Nebraska casino panel hires auditor to keep eye on revenue

Among his duties will be to review financial documents and reports from gaming operators to ensure compliance with the Nebraska Racetrack Gaming Act and commission regulations.

State Auditor Mike Foley, in the October auditor report, castigated the agency’s oversight of casino tax revenues as “lackluster at best and oftentimes nonexistent.”

The new gaming auditor, Ari Saltzman, was announced at the commission’s meeting in Lincoln. Saltzman’s annual salary is $45,364.80.

The agency is charged with regulating Nebraska casinos and collecting taxes equal to 20% of gross gaming revenues from them.

Denny Lee, commission chairman, said the hire had been contemplated months before the release of the critical state report.

The agency’s oversight responsibilities expanded “exponentially” after voters approved casino gaming in November 2020, he said.

Four casinos, paired with licensed horse tracks, are now open in Columbus, Grand Island, Lincoln and Omaha.

“This was never a concern prior to expansion to include casino gaming, because essentially the funds that came in from horse racing over the course of the last 20 years were dropping,” he said.

Lee said the commission had requested the state audit to identify deficiencies in the agency’s processes and procedures so the commission could correct them.

“We asked for it,” he said.

The audit covered the fiscal year ending June 30, a period that covered the first full year of casino gambling at Nebraska racetracks.

During that year, the commission collected nearly $20 million of casino taxes, which goes to several funds.

The bulk of it — 70% — goes into the Property Tax Credit Cash Fund, which is used to provide property owners with a tax credit on their bills.

Twenty-five percent of the gaming tax goes to the county where the racetrack is located, and if the racetrack is located partially within a city or a village, the county and city or village split it. The remaining 5% is split between the state’s general fund and the Compulsive Gamblers Assistance Fund.

Lee said Executive Director Casey Ricketts, while still in interim status earlier this year, identified the need to hire an auditor.

Ricketts said the effort to recruit an auditor to the agency began before that.

“This is a position that we’ve actually actively been trying to recruit for about a year and a half,” she said.

The hiring is part of an effort to bring on sufficient staff to carry out the expanded mission of the agency, she said. Ricketts said the agency has already begun to address the deficiencies identified in the auditor’s report.

Ricketts was appointed interim director last January, and the commissioners in October recommended her for executive director. Gov. Jim Pillen approved their recommendation.

Lee said the state auditor brought up some good points and recommendations, essentially creating a road map for improving oversight.

Lee said he wants the commission’s new auditor to work “hand in hand” with the state auditor to ensure the integrity of the accounting. He said Ricketts and her staff would be working closely with them as well.

“I don’t want any surprises,” he said. “I don’t want the Legislature or the public or the industry to think that there’s miscalculations. I think we have a duty to that.”

He said commissioners who govern the agency are focused on shoring up their regulatory review of the casino operations.

The state auditor’s report said there was no documentation that the commission had reviewed reports from the casinos to verify that the state received the correct amount of revenues, even though the commission’s own regulations required weekly, quarterly and annual reports.