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Lawmakers weigh tighter rules and higher taxes for cash 'skill' devices amid rapid growth
Summary
LB920 would raise taxes and impose age‑verification, supervision and marketing limits on so‑called cash devices (skilled games) following an interim review showing rapid growth and higher‑than‑expected revenues. Operators warn higher taxes and strict rules could harm small businesses; problem‑gambling advocates favor stricter oversight.
Senator Ashley Spivey, D‑District 13, told the committee LB920 is a response to rapid growth of cash devices in Nebraska — roughly 6,000 devices statewide across most counties — and to gaps in age verification, supervision and marketing. The bill would increase the skilled‑games tax, require in‑person supervision (beginning in 2026) and phased electronic age verification (by 2028), tighten advertising limits, and give the Department of Revenue enhanced enforcement authority.
Sponsor’s case: Spivey said her interim LR found industry revenue has outpaced original projections and that many devices are located in ordinary retail settings — laundromats, gas stations, vape shops — where minors and vulnerable people can encounter them casually. "These devices are widely accessible... the casino tax rate is about 20%. We have skilled games at 5%," she said while framing a proposal to increase the tax and direct parts of revenue to childcare, behavioral health and enforcement.
Public‑health advocates: Problem‑gambling groups and public‑health proponents urged stronger safeguards and higher taxation. David Geier of the Nebraska Gambler Assistance Program highlighted evidence from vendor materials showing programmed payback ranges and argued that payout schedules, not player skill, drive much of outcomes in practice.
Industry and operator opposition: Distributors, host‑business owners and former negotiators of the 2024 framework strongly opposed a large immediate tax increase and some technical mandates. Industry witnesses said many host businesses operate on slim margins and that the effective current cost (5% tax plus central‑server fees and other charges) can approach 9%; they warned that increasing statutory taxes and compliance duties could force closures, layoffs or push activity back into unregulated channels.
Legal and technical history: Former Senator John Lowe and other witnesses described LB685 (2024) as a negotiated modernization that brought many operators into a regulated system; they cautioned that dramatic post‑implementation tax hikes or unproven technology mandates risk destabilizing the regulated market.
Committee direction: Senators asked detailed questions about who bears the burden of revenue changes, how enforcement would be funded and whether technological age checks are practical. Spivey said she would file targeted amendments to adjust fee allocations to ensure enforcement and to refine marketing and supervision requirements before further committee action.
