Omnibus gaming bill clears first round

Lawmakers amended and advanced a bill March 16 that contains several updates to Nebraska gaming law.

LB775, sponsored by Sen. John Lowe of Kearney, would make changes to state law related to racetrack casinos under the Nebraska Racetrack Gaming Act. Lowe said the bill was a part of a continuing effort to “tweak” state law relating to the relatively new industry.

As introduced, the bill would update the definition of licensed racetrack enclosure, which currently is limited to the premises at which licensed live horse racing is conducted. The bill would expand that definition to include all real property licensed and used for the conduct of a race meeting, including the racetrack and any grandstand, concession stand, office, bar area, employee housing facility, parking lot or additional area designated by the commission.

LB775 also would grant the commission authority to recommend necessary changes and updates to state law administered by it, in much the same way that the Liquor Control Commission recommends legislation related to the Nebraska Liquor Control Act.

Finally, the bill would grant the commission authority to create an adjudication subcommittee to investigate and respond to violations of the Nebraska Racetrack Gaming Act.

Lowe offered an amendment on behalf of the General Affairs Committee that would add the provisions of three additional bills: LB72 and LB73, both sponsored by Grand Island Sen. Raymond Aguilar, and LB232, originally introduced by Omaha Sen. John Cavanaugh.

Bayard Sen. Steve Erdman made a motion to divide the question and consider the last bill contained within the committee amendment separately. The motion was successful.

The first component of the divided amendment, adopted 37-1, contained the provisions of LB775, LB72 and LB73.

Provisions of LB72 would amend the County and City Lottery Act by establishing that gross proceeds do not include any admission costs collected at any location where the lottery also is available to the public free of an admission charge.

Lowe said Fonner Park in Grand Island currently does not offer keno in the clubhouse because, under current law, revenue raised from admission to the clubhouse would be considered part of the gross proceeds of any keno played there.

Provisions of LB73 would allow funds from the County Visitors Promotion Fund to be used to improve a facility in which parimutuel wagering is conducted if the facility also serves as the site of a state fair or district or county agricultural society fair.

Currently, Fonner Park cannot use funds from the County Visitors Promotion Fund because it is home to the Nebraska State Fair, Hall County Fair and other events, Lowe said.

“The Fonner Park campus is one of the most significant drivers of tourism in Hall County,” he said. “Access to the funds would allow Fonner Park to expand, improve or [build] upon their existing grounds.”

The second component of the divided amendment would authorize the sale of digital keno tickets for players verified to be on the premises of a licensed Nebraska lottery location. Currently, keno tickets are available only in paper form.

Under the amendment, a lottery operator would be required to file with the state Department of Revenue and provide clear procedural regulations in order to sell digital on-premises tickets. All regulations would be subject to approval by the department.

The proposal also would authorize the use of additional ticket payment methods, including a debit card, bank account, prepaid cash account or the cash balance of a payment application. Debit cards would be limited to $200 in keno wagers from a lottery operator in a single calendar day.

“[This] is the result of a compromise that takes into account the constructive criticism of the folks who came in and testified in opposition,” Cavanaugh said. “There was some concern about allowing people to attach a debit card to this account and run up a huge amount in a day, so we’ve limited the total dollar amount to $200 per day.”

Cavanaugh said the changes would be optional for keno operators and the sale of tickets through an application would be restricted to a lottery location by geofencing, which establishes a virtual boundary around the operator’s physical location. The provisions would modernize keno, he said, so that municipalities can better compete with casino gaming in Nebraska.

Erdman opposed the amendment, saying he wasn’t sure what problem it was trying to solve. While laws relating to racetrack casinos needed updated, he said, the need for electronic keno ticket sales was unclear.

North Platte Sen. Mike Jacobson supported the amendment, saying it meets his goals of smaller, less intrusive government. The amendment would allow keno operators to modernize their operations and use their resources more efficiently if they choose to do so, he said.

“We’re asking to move from crayon and a piece of paper to being able to use an app,” Jacobson said. “Let’s get out of the way of the people’s interest; let’s quit restricting local control.”

The second portion of the divided amendment initially failed on a 21-17 vote. Twenty-five votes were needed.

Cavanaugh made a motion to reconsider that vote, saying members may have been confused regarding which provisions were under consideration. The motion was successful. A second vote was taken on the amendment, which was adopted 32-12, and lawmakers voted 33-6 to advance LB775 to select file.