22% of Nevada motorists are uninsured, according to Jim Gibbons' chief of staff, Robin Reedy.
According to Chicago company InsureNet, Nevada could raise $30 million by using InsureNet's system of photographing license plates to identify uninsured and unregistered vehicles.
The proposal was rejected on Wednesday.
The Law Vegas Review Journal reports that Nevada fines its motorists $250 for driving while uninsured and $500 for driving without valid registration, but the offenders are difficult to catch.
According to the journal, "critics raised the privacy issue, although a spokesman for InsureNet said any information collected by the company would go into a national law enforcement computer network, and the company itself would not retain the information."
No other state currently uses InsureNet to verify the insurance status of motorists.