Nebraska Sports Betting is Still Losing Money to Iowa

When Nebraska sports betting officially launched in June 2023, it was supposed to help keep money that was already being gambled elsewhere inside the state. A few months into the legal wagering era, it has reportedly failed to do this.

In a recent piece for the Omaha World-Herald, Joe Dejka revealed that the launch of sports betting in Nebraska has failed to prevent residents from traveling across state lines and betting on sports in Iowa. This naturally raises a simple yet salient question: Why?

The reason, it seems, is college sports betting.

Nebraska Sports Betting Laws May be Driving Gamblers Outside the State

Nebraska sports betting laws currently do not make it easy for residents to wager on college sports. Two factors are driving the issue. 

First and foremost, online sports betting in Nebraska is not legal. When the state legalized gambling back in May 2021, it only approved on-site wagering. Nothing changed during the two-plus years it took to launch sports betting services. And now, these limitations are compelling Nebraska sports gamblers to cross the Iowa border so that they can place bets with online sportsbooks located in the United States. As Dejka wrote:

“A remarkable thing is happening at a rather unremarkable highway exit on the Iowa side of the Missouri River across from Omaha. The 130th Street exit on Interstate 680 is surrounded by farm fields and connects to gravel roads. It offers no convenience store, gas station or fast-food outlet to lure drivers off the highway. But on a recent Saturday morning, a steady trickle of cars headed east across the Mormon Bridge from Nebraska, pulled off at the interchange and parked at the roadside. As many as a dozen were parked there at a time, each driver pausing for several minutes before getting back on I-680 and heading back into Nebraska.

What’s got them coming and going? Hopes of a payoff.

“By crossing the river, Nebraskans can escape the geofencing that prevents them from placing a bet via mobile sports-wagering apps in their state. Under current Nebraska law, sports wagering is legal but limited. Bets have to be placed physically in person at the handful of recently opened racetrack casinos.”

This logic tracks to some extent. Many people are probably closer to the Iowa border than one of Nebraska’s racetrack casinos. But what about those making a longer trek, who are within reasonable proximity of Nebraska retail sportsbooks?

Betting on In-State College Teams is Not Always Allowed in Nebraska

Just as the absence of Nebraska online sports betting serves as a logistical headache, so do the state’s rules on college sports wagering. 

At present, residents are not allowed to bet on college events taking place inside the state. For example, if the University of Nebraska football team is hosting Louisiana Tech at home, residents of The Cornhusker State cannot visit a retail sportsbook and bet on the game. But if this same matchup is taking place in Louisiana, Nebraskans will have the option of submitting a wager at one of the racetrack casinos.

This logic is not unique. Other states have done the same. But it is still bizarre on some level. Retail sports betting in Nebraska is already legal. What’s the point of only allowing residents to wager on in-state teams when they’re out of state? 

Officials likely believe events outside the state aren’t at risk of scandals and insider betting. That’s probably valid on some level. But not a big one. We have seen sports betting scandals unfold from thousands of miles away over the past year alone. 

Limiting college sports betting rules is also fairly backwards for a state that doesn’t have any pro sports organizations in its regions. The University of Nebraska football is, without question, the state’s biggest draw. Restricting access to betting on the state’s most popular team is counterintuitive to legalizing sports gambling in the first place. The entire point of legal sports gambling is to regulate and tax money that’s being spent elsewhere, either overseas or in different states. Nebraska’s current model doesn't do enough to cap the amount of money being gambled outside the state.

Will Nebraska Sports Betting Laws Ever Change?

Most experts are in agreement that online sports betting in Nebraska will eventually be legalized. But this is the party line for basically every state without online gambling. It doesn’t make The Cornhusker State special.

Equally critical, “eventually” doesn’t mean imminently. There needs to be a groundswell of support to legalize Nebraska online sports betting or at least expand the rules for betting on college sports. 

Neither matter appears to have the necessary momentum. Certain Nebraska officials have already pushed for college sports betting reform and been fervently shot down. The Cornhusker State skews conservative on the political spectrum. And many of those officials believe a rigidly regulated, ultra-restricted sports betting market is the only way to minimize the risks incumbent of gambling.

To be sure, this isn’t untrue. But it’s not exactly accurate, either. Risks are inherent in any legal sports betting, no matter how restrictive the terms. Nebraska may be preventing residents from wagering on in-state events within the region, but they’re not actually stopping those wagers altogether. And while it’s early enough into the Nebraska sports betting era for this issue to be overlooked or waited out, it’s only a matter of time before members of the House of Representatives and Senate are forced to self-reflect on the wonky, if unimpressive, sports betting market they’ve created.

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