Editor’s note: This story is about gambling and problem gambling. Nebraskans seeking help with problem gambling can call 1-833-BETOVER — 833-238-6837 — 24 hours a day.
Mike Sciandra kept $300-$400 zippered inside a pouch in his leather backpack, ready for the moment he could take a break from his traveling sales job and walk into a Nebraska bar or convenience store.
There, in Auburn, Aurora, Columbus, North Platte or York, he’d bet the maximum $4 per spin on a so-called “skill game,” a legal slot machine look-alike that until this summer faced little state scrutiny.
Sciandra’s gambling on skill games cost the 46-year-old “many many thousands of dollars.” His gambling in general led to two bankruptcies and was a factor in his divorce.
Sciandra, now a recovering gambling addict and executive director of the Nebraska Council on Problem Gambling, notes that until this July, the owners of skilled gaming machines — also known as cash devices, skill touch machines or gray machines — weren’t required to contribute a cent of gaming revenue to help problem gamblers. That’s despite data showing that 70% of all Nebraskans who seek state-aided counseling report that “computer-driven devices” — either skill games or casino slots — are the source of their gambling problems.
“The people who are playing on (skill games) are losing a lot of money,” said David Geier, the executive director of the Nebraska Commission on Problem Gambling, “and they’re producing about as many new client contacts as slot machines.”
The machines are easy to overlook if you’re not seeking them out, but you can find skill games all across Nebraska. About 5,450 machines are set up at more than 1,600 locations — bars, restaurants, smoke shops, truck stops, grocery stores and laundromats. That compares with 3,364 slot machines at casinos in Lincoln, Omaha, Grand Island, Columbus and Ogallala.
And until recently, the skill games were mostly unregulated.
Last year, the Nebraska Legislature approved a bill that regulates the games. The legislation, which went into effect this July, levies a 5% tax on the net operating revenue of most of these devices and requires that all the games be connected to a central monitoring system so state officials can know how much the devices are taking in and paying out.
A portion of the tax money from skill games — 2.5% — will go to a fund dedicated to helping problem gamblers. State officials estimate that the amount will be around $76,500 a year. Sciandra said that will cover the counseling costs of only a few problem gamblers.
The amount from skill games, both as a percentage and a dollar amount, pales in comparison to Nebraska’s forms of gambling. Casinos contribute more than $1 million a year to help problem gamblers, while the lottery adds about $950,000.
Out of the problem gambling commission’s $2.85 million annual budget, about $2 million goes toward gambling-cessation counseling for Nebraskans.
In 2023, Geier said, the counselors were seeing about 257 people per month. This past year, as more casinos opened and as the number of skill games increased, that number rose to 328.
When participants in the Nebraska Problem Gamblers Assistance Program were asked where they gambled most often, 34% said convenience stores, 28% said casinos and 18% said mobile devices.
“Five years ago, I had one client that was struggling with a game at a gas station,” said Carly Spring, a certified disordered gambling counselor in Omaha. “And now, yeah, that number is much larger.”
Sciandra understands this struggle. He’d feel his biggest high before he would gamble, when he was walking into a bar to place a bet. That, he said, “was what propelled me more than anything.”
Sometimes, he’d play on a skill machine for 10 minutes. Other times, he’d play for an hour and a half. He’d usually buy a Diet Coke or a beer because many bars made him order something. Sometimes, he didn’t touch the drink.
He liked the skill games’ fast pace of play. When he won, he’d think that his “system” was working. But mostly, he lost, and he’d feel anxious and depressed. The losses often would lead to more losing because he’d try to get back to even.
In May, State Sens. Jana Hughes, a Republican from Seward, and Ashlei Spivey, a Democrat from Omaha, introduced a resolution to study the impact of Nebraska’s skilled gaming machines.
It calls for mapping the prevalence, placement and density of the machines; studying their impact on addiction services, financial hardship and public health; and comparing the state revenue generated by skill games to the money spent on state-provided services such as gambling and financial counseling.
The lawmakers and other experts suspect that skill games return a lot less to the player than do other forms of gambling in Nebraska.
A study by the American Gaming Association, the casino industry lobby, found that unregulated skill games in Pennsylvania kept an average of 25 cents for every dollar bet, while regulated machines like casino slots kept 7.7 cents.
Iowa casinos, which are required to post their aggregate payout percentage for slots, return around 90% to players. Nebraska casinos don’t have to report that information, but Lynne McNally, head of government relations for WarHorse Casinos, said Nebraska casinos are “competitive” with Iowa’s rates.
Nebraska officials don’t yet know how much money skill games in the state return to players, but that information will come out of the central server’s data collection.
Both Hughes and Spivey say what adults choose to do with their money is their own business. But Spivey said she wants to make sure the skill games aren’t preying on the state’s most vulnerable citizens. Her impression is that the skill game companies target communities with more low-income residents.
“My personal opinion is they are predatory and too similar to traditional gaming and slot devices,” Spivey said, adding that she thinks skill games should be taxed at a rate similar to what casinos pay.
Hughes said she wants to make sure kids aren’t playing the games. “They’re in places where you know there’s not someone checking IDs and making sure only people 21 and older are on them,” she said.
McNally said she once saw a kid who looked to be 6 or 7 years old playing one of the games at a convenience store. She found the boy’s father nearby and asked him if he knew the child was on the machine. “He said it wasn’t the first time he had done it, and no one had ever said anything to him about it,” she recalled.
McNally contends that skill games essentially are slot machines, and the owners of businesses where they’re located face little oversight, even after the recently enacted law.
As a member of the board of directors at WarHorse, McNally had to fill out a “key person” license application and a 66-page disclosure form. Applicants must provide personal financial records and submit to an extensive background investigation. The license cost her $10,000.
Businesses that offer skill games, she said, “don’t have to comply with the numerous rules and regulations that we have to comply with. It’s literally a 2-inch (thick) book of rules and regulations. Sometimes it can be dizzying.”
Businesses that distribute or operate skill games argue that the costs to provide skill games are high, especially for small operations.
Andy Dobel with Greater America Distributing testified in a January 2024 legislative hearing that the price of each machine can range from $4,000 to $13,000. “These are not cheap to … pick up and run,” he said. “That’s part of what I exist for … we service the machines, we provide the tech support, we provide financing. My customers are some of the hardest-working people you’ll ever meet.”
Mark Phelan, president of U.S. gaming for Accel Entertainment, testified at the same hearing that, based on a Nebraska legislative study, each slot machine at WarHorse in Lincoln generated an average of $350 per day, while skill games in the state made about $32 per day per machine.
“So I do not think a (tax) rate that’s greater than 5% would be particularly fair to the industry nor supported,” Phelan said. His company operates about 27,000 electronic gaming machines across 10 states.
Accel’s second quarter report lists 975 machines in Nebraska as of June 30. The company’s net revenues in the state through the first six months of 2025 were $15.1 million, so on an annual basis, that would mean each machine will have generated an average of nearly $31,000.
The Nebraska Supreme Court ruled in 2011 that skill games were not awarding players by chance, so they were predominantly games of skill and didn’t constitute gambling. But the “skill” couldn’t be too difficult — it had to be something that “a reasonable player” with an average level of intelligence, physical and mental skills, reaction time and dexterity could master.
A reporter who was betting 25 cents per play on a skill game recently won $3.75 on “Pinata Party” after moving an image of a maraca down a line so that three maracas lined up in a row on the screen. On another game, the player had to stop a horizontally scrolling cursor in the correct box to collect 100% of the 70-cent win instead of 90%, 80% or less.
Both “skills” didn’t seem much like skills.
The games do, however, let you know immediately whether you’ve won or lost, unlike lottery tickets. People who play the skill games or slot machines seek “instant gratification,” said Geier with the Nebraska Commission on Problem Gambling. That is also the case, he said, with online sports betting.
“In-game bets, prop bets, parlay bets provide an immediate response,” Geier said. “That’s what gets somebody going with the kind of behavior that our counselors encounter.”
The information gleaned about skill games from the system that’s now in place, Geier said, should give state officials “a really good start to gaining an understanding of how Nebraskans are being affected by this activity.”
Sciandra said he wants Nebraskans to know they can get free counseling if they develop gambling problems.
“A lot of gamblers all think they have a system,” he said. “We all think we are smarter than the game we’re playing … Obviously, the house always wins in the end.”
1 Comment
This article focused more on how much (the owners of) these machines should pay in taxes, and less about whether we should even allow gambling machines to be in public places. Have we as a society conceded that the cat is out the bag?