Debate rages over extent of gambling in Nebraska

Kevin O'Hanlon

Tuesday, Dec. 11, 2001 | 9:25 a.m.

Governor battling tribe, bar owners on proposed constitutional amendments

LINCOLN, Neb. -- Gov. Mike Johanns sees the cars streaming across the Missouri River from Omaha to casinos in Council Bluffs, Iowa.

He knows slot machines there and in neighboring Missouri, South Dakota, Colorado and Kansas lure thousands of Nebraskans each year to spend millions of dollars outside their home state.

He's heard criticism that Nebraska is losing out on a bonanza by not allowing casino gambling.

He wants no part of it.

"If Iowa wants to hold itself out as a great place to gamble, and South Dakota wants to hold itself out as a better place with bigger, better, faster casinos, I wish them well," he said. "I've just never believed you build an economy on that."

Nebraska has one casino -- operating illegally by the Santee Sioux Tribe on its reservation in the northeast corner of the state. The state and tribe are wrangling in court, and a measure (LR6CA) pending before the Legislature would ask voters to amend the state constitution to allow casino gambling on Indian reservations.

A group of bar owners also are circulating petitions to change the state constitution to allow video slot machines in bars and some restaurants. If 110,000 valid signatures are collected by early July, voters will decide the issue in November.

"Gambling dollars could do a lot of good for this state," said Joe Young, owner of Omaha's Choo Choo Bar and Grill and leader of the petition drive.

Young says Nebraskans need only look to Iowa to see the benefits of casino gambling.

Iowa has allowed casinos since 1989 in the 10 counties where voters approved riverboat gaming referendums. Gambling has become the fifth-largest source of money for the state treasury, said Bill Hansen, chairman of the Iowa Racing and Gaming Commission.

Iowa's three race track casinos and 10 riverboat casinos are expected to generate $194 million in state taxes this year.

Johanns said casino-style gambling is different from wagering sanctioned by Nebraska -- the lottery, keno, horse racing, bingo and so-called "pickle" cards sold by nonprofit groups.

"It's one thing to walk through the grocery store line and buy a lottery ticket. But video slots is a different thing," he said. "It's an enticing game. It's more addictive."

That logic angers Omaha Sen. Ernie Chambers, who has tried to abolish the state lottery.

"If the governor is in favor of the state lottery ... he ought to wear big red letter "H" for hypocrite," Chambers said. "What he is trying to do is to protect those people who already have staked out there territory.

"It's like the mob," Chambers said. "You stay on this side of the street. I'll stay in this side of the street."

Chambers said it is abhorrent that the state must advertise to get people to play the lottery -- especially when more people are reporting gambling addictions.

"The state ... dangles before the public the most damaging kind of misleading scam around," he said. "They are trying to give people the idea that all of their problems can be solved and their dreams can be realized if they just spend their last nickel on this gambling operation run by the state."

It was with voter approval in 1992 that Nebraska became the 37th state to offer a lottery. Since then, the state's total lottery sales have reached more than $571 million.

Of that, more than $309 million has been paid out in prizes. In addition, about $139 million has been won by people in the multistate Powerball game, some of whom are being paid via annuities over time.

Under state law, 25 percent of lottery sales go to special funds to help public education, improve the environment and fight compulsive gambling.

To date, those funds have received a total of nearly $150 million.

Chambers and other critics stress that as gambling has expanded, so have problems associated with it.

Pat Loontjer, executive director of Gambling With the Good life, called video slot machines "the crack cocaine of gambling."

More than 5 million Americans are pathological or problem gamblers, and 15 million more are at risk of becoming just like them, according to the National Gambling Impact Study Commission. An estimated 3 percent to 7 percent of gamblers become problem gamblers.

Young said Nebraska will always have problem gamblers, no matter what form of wagering is allowed.

"We've already got the problem gamblers. We just don't have any of the benefits," he said. "We wouldn't have keno or the lottery if the cities and the state weren't seeing any benefits from them."

Charitable gambling -- including pickle cards, bingo and raffles run by nonprofit, fraternal, veterans and church groups -- for example, brought in some $6 million in tax revenue to the state last year.

Not all forms of gambling are flourishing, partly because of so many ways to do it.

Forty states and the District of Columbia run lotteries. Twenty-three states allow commercial casinos and 11 states have tribal casinos. Forty-one states allow pari-mutuel wagering on horse and dog races, and 47 states and the District of Columbia allow charitable gaming.

Money wagered on charitable gaming in Nebraska decreased to $265 million last year, the sixth straight annual decline and more than a third below the 1994 peak of $408 million.

Young, however, is convinced casinos could be a boon.

Under his group's plan, the state would get 45 percent of profits from video slot machines, using the estimated $60 million a year to provide higher salaries for public school teachers and property tax relief. Bar owners would keep 55 percent of the profits.

Young also points to other potential benefits.

Iowa's casinos, excluding those run by tribes, report having more than 10,000 employees with a total annual payroll of more than $200 million.

The casinos also claim more than $100 million in annual purchases from Iowa suppliers and millions of dollars annually in charitable contributions.

A poll done last year for the Omaha World-Herald indicated 51 percent of Nebraskans surveyed favored casino gambling across the state. In 1996, a similar poll showed 61 percent supported casinos.

Wes Ehrecke of the Iowa Gaming Association said that Nebraska, in effect, already has casino gambling considering estimates that 65 percent of money spent at Iowa casinos is from out of state -- much of it from Nebraska.

"In many respects, when you look at the whole metro area of Council Bluffs and Omaha, the state line has become somewhat imaginary," he said.