Casino Gambling at Nebraska Race Tracks on Nebraska Ballots
By Bill Kelly , Senior Producer/Reporter Nebraska Public Media
Oct. 19, 2020, 5:08 p.m. ·
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The ballot question that would legalize some casino gambling in Nebraska wouldn't just change the law. It would make it a constitutional right in the state.
Gambling has a long history in the state. The first wagering on horse races started in 1935. Millions of dollars in state lottery proceeds have funded state government since 1994.
For years opponents of gambling successfully blocked the casinos from setting up shop. This election could be the year when the barriers fall. Not only are voters being asked to allow casinos at six or more horse racetracks, but it would also give gambling the protection of the state's constitution.
three separate questions on this ballot
- Should it be legalized?
- Should we set up the system to regulate it?
- Should the state create a method to tax the profits?
Supporters of casino gaming hope you will vote 'yes' on all three.
"Seventy percent of Nebraskans are within 60 miles of a slot machine today," estimated Lynne McNally, representing the Horseman's Benevolent and Protective Association. "I think a lot of people think, 'hey, you know what, they've got gaming and all these other states (and) the sky hasn't fallen in. Why don't we offer this as an option and keep the tax revenue here?"
Long-time anti-gambling advocate Pat Loontjer urges a no vote on all three questions "because once we change that constitution, Nebraska will never be the same."
Her group Gambling with the Good Life gets much of the credit for stifling earlier efforts to bring casinos to the state.
"It'll be a change in our quality of life," she told a recent news conference. "It'll be a change for our children and our grandchildren, and we just can't let that happen."
At its most basic, the arguments boil down to how you feel about three questions, and they aren't the same questions spelled out on the ballot. Here's the first.
Do you want Gambling in Nebraska?
Testifying at a public hearing, opponent Glen Andersen of Blair could not have been more emphatic.
"There is no product or service of value that is received by the person gambling, the only possible good outcome for the gambler is winning money," Andersen said, speaking at a public information session held by the Secretary of State. "But the house cannot allow that to happen consistently. The house must always end up winning. Isn't this pretty much the definition of predatory theft? Truly commercial gambling represents a moral dark side of society."
The medical and social service community has come to recognize gambling addiction as a disorder harmful to those unable to control the impulse.
Beyond the problem gambler's issue, in 2018 the Gallup poll found 69% of Americans labeled gambling as morally acceptable.
"I think the overall climate across the country has grown to accept that," said Drew Niehaus, speaking for Keep the Money in Nebraska, the sponsor of the petition drive which got the issue on the ballot. "There's a reason that massive corporations actually owned some of those casinos out there because they see that this is just entertainment, and really, nothing more."
Do you believe the gambling revenues will offset the costs of the problems that will arise?
Millions of dollars are at stake. Everyone agrees on that point, but the estimates differ, which also means the state's potential benefits are up for debate as well.
In their campaign materials, proponents rely on data from the State of Iowa that estimates Nebraskans have anted up as much as $400 million a year to Iowa-based casinos. In this argument, perhaps a more realistic data point is the amount paid in taxes.
"Nebraskans are filling Iowa's coffers to the tune of almost $90 million every year," Niehaus claims.
One of the most prominent selling points used in the campaign can be found in one of the ballot questions.
"The way Initiative 431 is written is that it secures 70% of the tax revenue to go directly into the Property Tax Relief Fund," he said. "Regardless of how much that actually ends up being, whether it's from one casino or all six, once they're up and running, it's guaranteed revenue to fund that property tax relief."
Governor Pete Ricketts, the state's most vocal advocate for property tax relief, opposes using gambling money to fund government services and doubts the reality of tax relief.
"Don't believe what you're being told because it's not going to happen. You're not going to see the tax relief," he said at a press conference organized by gambling with the Good Life. "The money is going to go in the pockets, the casino operators."
"If you hear the phrase 'keep the money in Nebraska,' it's a lie, folks."
According to McNally, some of the same arguments arose when the state lottery was proposed in the early-90s.
"People would say it wasn't a stable form of revenue," she told NET News. "Go back and take a look at the annual report of the Nebraska Lottery in the last 25 years that it's existed. It's been a very stable source of revenue, and it's climbing upwards every year.
According to the 2019 Nebraska Lottery annual report, the organization passed on $45 Million to the educational and environmental programs it supports. Since selling the first ticket in 1993, proceeds approached $694 Million.
Opponents also claim the economic benefits are exaggerated, and the social costs outweigh the additional money landing in state treasuries.
A 2019 review of data done by Creighton University economist Ernie Goss claims to indicate that, for the period analyzed, "casino states spent more on state and local government activities, taxed their citizens more heavily, and experienced slower GDP growth." (GDP is the monetary value of goods and services produced by a state.) The study was not peer-reviewed or published in an academic research journal.
Governor Ricketts claims the impact on the quality of life will be "detrimental."
"It's going to be damaging to our families. When you see gambling come in, you see increased child abuse, spousal abuse, increase embezzlement. We've seen that here in Nebraska, even without the casinos," among problem gamblers playing in neighboring states.
Research weighing the social costs of gambling against the benefits has been contradictory.
As for the economic benefits, casino developer Lance Morgan, apply the same formula to any new business opportunity in the area, Claiming "that's what capitalism is all about."
"The more you can spend $1 in a community, the more it benefits everybody else, not just directly the businesses, but all the ancillary businesses that services."
Morgan spent heavily to get the measure on the ballot and in the campaign to get it passed.
Do you want gambling to support the horse racing industry?
This third question is unique to this set of ballot questions. If passed, casinos will only be allowed to open by operators of the state's thoroughbred racetracks. There are currently six in the state. No current law or regulation limits the number of tracks. Industry representatives believe the cost of opening new facilities and market forces keep casinos from proliferating.
Loontjer remains skeptical.
"It's a lie that's being promoted that the casinos will only be at six licensed racetracks," she told the news conference, adding the amount of racing in Nebraska is already limited, meaning "in order to have a license for casinos, all you have to do is run one race a year," and that might suffice for some gambling houses.
It is true that currently, one race a year is the only thing keeping the Nebraska horse breeders in business, but the racetracks say that's the whole point of these ballot questions. They want the ability to run more races with more thoroughbreds.
Chris Kotulak, CEO at the Fonner Park in Grand Island, said, "having casinos at the existing racetracks in Nebraska will allow Nebraska horse racing to be more competitive with the adjoining states."
The steep decline in the popularity of thoroughbred racing in Nebraska reduced the number of races, the pay-outs, the amount of tourism, and the number of horse breeders.
Morgan, who hopes to partner with a racetrack through his company Ho-Chunk, Inc, promises profits from gaming tables would subsidize the prize money for horse races.
"If you have higher purses, you're going to get more incentive for people to raise more horses to move some of that industry back here." That, he adds, would add jobs in agri-business in the state since "they've got to be trained, they've got to be fed, and they've got to be raised."
If there is any concern in the racing community, it's the risk of over-saturating the market if new tracks are placed close to the existing six. According to Kotulak, that would be too much gambling in a limited market to the detriment of the other race facilities.
"I certainly am not a proponent of thoroughbred racetracks or any sort of horse racing popping up in Nebraska at every county fair, or really even any additional racing venues," he said.
That's the ultimate question for voters: how much gambling is too much and do casino games have a place in Nebraska?