Nebraska casino oversight faces growing pains

The low-key state agency in Nebraska that oversees casinos is coming under increased scrutiny as casinos within the state grow in popularity.

A state legislator in the is advocating for increased governor supervision over the Nebraska Racing and Gaming Commission. This month, the state auditor expressed doubts about whether the commission conducted a thorough audit of the new casinos.

The chair of the panel, Denny Lee, stated that it makes sense for state representatives to examine the agency's operations in greater detail. He said it makes sense to introduce legislation that would let the governor of Nebraska choose the commission's executive director.

The commission's emphasis on horse racing garnered very little notice for many years. However, after voters in 2020 authorized casino gaming at racetracks with a license, authorities tasked the commission with overseeing the fledgling sector. The Legislature’s budget office reports that since then, the commission has experienced significant growth in both its budget and workforce.

According to Lee, commission officials had to create an organization that was unimaginable just five years ago. According to state senator John Lowe of Kearney, it's time for the governor of Nebraska to have more control over the organization.

Declaring Legislative Bill 839 to be the most significant gaming-related bill of the session, Lowe introduced it. The executive director of the agency would still be chosen by the racing and gaming commission under the bill, but the governor would need to give his or her approval.

Additionally, the measure would forbid the executive director from working for any other company or in any other profession. According to Lowe, this clause is meant to make sure the director is committed to the commission's goal. Furthermore, the proposal would grant the governor the authority to dismiss a commissioner due to misbehavior or other grounds. When it comes to the Liquor Control Commission, the governor has comparable jurisdiction.

According to Lowe, these are two crucial commissions that oversee sectors of the economy that generate large amounts of tax income and deal with vices that are strictly regulated by the state. Lowe continued, "It makes sense that they would function similarly."

Gov. Jim Pillen's communications director, Laura Strimple, stated that while the governor supports the bill, the Legislature should also accept the commission's selection for the executive director.

According to Lee, commissioners have not yet had a chance to decide whether to start looking for a new director. The current executive director is presently on medical leave and will soon retire. The agency's director of compliance was named interim executive director by the commissioners.

It's unclear if the bill extending the governor's authority will pass and take effect with the appointment of a new director. State Auditor Mike Foley questioned if the commission was appropriately confirming the money from the new casinos earlier last month.

His office discovered that the commission failed to do an integrity and security assessment on one of the three gaming operators in the state as required by law, or to finish the audits of those operators in a timely manner for the fiscal year 2023. In the fiscal year 2023, the commission received $17.8 million in gaming tax income; this amount is expected to increase as more casinos operate.

According to Foley, a lot of promises were given to the public when they voted in favor of casino gambling, and we need to be sure that the money gained from this activity is independently confirmed by a certified CPA firm, which hasn't happened yet.

Lee stated that the commissioners are trying to address the shortcomings and appreciate the assistance from the auditor. The auditor merely discovered missing audits—not any malfeasance. All three operators have been providing independent audits to the commission on a quarterly basis, he said.

According to Lee, in order to make sure that the operators fulfill their regulatory obligations on time, the staff has been instructed to take the initiative.

Advantage players and other experts in Nevada and additional states with extensive casino presence cautioned Nebraska officials against allowing casino interests to have too much leeway in helping select their own regulators. In many such states, with Nevada as a prime example, the regulators become a “paper tiger.” The regulator appears to much of the public to be a strong protector of patrons, but really does little meaningful work to oversee casino employees and prevent management misbehavior and casino abuse of patrons, therefore garnering predominantly insolence, rather than respect, from the industry it regulates.

Source:

“As Nebraska's casinos take off, state regulator draws more attention” , Joe Dejka, omaha.com, February 2, 2024.