Citing the need to be prepared in the event of an active shooter event, the Nebraska Racing and Gaming Commission (NRGC) last summer approved the purchase of semiautomatic weapons for its investigators, which are now already in the agency’s possession, the Omaha World Herald reported earlier this month.

The news isn’t sitting well with state legislators or NRGC board members — and the action is one of several that has shown a spotlight on the NRGC since retail casino gaming and sports betting have gone live in the state.

In a separate report from CDC Gaming Reports, Nebraska State Auditor Mike Foley said last week that the NRGC broke its own rules by failing to have an independent auditor review its financial statements. Foley did not mince words in dressing down the agency.

“What we’re being told is, ‘Here’s the money that we earned that we owe to the state. Take our word for it; it’s correct.’ We’re happy to take your word for it, but we also need to verify by an independent firm,” Foley said, according to CDC. “It’s going to be a bigger and bigger issue as time goes on, so we want to make sure right out of the gate everyone’s going to play by the rules, play by the regulations, make sure you verify those tax dollars coming to the people of Nebraska.”

On Jan. 12, Lance Morgan, CEO of WarHorse Casino — which has a racetrack casinos in Lincoln and a sportsbook in Omaha — wrote a scathing letter to gaming commission, calling a December 2023 Innovation Group horse racing market study “premature” and arguing that it “raises serious serious conflict of interest concerns.” He went on to say that that study “failed to meet statutory requirements” and should be shelved.

Nebraska voters in 2020 approved the legalization of games of chance in the state, and two-and-a-half years later, the handles on the first slot machines were pulled and sports bets made. Casinos and sportsbooks were approved for horse racetracks. WarHorse Casino Lincoln welcomed opened the first brick-and-mortar casino in the state Sept. 24, 2022, and the first sports bet was placed at at WarHorse Casino Lincoln on June 22, 2023.

Nebraska does not currently offer any kind of online casino gaming.

‘Optics were probably not the best’

Following legalization, Nebraska lawmakers had to determine exactly what the ballot initiative legalizing games of chance entailed, and ultimately included sports betting in the definition — though most U.S. jurisdictions define it as a game of skill.

Through the legislative and regulatory processes, Nebraska decision makers have been under fire for everything from banning betting on Nebraska teams at home to the automatic weapon purchase.

“Were the guns needed? That’s a subjective question,” NRGC board chairman Dennis Lee told the World Herald. “The optics were probably not the best in terms of how it was handled.”

Alpha dumbass Tom Sage blows 30K on assault weapons for the *Gaming Commission*, immediately faces backlash, can’t return weapons due to a 30% restocking fee, decides to lock them up instead, retires. Stop giving men taxpayer money. https://t.co/kzuGlt6IiK

— Seeing Red Nebraska (@SeeingRedNE) January 25, 2024

The weapons were purchased before the agency’s 10 investigators had cars to drive to casinos, and the guns have not yet been distributed to investigators, meaning the $30,351 spent on them could been appropriated elsewhere for a more immediately functional goal. At a meeting earlier this year, Lee and other board members were shocked to learn of the purchase, which was approved by NRGC executive director Tom Sage, who is currently on medical leave and will retire March 12, wrote the Lincoln Journal-Star.

Casey Ricketts was announced as the interim executive director on Jan. 19, the same day news of Sage’s future was shared. Since gambling launched in Nebraska, the NRGC staff has grown from one to 10 investigators.

Regulators not usually at crime scenes

In its first full year of legal gambling, 2023, Nebraska casinos and sportsbooks took in $89 million in gross gaming revenue. Gross gaming revenue for all kinds of gambling is taxed at 20% in the state, meaning that the state took in approximately $17.8 million in tax revenue, 70% of which is earmarked for property tax relief.

The NRGC’s purchase of 10 SIG Sauer MPX short-barrel rifles is unusual for a gambling regulatory agency in the U.S. Those agencies generally do background checks, investigate white-collar crimes, and enforce gaming regulations, like whether or not a casino has the prescribed level of surveillance, if house rules are properly posted, or if operators have enough funds in their accounts to cover losses.

It would be more likely that a law enforcement agency — which the NRGC is not — would respond to an active-shooter situation. For example, sheriff’s deputies responded to an active-shooter call at the Delta Downs Casino in Vinton, Louisiana, last November (the call turned out to be false), and the local sheriff’s department responded to a shooting death inside the Hard Rock Casino in Nevada last March.

One person is killed in the Hard Rock Lake Tahoe shooting. https://t.co/1dLknckqvC #DCSO #HardRockHotel #Stateline #Nevada #DouglasCounty

— WeTube (@wwwWETUBEorg) March 27, 2023

NRGC investigator Steve Eppens told the World-Herald that “we are in this profession to protect the public,” which is why the weapons were needed, while Steve Anderson, head of the agency’s enforcement division said, “We’re gonna win the fight, and I’m gonna send my guys home every night. As the director, I want my guys to have the tools they need in the field.”

Investigators currently have the authority to make arrests and are considered deputy state sheriffs. They are licensed to carry and trained to properly use handguns.

Lee, the board chairman, said the board would require the NRGC to develop and approve regulations around the use of the weapons before they are deployed.

WarHorse cites conflicts of interest

Also under fire of late is a report by the Innovation Group that found that Nebraska has “sufficient” capacity for horse racetracks and does not need to build any additional tracks. Four of the state’s six tracks have only one day of racing scheduled this year.

For comparison, Nebraska (population: 2 million) has six horse racetracks that are eligible for casino licenses, while border states Iowa (population: 3.2 million) has 19 casinos, and Kansas (population 2.9 million) has 10 casinos.

In their letter, WarHorse’s Morgan points to the Innovation Group’s existing and prior relationships with the state of Iowa and operators that currently do business in both Iowa and Nebraska. Included in the letter are seven pages of examples of statutory failures.

Nebraska has no need for additional horse racing tracks and the casinos that would accompany them, a new report says. | Tap on the picture to learn more https://t.co/pdX7gUM2Bp

— Fremont Tribune (@FremontTribune) January 3, 2024

The study cost the state $48,000, and last week, the NRGC did, in fact, decide to table it in order to seek more information. Furthermore, according to the Nebraska Examiner, the commission wasn’t happy that the Innovation Group did not visit or call racetracks for additional information.

Innovation Group’s Tom Zitt told the commission that it wasn’t possible to properly assess the need for more racetracks and racinos due to the limited number of racing days. The question now is whether the NRGC will commission a new study or direct Innovation Group to gather more information.

Under the new law, only existing racetracks in Columbus, Grand Island, Hastings, Lincoln, Omaha, and South Sioux City can have casinos, but more could be added if a market study shows they wouldn’t hurt established locations.

Photo: Getty Images