A fiscal officer in Nebraska is taking issue with oversight of the state’s casino tax revenue.
State Auditor Mike Foley has described oversight of tax revenue by the state’s Racing and Gaming Commission as “lackluster at best and oftentimes completely nonexistent.” Foley has declared the commission’s effort to oversee casino tax revenue as lackluster following a new audit report that details revenue for the fiscal year ending June 30. The fiscal period marks the first full year that Nebraska racetracks have offered casino gambling.
In the year-to-date, the facilities have collected $18.8 million in gaming tax revenue. Nebraska law calls for the commission to tax gross gaming revenue at a 20% rate.
Auditor concerned about casino revenue documentation
Foley believes there may be discrepancies in the reported casino tax revenue received by the state due to a lack of documentation by the commission that verifies the proper amount of allocated revenue. The auditor has made this assumption despite Nebraska’s gaming regulator requiring the submission of weekly, quarterly and annual audit reports.
State auditors have found inconsistencies in the actual casino tax revenue generated by horse racetracks compared to projections by independent audit reports. For example, WarHorse Casino Lincoln missed tax revenue expectations by $279,064 in the recent report while Harrah’s Columbus Racing & Casino surpassed projections by $76,184.
The Racing and Gaming Commission uses weekly audit reports from casinos to determine its monthly tax amounts but has failed to properly verify how tax revenue is allocated.
“Without such a basic level of understanding, the commission was woefully unprepared to ensure, with any level of confidence, that the authorized gaming operators were paying the appropriate amount of gaming taxes,” said auditors in Nebraska’s most recent report.
In response to Foley’s claims, the commission has added additional staff to its financial team after only having one person handle all responsibilities. The commission has also enlisted the help of other regulators to provide education on the finances of gaming.
Failure of online wagering in Nebraska
The state’s casino tax revenue is under fire after failing to authorize online sports betting.
Earlier this year, Nebraska ended a special legislative session without considering LR3CA, a measure that proposed to amend the state’s gaming act to allow online sports wagering.
The bill proposed that up to 90% of revenue be allocated toward property tax relief.
Lawmakers in Nebraska will have to wait until early next year to submit new measures for regulated online sports betting as the state does not carry over bills into new legislative years. Nebraska’s next legislative session will run from January 2025 to May 2025.
