Proposal would fund child care through cash gaming machine taxes

Cash gaming machine businesses would pay a 15% tax on net operating revenue, with 68.95% of collections going to the Nebraska Child Care Aid Fund. The tax would cover Nebraska cash gaming machines operated for profit, except those operated by licensed fraternal benefit societies or recognized veterans organizations. Distributors would pay the tax. Operators would pay when they have no agreement with a distributor paying it. The child care fund would support state child care subsidies and could also receive legislative transfers, gifts, and grants. Other tax shares would be 2.5% for gaming enforcement, 2.5% for gambling assistance, 0.9% for the General Fund, 3.4% for tourism, 13.35% for property tax credits, and 8.4% for local governments. The local share would go to the county outside city or village limits. Inside those limits, the county and city or village would split it equally. Tax payments would be due quarterly on January 1, April 1, July 1, and October 1 for the preceding quarter.

Retail operators would provide attendants and, where required, machines that electronically check players' identification. These requirements would cover cash gaming machines at retail establishments. Attendants would visually confirm players' ages, continuously monitor the machine area, and intervene to prevent play by anyone under 21. Department-approved scanners would authenticate government-issued identification and block play until they verify the player is at least 21. Identification scans would be required before each play session and each voucher printing or redemption. Locations that bar people under 21 from entering would be exempt from electronic scanning. The attendant requirement would begin August 1, 2026. Electronic age checks would apply on and after January 1, 2028.

Machine businesses would follow limits on designs that appeal to minors and on outdoor advertising. The design rules would cover Nebraska operators, distributors, and manufacturers. Outdoor advertising limits would apply at premises housing cash gaming machines. Businesses could not market or offer machines whose designs, packaging, or advertisements use characters primarily appealing to minors or imitate products primarily marketed to minors. Each location could display up to three outdoor signs, each no larger than 11 inches tall by 10 inches wide and permanently attached to the building. Other outdoor advertising, including banners, digital displays, and vehicle wraps, would be prohibited. State officials would require the machine's appearance to meet these rules before issuing its approval sticker.

The Nebraska Department of Revenue could inspect retailers without advance notice and seal machines that fail required electronic age checks. Inspection authority would cover retailers operating cash gaming machines. Sealing for failed age checks would apply only where electronic checks are required. Inspections and audits would check compliance with the machine tax law. After a noncompliance finding, manufacturers or distributors would have 10 days to prove correction and compliance or remove the machine from operation. The 10-day correction or removal period would run from issuance of the department's noncompliance finding.