Georgia Bill Allows Gift Cards for Coin-Operated Amusement Machines

House Bill 544 permits gift card payout for coin-operated amusement machines across Georgia.

COAMs Will Provide Prize Gift Cards to Winners

The new legislation will allow winners to receive gift cards from coin-operated amusement machines (COAMs). The bill proposed by Rep. Alan Powell, R-Hartwell, was passed yesterday. 

Policymakers are hoping to “clean up” the industry this way by eliminating the cash payouts that have been haunting COAMs for a long time, according to Rep. Powell.

COAM Industry Investigation by Senate Declared Cash Payouts Illegal

A committee, appointed by the Senate’s presiding officer, investigated the COAM industry in Georgia last year and cited awarding of cash to winners as problematic. Legal prizes included gasoline, lottery tickets, and in-store merchandise but not cash.  

The COAMs bill also includes regulations that aim to oversee equal competition among operators of the machines as well as the retail businesses that feature them. Machine owners will be barred from proposing incentives to retailers in exchange for housing the machines. 

 “This tightens up all control. Anybody would have to be dumb as mud to do [cash] payouts,” Powell said. 

Pilot Project Sells COAM Gift Cards at 198 Locations

At the moment, the Georgia Lottery’s pilot project is selling gift cards at 198 locations, and House Bill 544 aims to spread the program statewide. 

Proceeds from COAMs are divided by existing laws governing the industry. Machine vendors get 45% of the income as well as retailers housing the games, while the remaining 10% goes to the Lottery that uses it for Georgia’s HOPE Scholarships and pre-kindergarten programs.

Moreover, last fiscal year, players spent above $3 billion on COAMs in Georgia. After redeeming prizes estimated at $2.1 billion, about $900 million in net income was left for the state, COAM license holders, and retailers to share. 

The Georgia Lottery Corporation took over the COAM industry back in 2013, and state proceeds have grown to over $90 million since being $33.5 million five years ago.

Furthermore, the Corporation extended its partnership with Intralot Inc. last year to make sure the COAM industry has advanced services for its technology. 

Democrats Pushing for Increase in the State Share of COAM Income

Democrat representatives argued that $90 million was not enough to condone the authorization of COAMs in Georgia. 

“Ten percent is grossly too low, and if we’re going to give [COAM companies] an opportunity to come into this state, you’ve got to give me more money. The children of our state are being short-changed,” said Rep. Winfred Dukes, D-Albany.

Rep. Stacey Evans, D-Atlanta, indicated such an addictive form of gambling would make sense to be allowed in the state only if substantial benefits for the citizens are secured.

Georgia is looking to expand its gambling industry as a source of additional income. The state may now initiate a constitutional amendment to achieve this.