Coin operated amusement machines represent one of the few legal gambling options in Georgia. Perhaps unsurprisingly, the machines, collectively referred to as COAMs and available in gas stations, convenience stores, restaurants, and elsewhere, are especially popular.
That’s an understatement, actually. Georgians spend billions each year playing coin operated amusement machines. In fact, when it comes to the amount of money people spend on them, the machines represent the second-most popular form of legal gambling in the state. Only the Georgia Lottery exceeds them.
Here’s a quick overview explaining what COAMs are and what kind of “amusement” they offer to Georgians who play them.
What is a coin operated amusement machine or COAM?
Some think of coin operated amusement machines as Georgia’s version of video slots. Many COAMs do in fact resemble video gambling terminals available in other states, though in truth COAMs technically refer to a much wider range of games, only some of which involve gambling per se.
Georgia law defines a “bona fide coin operated amusement machine” as follows:
“Every machine of any kind or character used by the public to provide amusement or entertainment whose operation requires the payment of or the insertion of a coin, bill, other money, token, ticket, card, or similar object and the result of whose operation depends in whole or in part upon the skill of the player, whether or not it affords an award to a successful player.”
That skill component is one reason why some like to call coin operated amusement machines “skill games.” In any event, COAMs represent a large category of different types of games and other forms of entertainment. All of them cost something to play, but not all of them offer the chance to win prizes.
That’s because there are two types of COAMs in Georgia — Class A and Class B COAMs — only one of which offers prizes.
Class A vs. Class B coin operated amusement machines
Essentially, Class A COAMs do not offer any sort of rewards to players beyond the enjoyment of playing the games. Class B COAMs, meanwhile, offer prizes.
Class A COAMs can include a variety of games like Skee-Ball, claw or crane machines, foosball, air hockey, pinball, pool and different arcade games. Even jukeboxes technically are Class A COAMs.
While the games or “amusements” that Class A COAMs offer can be quite different, they all have in common the fact that they offer no prizes. Successful players don’t get to use points or credits won during one play to use on a subsequent play, nor can they redeem points in any fashion.
By contrast, Class B COAMs do offer prizes, including allowing winning players to accrue points on the machine and carry over points to subsequent plays. Such machines are sometimes called “redemption devices” since players can redeem points or vouchers for various items of value.
Examples of Class B COAMs include video line-up or match-up games. Many of these machines do superficially resemble video slots, but they are all slightly different insofar as they do require some skill. Note that COAMs cannot offer poker, keno, or other casino games. The law explicitly forbids those games as options for COAMs.
Again, the distinction between the two classes of COAMs entirely concerns the offering of rewards. In other words, a similar game could potentially be either a Class A or Class B COAM. It all depends on whether the game awards any prizes for successful play.
Incidentally, the regulations defining examples of COAMs list a number of machines that cannot count as COAMs. Some of these forbidden “games” are quite amusing, such as washing machines and dryers, pay telephones and toilets, gumball machines, cigarette vending machines, and parking meters.
COAMs in Georgia: Legal prizes
Georgia law allows retailers to offer many types of items as prizes for those playing Class B COAMs. Here are some of the things you might find:
- Lottery tickets
- Store merchandise
- In-store gift cards and gift certificates
Note that currently there is a $5 per play limit on COAM machines in Georgia. Players can win more than $5 worth of prizes during a given session, although they cannot win a prize worth more than $5 on a single play of a machine.
The Georgia House and Senate have recently considered legislation that would increase the prize limit for COAMs from $5 to $50 per play. In fact, in March 2022 the House voted in favor of a bill that would do just that, the Georgia Lottery for Education Act (HB 1424). But the Senate failed to pursue the legislation, and it failed to advance.
There are also many prizes that retailers cannot offer to COAM players, including the following:
- Payments of utilities
- Gift cards to other stores
The penalties that retailers face for awarding players cash or other prohibited items as prizes are quite severe, including the revocation of licenses to offer COAMs and/or sell Georgia Lottery tickets, the seizure of assets, administrative fines and criminal convictions.
Where can I play coin operated amusement machines in Georgia?
Coin operated gaming machines can turn up in a wide variety of businesses in Georgia. Here are the most common locations for COAMs:
- Gas stations
- Convenience stores
Georgia law does not limit the number of Class A COAMs a retail business can have at a single location. However, the law does stipulate that there cannot be more than nine Class B COAMs operating at a single location.
To give you an idea how prevalent COAMs are in the state, for the 2021 licensing year, there were more than 2,000 locations with Class A licenses and more than 4,700 locations with Class B licenses. That translated to a machine count of more than 15,000 Class A COAMs and nearly 25,000 Class B COAMs throughout the state.
Current Georgia law stipulates that locations must derive at least 50% of their income from the sales of goods and no more than 50% from Class B COAMs. This “50/50 rule” aims to prevent the stores from resembling full-fledged gambling establishments.
Lawmakers have proposed legislation for Georgia COAM machines that would allow some exceptions to the 50/50 rule for fraternal and veterans organizations. Such a change has yet to receive approval, however.
Regulation and revenue of COAMs
Since 2013, the Georgia Lottery Corp. has been the sole regulatory body overseeing coin operated amusement machines in the state.
The lottery has an entire COAM Division solely responsible for issuing licenses and ensuring all retailers, manufacturers and distributors follow the legal guidelines for operating the machines.
Where COAM revenue goes
As noted, COAMs are big business in Georgia, with players spending around $3 billion per year on the games. Of that total, about $2.1 billion goes back to the players in the form of prizes. That means that over recent years, Georgia COAMs are generating an annual profit of about $900 million. Who gets that money?
Georgia law specifically outlines where proceeds from COAMs will go:
- 45% — location licensee share
- 45% — master licensee share
- 10% — the Georgia Lottery Corp.
To break that down, the location licensee share refers to the establishments where the COAMs are located. Thus the gas stations, convenience stores, restaurants and other locations get to keep 45% of the proceeds from their COAMs. Any retailer with one or more COAMs has to be a location license holder.
The master licensee share refers to the companies that own the COAMs. Any manufacturer or distributor that supplies such machines also has to apply for a license to do so, thereby becoming a master license holder. That person or company also receives 45% of the proceeds from their COAMs.
Meanwhile, for serving as the regulatory body, the Georgia Lottery Corp. receives 10% of the revenue from the machines. The GLC uses all of that money to help fund the HOPE Scholarship program.
Recently, some Georgia lawmakers have argued that 10% of COAMs proceeds isn’t enough and that education programs deserve a larger percentage of revenue. Some have proposed restructuring the division of funds to send the GLC (and thus the HOPE Scholarship) as much as 30% of the net proceeds. Those arguments have yet to result in a change, however.
COAMs across the US
Georgia is not the only state in the US where coin operated amusement machines or something similar are legal and regulated.
Texas allows such machines, where legal documents variously describe them as “skill or pleasure coin-operated machines” or “amusement redemption machines.” Virginia and Missouri each have similar “coin-operated amusement devices,” while Tennessee and Illinois also have their own COAMs with state-level oversight and regulation.
Truth be told, most states have some version of COAMs, although in most cases the games are explicitly non-gambling, arcade-type games offering only entertainment and no chances to win prizes. In some places, you’ll see these games referred to as “coin pushers.”
In certain states, particularly those with limited forms of legal gambling available, you might encounter establishments offering so-called “skill games” that yield prizes or cash for winning play. In some cases, these games can be virtually indistinguishable from video slots or other casino-like games. Operators of such games often cite legal loopholes in order to justify offering them.
Even so, in such places you’ll find local authorities frequently shutting down the games and/or imposing fines or forcing the closure of establishments that offer them. Often such maneuvers engender a kind of large-scale “whack-a-mole” effort by law enforcement to prevent the businesses from opening again at new locations.
Indeed, as was the case in Georgia, illegal or quasi-legal versions of such games sometimes motivate lawmakers to try to eradicate the black market by legalizing COAMs, introducing regulatory procedures, and finding beneficial ways for the state to use the resulting revenue.
History of COAMs in Georgia
“Gambling machines” have been around in various forms for many years across the US. In Georgia, there was a famous court case back in the 1930s regarding such machines.
A Fitzgerald, Georgia, drugstore had a pinball machine that cost five cents to play. Players who achieved a certain score on the game received a pack of cigarettes worth 15 cents. The game was a hit, but it drew the attention of the authorities, and police seized the machine as an illegal gambling device.
Many years later, Georgia lawmakers excluded so-called coin operated amusement machines from the list of prohibited games. In 1992, the law was revised specifically to exclude “casino gambling.” Eventually, that led to a loophole of sorts that some establishments exploited to offer different types of video gambling machines, including video poker and video keno, while claiming the games were legal as examples of coin operated amusement machines and not casino gambling.
Georgia lawmakers didn’t find amusement machines so amusing and passed legislation to ban video poker and keno games. A fierce court battle ensued, and in 2002 the Georgia Supreme Court ruled to uphold the ban.
In the wake of that ruling, everyone understood machines offering poker, blackjack, keno or other obviously casino-like games to be illegal. But other games offering small prizes of store merchandise continued to be available as long as the game had some sort of skill component.
There were numerous raids and arrests over subsequent years as retailers tested what was legal and what was not. There were also multiple court cases concerning the games. By the early 2010s, some estimated there were between 10,000 and 20,000 illegal video machines operating statewide.
Finally, after years of trying to regulate COAMs, the Georgia Assembly passed HB 487, placing the operation of COAMs entirely under the regulatory purview of the Georgia Lottery Corp. starting in April 2013.
Ever since, Georgia coin operated amusement machines have steadily increased in popularity each year. As noted, Georgians now spend $3 billion per year playing the machines. That’s about half the $6 billion annually that people spend on Georgia Lottery tickets.