Nebraska has recovered more than half a million dollars in unpaid obligations by diverting gambling winnings from individuals who owe money to the state, according to figures released after the program’s first three months. The collections mark the early results of a law designed to link gambling payouts with outstanding public debts.
The Gambling Winnings Setoff for Outstanding Debt Act took effect on Sept. 2 after lawmakers approved it last year. The law directs gaming operators to withhold part of a person’s winnings when that individual has unresolved debts with the state. Operators then transfer the money to the Department of Revenue, which distributes it to agencies tied to the debt.
Child Support Accounts for Large Share of Collections
From the nearly $530,000 gathered during the program’s initial period, more than $215,000 went toward overdue child support. That portion represents over 40% of the total amount redirected, according to state officials.
“This program ensures funds are being used to help support kids across Nebraska,” Gov. Jim Pillen said in a statement. “Parents have an obligation to their children, and we’re guaranteeing their well-being by collecting these winnings.”
The Department of Health and Human Services confirmed that $215,852.98 was routed specifically to its Child Support Enforcement Program within the first 13 weeks. Shannon Grotrian, director of the Office of Economic Assistance, said the funds moved quickly to families in need.
“By administering these dollars directly to families, the Child Support Enforcement Program is setting our state’s children up for success,” Grotrian said.
How the Setoff Process Works
Under the law, a range of gambling winnings qualifies for interception. The setoff applies to casino games, horseracing payouts, sports betting earnings, and prizes from mechanical amusement devices. Once winnings trigger a match with a state debt record, operators withhold the required amount and forward it to the Department of Revenue.
The revenue department then allocates the money to agencies connected to the unpaid balance, including the Department of Labor, the Department of Motor Vehicles, and Health and Human Services. The system aims to recover debts without requiring separate enforcement actions.
Collections began on Sept. 2, 2025, and the $529,091.47 dispersed during the first three months reflected payments to multiple agencies, not only child support cases. State officials described the program as a coordinated effort among departments to recover money already owed.
Gambling Revenue Context in Nebraska
The setoff program launched amid a surge in gambling activity across the state. As of Oct. 31, Nebraska’s five racetrack casinos had generated nearly $212 million in revenue for the year, exceeding the total from all of last year by $66 million. Horseracing at those same venues produced about $36.5 million through the first 10 months of the year, placing it close to the prior full-year total of $37.7 million.
Officials view the rising volume of wagers as an opportunity to collect delinquent debts that might otherwise go unpaid. By tying the recovery process to gambling payouts, the state has created a direct path to settle obligations while allowing remaining winnings to be released to players.
Source:
“State takes more than $500,000 of gambling winnings to pay off outstanding debts”, nebraskapublicmedia.org. Dec 15, 2025
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