A Lincoln-based keno operator who was convicted of illegally extending credit for bets has begun closing or divesting from operations in 27 Nebraska communities as part of a tentative deal with state regulators.
Zeilinger Keno will continue to operate three Lancaster County locations — in Hickman, Roca and Sprague — as part of the consent agreement, which should be finalized in the next two weeks, said Aaron Hendry, legal counsel for the Nebraska Department of Revenue's Division of Charitable Gaming.
And Todd Zeilinger will still offer keno under a different business at the Daily Double Steak House in Denton, one of the first keno establishments in Southeast Nebraska.
His sons will also continue to run five keno outlets in Gretna, Zeilinger said Tuesday.
His other locations are expected to change hands or close by Dec. 31.
Zeilinger fought the allegations until this summer, when the burden became too great, he said. "I just wanted to put it to rest and be done with it."
He pleaded no contest in September to a single count of extending credit for lottery tickets, a misdemeanor first offense, in Clay County. District Judge Vicky Johnson sentenced him to 12 months' probation, and ordered him to complete 20 hours of community service and pay a $1,000 fine.
His deal with the Revenue Department is part of a separate, administrative procedure.
As written, that agreement would require Zeilinger to pay an additional $100,000 fine, Hendry said. Lawyers are still working out the language, including the degree to which Zeilinger would admit any wrongdoing.
He says he didn't know bar employees in Sutton and Utica were placing bets on credit. State officials disagree, and accused him of violating numerous other rules governing payout of prizes and bookkeeping, according to a motion for an administrative hearing on his licenses.
The document accused Zeilinger of covering for the people who placed the illegal bets and says he made at least $179,416.05 in commissions off the wagers.
His tentative agreement with the state will allow him to keep running keno close to home. In most other cases, ownership has been turned over to another operator.