Nebraska state Senator Tom Briese recently introduced LB 685 to help curb the spread of so-called games of skill popping up in convenience stores, bars and supermarkets across the state.
Briese’s bill would increase the fees per machine to $1,000 each, tax net proceeds at 20 percent and shift regulation from the state Department of Revenue to the state Racing and Gaming Commission. Briese said, “I’m not here really to pass judgment on these machines. I think my intention here is simply to tax them in the name of property tax relief.”
More than 3,600 of the machines currently can be accounted for in Nebraska, according to Department of Revenue figures. Omaha has 239 and Lincoln has 137.
“All these gray area machines have proliferated absolutely everywhere and they’re now next to every church and school in the community. They don’t pay any taxes. They don’t have any regulations to speak of. And they’re spreading out of control. They need to pay the taxes like we do. They need to pay for the oversight of them,” Lynne McNally, chief executive officer at the Nebraska Horsemen’s Benevolent and Protective Association (NHBPA), told local outlet KETV.
McNally explained the NHBPA partners with Ho-Chunk Inc. to operate the Warhorse Casinos in Omaha and Lincoln, which has had to post $5 million in licensing fees and pay a tax of $500 per machine. “Every dollar that goes into our machines, 20 percent goes into the property tax relief fund,” McNally said.
John Fox of American Amusements of Bellevue stated his company’s games should not be compared to slots. “They are games of skill,” Fox told KETV. “The player controls the outcome. They are not gambling devices. In a game of chance, chance controls the outcome or the machine controls your outcome. In the case of what we do, the player has control over what they get.”
Fox said the proposed tax increase would hurt his company as well as other businesses and charities that have installed the games. “They need sources of income,” Fox said.
American Amusements lobbyist Kent Rogert told KETV, “You’re increasing the application for a machine fee by double. You’re increasing the annual sticker by quadruple and you’re taking an occupation tax that is $35 and making it $1,000. And then you ‘re going to put an additional 20 percent tax on the revenue from the machine.”
Rogert emphasized the proposed tax would impact charitable organizations the most. “It would kill their profits and it would probably stop the use of them,” he said.
He noted businesses currently pay income tax on revenue from the machines and have paid nearly $1 million dollars over the years. “So we’re not paying no taxes. We’re paying a lot of taxes already.”
He said Briese’s measure also would allow the Gaming Commission to regulate pool tables, dart boards and jukeboxes. “We are moving non-gambling devices to a gambling agency to be overseen,” Rogert said.
