The Nevada Assembly is once again considering the possibility of legislation to create a state lottery. Assembly Joint Resolution 5, sponsored by Cameron “C.H.” Miller and Danielle Monroe-Moreno, seeks to repeal a constitutional provision prohibiting lotteries in the state. Miller and Monroe-Moreno are both Democrats representing districts in North Las Vegas.
Despite being the most gambling-friendly state in the US, Nevada is one of only five without a lottery. There have been several similar attempts to create one in recent years. All have failed, but JR5 has one thing going for it that previous efforts lacked: union support.
Culinary Local 226, a culinary union representing 60,000 workers, has thrown its support behind this year’s attempt. The union proposes the state uses lottery revenue to address mental health and provide more resources and education to Nevada’s youth. The resolution has been referred to the Legislative Operations and Elections Committee for a hearing.
To amend the state constitution to allow a lottery will require a voter referendum, so passing JR5 would only be a first step. According to the Las Vegas Review-Journal, the earliest such a measure could appear on the ballot is 2026.
However, if the resolution proves unsuccessful, the union plans to investigate another avenue for getting the measure onto the ballot. This would involve circulating an initiative petition to voters.
Despite its position on gambling in general, Nevada faces surprisingly strong opposition to a lottery. As with proposals to allow online casinos in the state, the objections are rooted in a fear that new gambling products would cannibalize retail casino revenues and reduce employment.
Which States Are Still Without a Lottery?
Only five US states don’t have a lottery: Alabama, Alaska, Hawaii, Nevada, and Utah. Aside from Nevada, what the other four states have in common is that they also lack most other forms of gambling.
Hawaii and Utah both have a blanket ban on gambling of any sort for different reasons. Utah is extremely conservative and highly religious, with 60% of the population of most of its lawmakers belonging to the Church of Jesus Christ of Latter-Day Saints (i.e., the Mormon church). Moral objections on religious grounds, therefore, play a significant role.
Hawaii, on the other hand, is significantly more liberal on many fronts. However, its lawmakers believe that gambling, even in the form of a lottery, threatens low-income residents and is contrary to the state’s family-friendly position. There have been unsuccessful attempts to legalize a lottery in Hawaii, most recently in 2021. An attempt this year to legalize other limited forms of gambling also failed.
Alabama, another deep red state like Utah, also faces deep-rooted moral resistance to gambling. However, unlike Utah, it does have Class II tribal casinos, and there have been recent attempts to expand gambling in the state, including a lottery. Here too, those efforts have failed to gain much traction.
The final state on the list, Alaska, can attribute its lack of a lottery to a sparse population as well as conservative views. Alaskan lawmakers point out that the state’s oil fund contributes enough to the state’s revenue, rendering a lottery unnecessary.
Nevada, the Odd Duck
Nevada is fundamentally unlike the other four states without a lottery. Las Vegas and Nevada are synonymous worldwide with gambling, so the lack of a lottery seems perplexing at first glance.
However, if there’s one thing the casino industry hates, it’s outside competition. Casino operators have long opposed the lottery and believe it would threaten their businesses. Unlike other states, gas stations and convenience stores make their gaming money from slots and video poker rather than selling lottery tickets.
Nevada’s casino industry claims the lottery would also threaten jobs. Additionally, casinos claim the state generates enough money for projects often funded by lotteries, including education and infrastructure. Plus, casinos state that adding another type of gambling would increase gambling addiction.
But with billion-dollar lotteries becoming the new norm, including the $1.9 billion win in November, more Nevada residents are pictured standing in lines across state borders to buy a lottery ticket. Lottery proponents point out that residents already spend money on tickets, but that money goes to other states.
Online Casinos Currently Share Similar Fate In Nevada
Nevada was the first state to allow online gaming, passing a bill in 2013. Technically, that law made online casinos possible, but the state regulators authorized only online poker. The only active online poker room in Nevada is WSOP. Online sports betting is also available but requires in-person registration.
Meanwhile, online casino games, including online slots for real money, remain illegal due to a lack of regulatory authorization. As with the lottery, the obstacle is the casino industry.
The casino industry fears that online casinos will cannibalize revenue and allow out-of-state visitors to gamble without staying in a hotel or enjoying other entertainment. An estimated 25% of Las Vegas visitors don’t gamble but spend on entertainment and hotel. Both gamblers and non-gamblers spend money on food, drinks, souvenirs, etc. Some retail casino operators claim online casinos would put a more significant dent in current revenue than they would bring in.
Will Nevada Ever Get a Lottery or Online Casinos?
At the moment, there seems to be more momentum behind the idea of a lottery. However, the need for a constitutional amendment makes that effort more complicated, procedurally. In principle, all Nevada online casinos need is a regulatory rule change.
While there have been attempts to authorize online casinos, they’ve been unsuccessful. Most recently, in 2021, the Nevada Gaming Control Board attempted to organize a public workshop to discuss the possibility. Unfortunately, it was first delayed and then apparently forgotten.
Nonetheless, Bill Horbuckle, CEO of MGM Resorts International, Nevada’s largest casino operator, publicly supported legalizing online casinos. MGM Resorts is also a co-owner of BetMGM Casino, so it stands to benefit from online gambling.
Historically notable opponents of online casinos included Steve Wynn and Sheldon Anderson. However, the landscape may be changing with Anderson’s passing in 2021 and Wynn’s departure due to scandals in 2018. Since then, Wynn Resorts launched WynnBet Online Casino. Some other major Las Vegas Casinos also operate online casinos, including Caesars Entertainment, owner of Caesars Palace.
These days, the most vigorous opposition comes not from the major resort chains but from smaller local operators.
While Nevada casinos have surpassed pre-Covid revenues, tourism still hasn’t returned to 2019 levels. The reduced tourism and the projected $6.5 billion revenue online casinos expect to make in 2023 could make the Nevada casino industry think twice about jumping on board.