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LB 177

Change provisions relating to certain licenses issued under the Mechanical Amusement Device Tax Act

109th Legislature (2025-2026) Introduced by Stan Clouse

Nebraska LB 177 updates licensing, background checks, inspections, and per-device fees for operators, distributors, and manufacturers of mechanical amusement devices.

Approved by Governor on June 4, 2025
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Bill Summary · LB 177

Summary — LB 177 (2025)

Title: Change provisions relating to certain licenses issued under the Mechanical Amusement Device Tax Act
Sponsor: Sen. Stan Clouse
Status: Enacted — Approved by Governor June 4, 2025

Purpose

LB 177 amends the Mechanical Amusement Device Tax Act to (1) clarify definitions for persons who place and operate cash devices and (2) change licensing, background-check, inspection, and fee provisions for manufacturers, distributors, and operators of cash (mechanical amusement) devices. An earlier proposal to change how cash-device winnings and Form 1099 reporting were defined was removed in committee and is not in the enacted law.

Key provisions and changes

  • Statutes amended: 77-3001, 77-3002, 77-3003, and 77-3003.03, Revised Statutes Cumulative Supplement, 2024.
  • Definitions
    • "Operator" clarified as any person who operates a place of business in which a mechanical amusement device owned by them is physically located and available for play.
    • "Distributor" clarified as any person, other than a retail establishment, who places and directly or indirectly controls or manages a mechanical amusement device within a retail establishment.
  • Licensing term changes
    • Annual licenses for operators, distributors, and manufacturers are converted to biennial licenses (i.e., issued every two years).
  • Background checks and reporting
    • License applicants and licensees (manufacturers, distributors, operators) are subject to expanded background-check authority by the Department of Revenue “at any time,” including fingerprinting and a criminal history check through the FBI via the Nebraska State Patrol.
    • Applicants must submit a personal history report on a form provided by the Department.
    • Licensees/applicants must pay costs associated with background checks.
  • Inspections and ongoing oversight
    • The Department may inspect facilities of applicants or licensees at any time while the license is held, not only at application.
  • Fee adjustment (committee amendment AM87)
    • To address the fiscal note, per-device fees were increased by doubling the previously $200 per-device amount (raising it to $400 per device), subject to a maximum fee cap of $10,000. The licensee is responsible for associated costs and fees. (AM87 language adopted in committee.)

Who is affected

  • Primary: manufacturers, distributors, and operators of mechanical amusement/cash devices in Nebraska (including those placing devices in retail establishments).
  • Secondary: Department of Revenue (administration, enforcement), Nebraska State Patrol and FBI (background-check processing), and retail establishments hosting devices.
  • Players/public: no change to player tax-reporting/1099 requirements in the final enacted bill (the proposed change to Section 9‑1303 was removed by amendment).

Procedural / timeline highlights

  • Introduced: January 13, 2025
  • General Affairs Committee hearing and amendment (AM87): January–February 2025
  • Passed Legislature (Final Reading): May 30, 2025 (vote 48-0-1)
  • Presented to Governor: May 30, 2025
  • Approved by Governor: June 4, 2025
  • Effective: As a public law enacted June 4, 2025 (statutory effective date not separately specified in bill text).

Fiscal impact

  • The committee amended the bill to increase per-device fees to address the fiscal note; the fee cap is $10,000. The Department will collect background-check costs from applicants/licensees. Exact net revenue estimates were the subject of fiscal notes considered during committee action.

Notes

  • An initial drafting that would have changed the Gambling Winnings Setoff definition (cash-device winnings and IRS 1099 issuer rules) was removed by amendment (AM87); LB 177 as enacted focuses on licensing, background checks, inspections, and fees under the Mechanical Amusement Device Tax Act.

Compiled from official sources — confirm details with the bill’s official record.

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