Nevada's Lottery Dilemma: Gaming Paradise Without Scratch Tickets

Nevada stands as a gambling paradox. The state famous for its glittering casinos and 24/7 gaming culture remains one of just five states without a lottery system. Despite being America’s gambling capital, you can’t buy a simple lottery ticket within Nevada’s borders – a situation increasingly at odds with what residents actually want.

The Long-Standing Ban and Recent Progress

Nevada’s prohibition on lotteries dates back to its 1864 constitution – a 159-year-old ban that has survived more than two dozen legislative challenges since 1887. This restriction has remained firmly in place despite Nevada’s evolution into the gambling capital of the world.

But change might finally be on the horizon. In 2023, Nevada lawmakers took a significant step that hadn’t occurred since President William McKinley’s administration by approving AJR5, a proposed constitutional amendment that would remove the prohibition on state lotteries. This resolution cleared both legislative chambers and is now set for a required second consideration in the 2025 legislative session. If approved again, Nevada voters would finally get their say in the 2026 general election.

“It would be helpful going into the next session if there were some more structure around what a lottery could potentially look like,” said Assemblyman C.H. Miller (D-North Las Vegas), who sponsored the constitutional amendment. Miller has proposed that lottery revenue could be directed toward youth mental health programs, though he clarified that the immediate consideration is simply whether Nevadans want the constitutional change.

The Constitutional Amendment Process

The path to amending Nevada’s constitution is deliberately measured. It requires approval in two consecutive legislative sessions followed by voter ratification. This means that even though AJR5 passed in 2023, it must clear the legislature again in 2025 before appearing on the 2026 ballot.

Miller acknowledged this waiting game, noting that future success depends on the makeup of the next Legislature. “I’m hoping that we’re all re-elected,” he said. “I think that this body has indicated that there’s a willingness to move this forward. We still have another election to go through to see if the next legislative body will also want to see the voters get an opportunity to vote on this.”

No previous lottery proposal has advanced as far as AJR5. The constitutional amendment process has historically been the barrier that prevented Nevada lottery initiatives from reaching voters, with more than two dozen attempts failing to make it out of Carson City.

Overwhelming Public Support

The public certainly seems ready for a state lottery. According to a Noble Predictive Insights Nevada Public Opinion Pulse poll conducted in early 2024, a whopping 75% of Nevada voters support legalizing a state lottery, with just 13% opposed. This support transcends political divisions, with 82% of Democrats, 74% of Republicans, and 71% of independents favoring legalization. The poll surveyed 829 registered voters between February 27 and March 5, 2024, with a margin of error of 3.4 percentage points.

Earlier polling from April 2023 showed similar results with about 71% of respondents saying they would support creating a statewide lottery. Additionally, the Culinary Union shared a poll indicating that 84% of residents would vote in favor of legalization if given the chance.

Ted Pappageorge, secretary-treasurer for the Culinary Union, has been vocal about moving the process forward:

The Nevada Legislature must act now and introduce a bill that would amend the Nevada Constitution to allow a state lottery system to be created, hold hearings in the Assembly and Senate, and pass the legislation so that it can go to the ballot and allow voters to ultimately decide.

Casino Industry Opposition

Despite overwhelming public support, the gaming industry has historically opposed lottery legislation, and that resistance continues today. Gaming industry adviser Brendan Bussmann acknowledged the challenge facing casino interests:

There is clear popularity for the measure in a gaming state and one that will be hard to stave off by the industry should it make it through the Legislature in 2025.

As 2025 approaches, the gaming industry appears to be mobilizing once again to prevent AJR5 from passing its second legislative hurdle. Industry representatives have consistently argued that a state lottery would compete with casino gambling and potentially reduce both gaming revenue and tourism.

Economic Impact Concerns

The casino industry’s opposition stems partly from economic concerns supported by academic research. A study by University of Nevada-Reno professors Thomas Cargill and Kambiz Raffie examined the impact of California’s lottery on Nevada’s gambling industry from 1986 through 1989. Their findings showed that gross gambling volume in Nevada averaged 3.7% less each quarter after California’s lottery began. The researchers also noted fewer visitors to Nevada, resulting in reduced sales tax revenue that was 4.5% lower than projected without the lottery effect.

The estimated loss in gaming gross revenue to Nevada casinos was approximately $170 million in 1989, even as casinos reported a 7% increase in overall revenue that year to $4.5 billion. However, it is to be noted that these numbers apply to the traditional casinos, and not to other types of online platforms such as crypto casinos. This research provides some credence to the industry’s concerns about competition from a state lottery.

In response to the competitive threat from California’s lottery, Nevada casinos increased advertising, began looking for markets beyond California, and introduced slot machine jackpots exceeding $1 million to counter the lottery’s appeal. However, as Gary Horton, an economist with the Nevada Gaming Control Board, pointed out, many lottery players who buy tickets at convenience stores wouldn’t necessarily travel to Nevada to gamble anyway: “Many people who play the lottery do it at the 7-Eleven stores, and they are not going to drive over the hill to Reno or travel to Las Vegas anyway.”

The Border Lottery Phenomenon

An interesting twist in Nevada’s lottery saga is that Nevada gaming companies operate California’s two largest lottery ticket retailers located just across the state line. According to the California Lottery, The Lotto Store in Primm Valley and the Gold Ranch in Verdi, California, both situated directly across the Nevada border, generate the highest lottery ticket sales in California. These outlets, operated by Nevada gaming companies Affinity Gaming and Truckee Gaming respectively, primarily serve Nevada residents crossing the border to purchase lottery tickets.

This cross-border lottery shopping hasn’t gone unnoticed by proponents of Nevada’s lottery initiative. Assemblyman Miller highlighted this economic leakage: “I look around and I see continuously how much money people in our state are spending going to other states. It doesn’t make sense for us to not have it. The people of Nevada, by and large, come from states where they have access to lotteries.”

Recent Developments and Prospects

Despite the procedural advance in 2023, Assembly Speaker Steve Yeager has indicated that AJR5 faced headwinds, suggesting it had “failed to garner the necessary momentum to move any further.” Yeager expressed concerns about broader economic contexts, suggesting that federal grant policies tied to “toeing the party line” and potential tourism downturns could influence the state’s appetite for new gambling initiatives.

However, the official legislative timeline indicates that AJR5 is still alive and headed for consideration in the 2025 legislative session. Its prospects there will depend heavily on the makeup of the legislature following the 2024 elections.

Lottery proponents argue that Nevada is missing out on substantial revenue that could fund important state programs. Miller’s proposal to direct lottery proceeds toward youth mental health initiatives highlights one potential beneficiary, though other advocates have suggested education, infrastructure, or healthcare as potential recipients of lottery funding. Most states that operate lotteries earmark the proceeds for specific public benefits, particularly education, which creates a compelling argument for advocates.

A Perplexing Paradox

The situation remains paradoxical – Nevada stands as a global gambling destination where visitors can try their luck at virtually every game of chance except buying a lottery ticket. Residents drive across state lines to participate in neighboring states’ lotteries while Nevada gaming companies profit from this cross-border traffic through affiliated retailers.

For Nevada residents currently making trips to California and Arizona to buy lottery tickets, the potential 2026 ballot measure represents a long-awaited opportunity to bring this popular form of gambling home. While casino interests may continue their resistance, the momentum appears to be shifting toward giving Nevadans the chance to decide for themselves whether their state should join the vast majority of America in offering a lottery.

The 2025 legislative session will be the critical juncture that determines whether Nevada’s 159-year lottery prohibition finally faces a public vote. If public opinion polls are any indication, Nevada’s gaming industry faces an uphill battle in maintaining the status quo against the overwhelming desire of residents to have access to lottery games in their home state.