Georgia is a state starved for legal gaming options, and one of its largest vendors is in financial jeopardy. Lucky Bucks, an Atlanta-based coin operated amusement machines operator, has filed for Chapter 11 bankruptcy protection, citing $50,000 in estimated assets against $610 million in debt.
The company announced that it had reached a deal that would eliminate $500 million in debt and divvy up the company’s equity to lenders. But it’s unclear how or if Lucky Bucks continues to operate amusement machines in Georgia.
It’s yet another question for gaming Georgians who again saw their Legislature kick the can down the road on legal sports betting in the state.
COAMs: Popular with Georgians and regulators
Out of all the ways to gamble, sports betting has been the closest to be legalized in Georgia. Unfortunately, Georgia sports betting remains on the sidelines despite efforts by lawmakers to get it over the finish line. The soonest it could become legal and launch in Georgia is 2024, but even that is optimistic.
Coin operated amusement machines, or COAMs, exist in a legal loophole in Georgia. Regulated by The Georgia Lottery Corporation, COAMs include Class A games like claw machines, while Class B COAMs are known as “games of skill” and can be played for non-cash prizes only. They can be found in gas stations, convenience stores and bars, and they’re wildly popular among Georgians.
In 2022, tax revenue from COAMs generated $141 million for the state’s education fund. That tax windfall wasn’t enough to keep regulators from sniffing around. And what was found was a legal industry operating outside the lines of the law. While COAM operators are forbidden from earning more than 50% of their revenue from the machines, this rule is frequently flouted. COAM operators have also been accused of allowing cash payouts.
That has led to increased scrutiny of the industry and a legal push to eliminate some of the gray areas in the operational law. House Bill 353, designed to increase regulation of COAMs, passed both the state House and Senate during 2023’s General Assembly but has yet to be signed into law by Gov. Brian Kemp. While Lucky Bucks championed increased regulatory measures, it may be too little too late for the Atlanta company.
Lucky Bucks has a corporate battle ahead
Operating 2,300 COAMs in the state, 500 Lucky Bucks slot machines have already been removed by the state this year.
Lucky Bucks has stated that the Chapter 11 move will not impact its employees, partners or consumers. It remains to be seen how the company will move forward.
For Georgians, it’s ultimately added frustration with a state that is overly hesitant to expand legal gambling or sports betting.