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Two years after Nebraska voters had their say, first casino set to begin netting tax revenue

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When gambling supporters were campaigning in support of a ballot initiative to legalize casinos at Nebraska's horse tracks, they touted potential property tax relief of more than $45 million a year.

That's based on a 20% tax on estimated casino revenue of $325 million annually, 70% of which is to go to the state's Property Tax Credit Fund.

Of course, that revenue estimate is based on up to six fully operational casinos across the state with slot machines, table games and sports betting, something that's still a year or two away.

But starting Saturday, casino gaming at the temporary WarHorse Casino at the Lincoln Race Course will add some tax revenue to both state and local coffers.

It's hard to estimate how much money will roll in without knowing how many people will go to the Lincoln casino to play its 433 slot machines.

The closest comparison would seem to be Harrah's Council Bluffs Casino and Hotel, which, according to the Iowa Racing and Gaming Commission, had 465 slot machines in August.

Gamblers poured $51.4 million into slot machines at Harrah's last month, which paid out just under 90% in winnings, leaving revenue of about $5.4 million for the month.

It's not clear whether WarHorse Lincoln's temporary casino can generate anything close to that number in its first month — or any month — but if it did, it would produce more than $1 million in tax revenue, more than $750,000 of which would go straight to statewide property tax relief.

The rest of the tax money gets split up as follows: 25% to the city and county where the casino is located, split evenly; and 2.5% each to the state's general fund and Compulsive Gamblers Assistance Fund.

In Lincoln, that would potentially mean an extra $270,000 per month for the county and city to split, although neither entity has included any of that revenue in their budgets.

County Budget and Fiscal Officer Dennis Meyer said the county did not include any potential casino tax revenue in its fiscal year 2023 budget because of the uncertainty surrounding when it would open.

Meyer said any taxes from casino revenue collected in the county's fiscal year will be banked, and the County Board will incorporate the money into the following year's budget.

"It's kind of a wait-and-see situation right now," he said.

It's a similar situation with the city, which did not include any potential casino tax revenue nor do any planning for it in either its 2023 or 2024 budgets.

City Budget and Administrative Analyst Sherry Wolf Drbal said that was because "we didn't have very good information" on when taxes would be collected. The city's fiscal year began Sept. 1, so it will have nearly a full year of casino tax collections to supplement this year's expected budget revenue.

The fact that it's taken nearly two years for the first casino to open after voters approved them means the state has lost out on millions in tax revenue, a fact that's not lost on supporters and even some opponents.

State Sen. Tom Briese, who is a longtime opponent of expanded gambling in Nebraska but also a staunch supporter of property tax relief, sent a letter to the Racing and Gaming Commission earlier this month reminding members of their duty to enact the will of the voters and to do so as soon as possible.

"As an elected official, and chair of the General Affairs committee, it is my obligation to ensure that the will of the voters is implemented in a timely manner," Briese wrote. "Similarly, as officials appointed by the Governor to carry out the laws passed by the legislature and the voters of Nebraska, it is your responsibility and duty to implement these laws efficiently and without unnecessary delay."

The Racing and Gaming Commission, after postponing a scheduled vote last week, is now set to vote Friday on approving the state's first permanent casino license.

Briese, who's from Albion, wrote that there's "an expectation that gaming licenses shall be issued as soon as possible, provided all current regulatory and statutory requirements are met by applicants."

He noted that his office has been getting calls from constituents "who have expressed the belief that the government is dragging its feet with regard to allowing the casinos to open."

Any further delay by the commission or its staff "will only intensify this belief, and will be cause for concern in the upcoming legislative session," Briese wrote.

Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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