Bill to raise cash- and amusement-device fees draws industry pushback

The Department of Revenue asked the Revenue Committee to adjust fees tied to cash devices (skill games that award cash) and mechanical amusement devices, citing inspection costs and the need to index fees for inflation. Nolan Lemna presented LB890, which would raise the manufacturing/distributor application fee to $650 (effective 1/1/2027, then indexed), increase distributor decal fees from $250 to $350, and raise the occupation tax for mechanical amusement devices from $35 to $70 while shifting 20% of that revenue into the Department of Revenue Enforcement Fund.

Brian Rockey, director of the Nebraska Lottery and Charitable Gaming Division, said inflation adjustments will help manage program costs without creating larger general-fund impacts in future years. He told the committee recent actual device revenue exceeded initial estimates, justifying updates and indexing.

Small operators and distributors warned of disproportionate harm. Jarvis Nettles, who operates small amusement and cash devices, described thin margins on certain arcade and redemption games and said repeated replacement and decal fees can accumulate; he said the proposed increases — when applied across devices and application cycles — could add thousands of dollars to his annual costs and "pretty much put me out of business." Committee members asked whether swap or replacement rules might reduce the burden; witnesses proposed options such as allowing decal transfers when a board or component is replaced.

The committee heard no formal opposition letters beyond industry comments but received detailed operational examples that illustrated the distributional impact of indexed fee increases. No committee action was taken during the hearing; staff offered to consider technical fixes to address small-operator concerns.