The Nebraska Racing and Gaming Commission approved rules for casinos at the state’s horseracing tracks on December 17. But Nebraska Attorney General Doug Peterson and Governor Pete Ricketts still must review the rules, and the legislature has to pass a racino bill.
Chris Kotulak, CEO at Fonner Park in Grand Island, said he expects that to happen by the end of February. At that point, Kotulak said, a temporary gaming facility could open within four months at Fonner Park. That facility would be used for two years while the $200 million Grand Island Casino Resort at Fonner Park is under construction. Iowa-based Elite Casino Resorts will build and manage the venue.
Kotulak said, “At this point, while the pace has not been as fast as some would have liked, I am very satisfied with the pace of where we are right now. We had plans in place to start in December until we realized we were going too fast for what was actually happening and what wasn’t happening.” Kotulak added, once everything falls into place, “then we are poised to start construction with Mother Nature then being one of the largest obstacles.”
Kotulak said the temporary casino will be “the most beautiful metal structure you’ve seen with neon and plush carpet and chairs and parking. It will be gorgeous, as gorgeous as a metal structure can be.”
Elite Casino Resorts Regional Vice President Sharon Haselhoff, general manager at Grand Falls Casino and Golf Resort in Larchwood, Iowa, will manage the Grand Island Casino Resort at Fonner Park. She said the Nebraska Racing and Gaming Commission “has had a very thorough approach on how they’ve done things and we are just ready for that next step, once it’s there.”
She noted that currently, Nebraska casino operators must pay a $1 million fee for a 20-year gaming license. However, she said, that amount and other rules could before lawmakers give their final approval.
Meanwhile, some of the tax revenue paid by casinos in Nebraska will go towards property tax relief. No issue there. But how about using tax-increment financing (TIF) to help build casinos?
State Senator Mike Flood introduced a bill on January 5 to prohibit redevelopment plans of casinos and racetracks using TIF.
According to the Omaha World-Herald, city council members in that city, by a 6-1 vote, authorized up to $17.5 million in the financing to turn Horsemen’s Park into a casino, racing and entertainment complex.
In 2020, Nebraskans passed legislation that required casinos to pay a 20 percent tax on gross gambling revenue, with 70 percent of that tax earmarked for the state’s property tax credit fund. That fund offsets a part of property tax bills.
Flood said Nebraskans have a vested interest in poor areas being redeveloped. “That’s the goal of TIF, to attract private development to blighted and substandard areas in which development otherwise would not happen.”
The developers’ infrastructure improvements are subsidized with property tax dollars. Municipalities, school districts, counties, community colleges, ag societies and others give up that revenue for up to 15 years, with other taxpayers picking up a larger share of the local tax burden, he said.
To subsidize development with property taxes, the development must be blighted where TIF makes a good trade-off.
“Using TIF to subsidize the construction of a multimillion-dollar casino on the backs of taxpayers, in my opinion, is just wrong and should be illegal,” Flood said.
The casinos in Nebraska are going to happen without TIF, he said.
“Nobody when they went to the ballot box in Nebraska thought, ‘We are going to need TIF to make sure that we have casinos,’” Flood said.
Omaha approved $17.5 million in TIF incentives for the casino there.
“There’s no question there’s going to be a casino in Omaha,” Flood said. “It’s likely the legislature is going to put restrictions on how many casinos you can have in the state, and so the casino inside Omaha is going to make money regardless of whether it gets TIF or not.”
“Reasonable people can disagree on whether casinos will be a positive or negative force in Nebraska,” Flood said, “but whatever your views on gambling, I think we can all agree that taxpayers have no place providing millions of dollars in property tax subsidies for casino development.”
