Nevada will continue to stand alone as the only U.S. state without a lottery, following the failure of Assembly Bill 456 (AB 456), which aimed to establish a state-run lottery. Despite years of debate and growing support from education advocates and small business groups, the legislation did not pass before the 2025 legislative deadline.
Legislative Obstacles and Political Divide
The proposed bill faced several major roadblocks in the legislature. One of the most significant was strong opposition from Nevada’s influential casino industry, which argued that a lottery would divert consumer spending away from existing gaming operations, including slots and sports betting.
Another contentious issue was the proposed 25% tax rate on lottery revenues, which many education advocates claimed was too low to make a meaningful impact on school funding. Constitutional concerns also emerged, with legal experts debating whether the measure would require voter approval via a ballot initiative to amend the state’s 1864 constitution, which currently prohibits lotteries.
Key Reasons for Legislative Failure
- Casino lobby resistance: Gaming giants such as MGM Resorts and Caesars Entertainment lobbied hard to prevent the bill’s passage.
- Democratic division: Lawmakers were split on how to allocate potential lottery revenues, particularly between K-12 education and other public services.
- Lack of financial urgency: With Nevada enjoying a post-pandemic budget surplus, many lawmakers saw no immediate need to introduce a new revenue stream.
- Implementation concerns: Questions surrounding regulatory frameworks, technology procurement, and vendor contracts added further delays.
Economic Impact and Stakeholder Reactions
The failure of the bill means Nevada will continue to forgo an estimated $200 million in annual revenue, based on per-capita lottery earnings from similar-sized states. That loss also extends to education funding and tourism dollars, as out-of-state visitors would have likely purchased tickets while in Las Vegas and Reno.
- American Gaming Association praised the outcome, calling it “a validation of Nevada’s unique and carefully regulated gaming environment.”
- Teachers’ unions and convenience store groups expressed disappointment, calling it “a missed opportunity to fund education and small business growth.”
Looking Ahead: Ballot Initiative in 2026?
Lottery proponents have vowed to regroup and focus efforts on a 2026 ballot initiative, potentially bypassing legislative resistance. They plan to revise the revenue allocation structure and build a broader coalition that includes education groups, labor unions, and retail associations.
Opponents, however, are standing firm. They argue that introducing a lottery could jeopardize existing gaming jobs, worsen problem gambling, and offer minimal net revenue once operating costs are deducted.
National Context
With 45 states and the District of Columbia operating lotteries, and Alabama joining the list in 2024, Nevada’s continued resistance leaves it alongside Utah and Hawaii as one of the last holdouts.
UNLV gaming historian David Schwartz summed it up:
“Until Nevada faces a real fiscal crisis, the political power of the casino industry will likely keep the lottery at bay.”
