As of October, opposition groups had reportedly raised nearly $140,000 for their campaigns, including $100,000 from Gov. Pete Ricketts and $5,000 from Tom Osborne, the former senator and Nebraska Cornhuskers head football coach.

Supporters point to lost revenues already crossing into neighboring states, saying that Nebraskans have wagered billions of dollars in Iowa alone since the state legalized casino gambling in the 1990s. Keep the Money in Nebraska projects Nebraska residents still spend nearly $400 million in out-of-state casinos each year.

This makes it all but impossible to prognosticate the ballot measure's outcome. Proponents have the financial edge, plus national attitudes are shifting toward expanded gaming options. However, Nebraska remains one of the nation’s most politically and culturally conservative states, trends that typically resist gaming, and opponent groups have several high-profile backers.

It also remains to be seen what this means for legal Nebraska sports betting. If the amendments are rejected, casino gambling and sports betting are likely years from reality. Approval creates an avenue for legal wagering but could also open a new front for legal and political battles, which could stall or thwart sports gambling in Nebraska for the foreseeable future.