The NCSL Blog

28

By Jackson Brainerd

It's no surprise that 2020 has left many feeling down on their luck.

ISlot machinet was a difficult year for the gambling industry, as all physical casinos had to shut down during the spring because of COVID-19, and it was a hard year for state lawmakers, who had to figure out how to balance budgets in the midst of an economic downturn.

As they head the polls to cast their votes, citizens in four states will consider measures to expand gambling opportunities, weighing the potential benefits of new state revenue and a more successful casino industry against the possibility of increased gambling addiction issues in their communities.

Nebraskans will decide if they want to join the 25 other states that have legalized commercial casino gambling. Initiatives 429, 430 and 431 would, in order, amend the state constitution to allow for the authorization of casino gambling at horse racetracks, authorize said casino gambling and create a new gaming commission to license and regulate it, and provide for a tax structure and allocation of revenues. The measures would establish a 20% annual tax on gross gaming revenue which is estimated to generate $65 million annually. Seventy percent of the new tax revenue would be dedicated to the Property Tax Credit Cash Fund, which is used for property tax relief, 25% will go to the host localities, and the remaining 5% will be split between the state general fund and the compulsive Gambler’s Assistance Fund.

Legal sports betting is now operational in 18 states and Washington, D.C., and two more states are looking to join the list. Question 2 in Maryland would authorize the State Lottery and Gaming Control Commission to issue sports and event wagering licenses to certain licensees in the state, presumably the handful of casinos or “video lottery facilities” that operate in the state. A fiscal note for the legislation estimated that the state could bring in between $7.3 and $18.2 million in FY 2022, assuming a 20% tax rate and depending on whether or not online sports betting is allowed. The revenue would be deposited in the state’s education fund.

In South Dakota, Constitutional Amendment B would legalize sports betting in the city of Deadwood, which hosts all of the state’s casinos. The state Legislative Research Council has estimated that sports wagering in South Dakota would generate $184,678 in new tax revenue, assuming a 9% tax rate that is currently applied to gross gaming revenue, and the money would be split between localities, tourism promotion, and the state general fund.

Finally, Colorado’s Amendment 77 would repeal constitutional betting limits and restrictions on the types of games that are allowed to be played in casinos and would leave it to voters in the small mountain towns of Black Hawk, Central City and Cripple Creek, which host all of Colorado’s commercial casinos, to approve new casino games and new bet limits. Two tribal casinos in Colorado aren’t affected.

Currently, Colorado casinos can only offer slots, blackjack, poker, craps and roulette. Individual wagers are capped at $100. There’s no specific estimate available as it is unknown what new betting limits and games the localities might approve, but there is the potential for a significant expansion of gambling as these towns would have the ability to remove all bet limits and approve new types of internet gambling, like online poker. (State voters approved online sports betting last year.)  Of the potential revenue generated, 78% would go to community colleges and the rest would go to the host localities.

Jackson Brainerd is a policy specialist in NCSL's Fiscal Program.

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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.