Nebraska football legend Tom Osborne continued his crusade to keep gambling on college sports from becoming legal during a legislative hearing in Nebraska Monday, but he was speaking against some very vocal advocates. The General Affairs Committee heard testimony on a bevy of gaming-related bills, including some related to legal sports betting, but didn’t vote after a nearly four-hour hearing.
Sean Ostrow on behalf of DraftKings made a plea for statewide mobile wagering, saying that bettors don’t want to travel to place bets or to register for online/mobile wagering, while Osborne argued that “the conversation is about money, not about who gets hurt” in his plea to keep sports betting out of the gaming equation.
Nebraska voters in November 2020 legalized a somewhat vague gaming expansion, and it is now up to lawmakers to craft a framework, but also to figure out just exactly what was legalized. Sports betting was not specifically named in the referendums, which legalized all “games of chance.” Sports betting is often characterized as a game of skill, but LB 560 seeks to define it as a game of chance, thereby making it legal.
Spirited discussion on both sides
Did Nebraska legalize sports betting? Well … it's unclear.
(by Jill Dorson)https://t.co/VELOC5PTRI
— Sports Handle (@sports_handle) November 25, 2020
There was spirited discussion on LB 560, with support coming from Nebraska’s horsemen, the Ho-Chunk Inc. (which represents the Winnebago Tribe), DraftKings, and one consultant. Most in favor of the bill asked for changes, such as expanding sports betting locations from racetracks only to also include casinos, and also to allow for statewide mobile/internet wagering. The current bill would legalize sports betting at brick-and-mortar racinos, allow for only the on-premise version of mobile betting, prohibit prop bets on college sports, set the operator application fee at $1 million, and set the minimum wagering age at 21. Three other bills were also up for discussion, including LB 561, also introduced by Briese.
The other bills, LR 26CA and LB 545, would allow for sports betting in more locations across the state. LR 26CA calls for a constitutional amendment that would go on the 2022 ballot. Those bills also define sports betting as a game of skill.
Those opposed to including sports betting in the definition of game of chance were Osborne and a psychologist who said “sports betting simply doesn’t fit.” Osborne went over the allotted three minutes for testimony, but he was not stopped, not did any of the lawmakers have questions for him. He’s long been opposed to legal wagering of any kind, and along with Omaha financial magnate Warren Buffett, lent his name to a campaign to convince voters not to legalize.
Osborne: Biggest threat … is ‘what happens to our kids’
On Monday, Osborne pointed to protecting kids as his main focus.
“The money that would go to groceries, goes to gambling,” he said of people who have gambling problems. “The money that would go to rent … or to a college education, goes to gambling. The biggest threat I see in the United States today is what happens to our kids. They don’t need one more thing thrown at them.”
'Pretty special' for Darin Erstad and Tom Osborne to enter Nebraska Athletics Hall of Fame together https://t.co/YUNMRjOIBI #Huskers pic.twitter.com/dht5RL5hs9
— World-Herald Huskers (@OWHhuskers) September 8, 2018
Bill sponsor Tom Briese argued that voters “overwhelmingly” approved games of chance, and that by limiting wagering to racetracks and not allowing patrons to fund accounts with credit cards, his legislation is fairly “restrictive.”
“I think that reflects Nebraska’s values,” he said. “I trust the regulatory process to make sure that that tone continues.”
Sen. Justin Wayne spent considerable time early in the hearing arguing that the “restrictive” nature of the bill makes it exclusionary.
“This bill locks [sports betting] into the tracks. The industry itself is excluding people,” he said. “Your people and my people have been excluded so many times, I don’t know why we are supporting this.”
Wayne was responding to testimony from Lance Morgan, president and CEO of Ho-Chunk Inc., who said he doesn’t think of sports betting as a “geographic or racial situation.”
How much? Fiscal note estimates $455M in GGR
A bigger concern that got some attention is how much Nebraska stands to benefit financially from sports betting. According to the fiscal note, Nebraska sportsbooks would “generate $455 million in gross revenue” in FY 2022-23. Based on a 20% tax rate, that means the state would get $90 million.
With a population of 1.94 million and sports wagering limited to racetracks with no statewide mobile, that number seems out of whack. For comparison, Indiana sportsbooks (population: 6.7 million) had taken in about $180 million in GGR by December 2020 since launching sports betting in September 2019. The state offers statewide mobile/online wagering. Mississippi (population: 3 million) has essentially the same setup being proposed in Nebraska, and operators there took in GGR of about $103 million between opening in August 2019 and December 2020.
Consider these comments on the projected revenue:
“If you’re going to generate $455 million in gross gaming revenue in the second half of the biennium, I’ll sell you my oceanfront property in Las Vegas,” said Global Market Advisors partner and Nebraska native Brendan Bussmann in his testimony.
Said Sen. Tom Brewer: “When I saw the $455 million, I thought for sure we had mixed some of our marijuana with our gambling.”
Bussmann also noted that the current legislation needs “a little more meat on its bones,” including making sure the regulatory process brings key players to the table and that sports betting is shaped in a way designed to bring the “best and most” operators into the state.
From here, lawmakers will continue to discuss sports betting, and it’s likely that several amendments to the bills will be filed.
Nebraska’s legislature meets for 90 days in odd-numbered years and is set to adjourn on May 28.
