New 5% tax on skill games takes effect in Nebraska

A new tax on skill games took effect at the start of the month.

The 5,800 mechanical amusement devices registered in Nebraska are now taxed at 5% of their net operating revenue, thanks to a law passed last April.

These devices are found in gas stations, cafes and social halls and are used for contests of skill, unlike keno or bingo. Fraternal organizations are exempt from the tax.

Of the tax revenue, 40% will go directly to the property tax credit cash fund, 10% will go to the Nebraska Tourism Commission Promotional Cash Fund, and 20% will go to the Charitable Gaming operations Fund.

Other revenue will be split between the state’s General Fund, the Compulsive Gamblers Assistance Fund and the cities and counties where the devices are located.

Brian Rockey, the director of Nebraska’s Charitable Gaming Division, said he won’t have concrete numbers on the revenue raised from the tax until October. He said operators of the machines have until July 15 to connect them to the state’s central server so they can be taxed. Otherwise, they will have to cease operations.