Nebraska Auditor Criticizes Gaming Commission for Casino Tax Money Oversight

When Mike Foley, Nebraska’s State Auditor, aired concerns over the Nebraska Racing and Gaming Commission’s handling of casino tax money, it brought to light significant inefficiencies that have ripple effects throughout the state’s financial oversight mechanisms. Foley’s report, which labeled the Commission’s oversight as “lackluster” and occasionally “nonexistent,” has raised eyebrows among stakeholders. The audit scrutinized the fiscal year ending June 30, marking the first full year when casino gambling was permitted at Nebraska horse racetracks. The establishments in Lincoln, Omaha, Grand Island, and Columbus collectively generated nearly $20 million in tax revenues directed towards property tax credits.

Despite these substantial revenues, the audit discovered glaring inconsistencies in how tax reports from casinos were reviewed—or rather, not reviewed—by the Commission. Foley’s investigation revealed no evidence that the Commission followed up on the mandatory quarterly and yearly tax submissions from the casinos. These lapses led to significant tax discrepancies; for example, WarHorse Casino in Lincoln underpaid taxes by $279,064, whereas Harrah’s in Columbus overpaid by $76,184. These issues further eroded confidence in the Commission’s ability to verify and collect the appropriate tax amounts. Foley advocated for reforms, including possibly shifting the oversight responsibilities

Despite these substantial revenues, the audit discovered glaring inconsistencies in how tax reports from casinos were reviewed—or rather, not reviewed—by the Commission. Foley’s investigation revealed no evidence that the Commission followed up on the mandatory quarterly and yearly tax submissions from the casinos. These lapses led to significant tax discrepancies; for example, WarHorse Casino in Lincoln underpaid taxes by $279,064, whereas Harrah’s in Columbus overpaid by $76,184. These issues further eroded confidence in the Commission’s ability to verify and collect the appropriate tax amounts. Foley advocated for reforms, including possibly shifting the oversight responsibilities to the auditor’s office, to ensure Nebraska maximizes its tax revenues from burgeoning gambling activities.

Casey Ricketts, head of the Nebraska Racing and Gaming Commission, conceded that staff shortages had hindered their capacity to manage financial matters adequately. Until June, financial oversight rested on the shoulders of a single individual, but the Commission has since expanded its team to improve its monitoring capabilities. Ricketts mentioned recent collaborations with regulators from other jurisdictions to better tackle financial issues related to gambling. This move signifies a commitment to tightening fiscal controls and enhancing the integrity of the state’s gambling oversight.

The audit also exposed incidents where Commission employees misused state