The 2024 Georgia COAM Law impacts Master and Location Licensees in the state of Georgia in many different ways. Below you will find Lucky Coin’s initial take aways and summary of the new law passed in 2024, but you can also view the law here or in the linked pdf. here.
Introduction: HB 353 addresses a number of issues relating to Coin Operated Amusement Machines and their regulation by the Georgia Lottery Corporation (GLC). This bill provides critical provisions that will improve the industry’s operation in Georgia.
The major points of the bill are:
- Removes the GLC’s exemption from the Administrative Procedures Act for the COAM industry – provides that the GLC must provide notice and public comment prior to the adoption of any regulations.
- Increases the prize limit in Class A machines from $5 to $50 and allows for gift cards as a form of redemption
- Allows for multiyear licenses – Location and Master licensees will have the option to apply for a 1, 2, or 3 year license
- Allows for non-reloadable gift cards as a legal form of redemption now
- Mandates that on and after July 1, 2026, only replays, lottery products, and non-reloadable and reloadable gift cards are legal forms of redemption
- Exempts certain fraternal and veteran organizations from certain regulations
- Allows for Location Licensees to report gross sales on a quarterly basis
- Provides for limited marketing from Master Licensees to Location Licensees
- Increases the GLC’s share of COAM revenues to 13% – remainder split 43.5%/43.5%
- GLC will provide every licensee with a 1099
Section 1, Page 2, Lines 33-39 This section provides that the COAM division of the GLC will be governed by the Administrative Procedure Act. This will provide for more public comment and legislative input on those regulations and processes that the GLC hopes to enforce. In addition, certain hearings will be conducted pursuant to the Georgia Arbitration Code.
Section 2, Pages 2 and 3, Lines 44-52 More clearly defines the shortfall reserve that is required to be kept in the Lottery for Education Account, and provides for the allocation of and funds over and above the required reserve. This is largely for the purpose of covering the deficit in the State’s Pre-K budget.
Section 3, Page 4, Lines 83-85 The value of prizes on Class A COAMs has remained the same since the late 1970s. This section raises the prize limit on Class A machines to $50, which puts Georgia in line with most other states in the country.
Section 3, Page 4, Lines 86-91 This section defines “Gift Card”. The card cannot be exchanged for cash, change or currency. Such cards can only be loaded or reloaded at the place where the COAM is played.
Section 4, Page 4, Lines 99-100 This section creates a distinction between the $1000 late fee for Class B license applications, and the newly created $100 late fee for Class A license applications. This makes sense because of the much smaller revenues generated by Class A COAMs.
Section 4, Page 5, Lines 105-113 Allows for multiyear licenses. Location Licensees and Master Licensees will be able to opt for a 1, 2, or 3 year license during renewal. License fees will coincide with the term of the license. Licensees are required to report any material change in the information reported on the application during the term of the license.
Section 5, Page 5, Lines 117-120 This section allows for nonreloadable gift cards as a legal form of redemption for Class A and Class B COAMs in the time between the effective date of this legislation and June 30, 2026. Locations will no longer be required to go through the GLC’s gift card pilot program to award gift cards as prizes, so long as they follow all other aspects of this legislation.
Section 5, Page 5, Lines 121-124 Defines legal forms of redemption for Class A COAMs beginning on July 1, 2026. Legal forms of redemption will then include replays, nonreloadable and reloadable gift cards, in addition to any other legal form of redemption.
Section 5, Pages 5 and 6, Lines 125-134 Defines legal forms of redemption for Class B COAMs beginning on July 1, 2026. Effective on that date, the only legal forms of redemption for Class B COAMs will be replays, lottery products, and non-reloadable and reloadable gift cards. This section also sets forth guidelines to the penalties associated with violating the mandatory forms of redemption.
Section 5, Page 6, Lines 135-141 This section sets guidelines around the issuance of a gift card and the acceptance of a gift card by a location. Gift cards can only be loaded or reloaded with value that has been won by the successful play of a game on a COAM. Gift cards can be used on or off-premises. Gift cards can only be loaded or reloaded by location licensees, their employees, or a self-service gift card redemption device (kiosk).
Section 5, Page 6, Lines 142-146 Gift cards can be exchanged for any goods or services which a successful player is entitled by law to purchase. The award of a gift card is the lawful act of in-store redemption. This means that there are no longer any prohibitions on how those gift cards are used. Successful players can now use their gift cards to purchase alcohol, tobacco, or firearms.
Section 5, Page 6, Lines 147-151 Allows for self-service gift card devices, or kiosks. These devices, and the cost of such devices, can be provided by the location owner, the master licensee, or both. Any agreement around a self-service gift card device does not violate the existing law.
Section 6, Page 7, Lines 153-163 The GLC must auction off one master license every three years.
Section 6, Page 7, Lines 164-168 Any time a master license is revoked or placed in nonrenewal, any settlement that provides for the sale of the master license shall require a public auction.
Section 7, Pages 7 and 8, Lines 171-181 This section mandates that the GLC must issue a response to any official inquiry regarding an interpretation of any rule or regulation. This will create more accountability and transparency around the GLC. It will also create a more uniform standard to which all licensees will be held.
Section 8, Page 8, Line 203 This line creates a new standard around when a location licensee must meet the “50/50 Rule”. This rule states that a location’s gross sales, not including COAM revenue or commission-based products, must be greater than the location’s share of the Class B COAM revenue. Previously, these gross sales figures were reported and considered monthly. Now, the GLC will consider a location’s quarterly gross sales when determining if a location is in violation of the “50/50 Rule”.
Section 8, Page 9, Lines 207-209 This section exempts certain fraternal and veteran organizations from the “50/50 Rule” due to their typically lower than average retail sales, and the general good that they do for their communities.
Section 8, Page 10, Lines 232-234 This section sets forth the dates that locations licensees are required to report their quarterly gross sales to the GLC using the same process that they are currently using.
Section 9, Page 12, Lines 282-284 This section mandates that new signage, with language provided by the GLC, shall be on display near any Class A or Class B COAMs.
Section 10, Page 13, Lines 311-316 Allows for the provision of certain non-fixtures and marketing materials by master licensees. These non-fixtures and marketing materials shall not be considered unfair methods of competition or unfair or deceptive acts as long as they follow the guidelines set out in the following section.
Section 10, Page 13, Lines 317-324 Guidelines for the non-fixtures and marketing materials:
- Must be limited to branded posters and signs, digital video signage, rugs, seating, removable partition walls, and wall coverings
- Must be exclusively for the facilitation and promotion of the play of Class B COAMs and the redemption of approved gift cards
- Must remain property of the master licensee
- Must be removed not later than when the Class B COAMs are of the master licensee are removed from the location
Section 11, Page 14, Lines 333-337 Creates a new revenue split between location licensees, master licensees and the GLC. Going forward, the GLC will receive 13% of the net receipts, the location licensee will receive 43.5% of the net receipts, and the master licensee will receive 43.5% of the net receipts.
Section 11, Page 15, Lines 365-367 The GLC will issue every licensee a 1099 at the end of the year for tax purposes.
Conclusion:
In conclusion, we at Lucky Coin believe that HB 353 is a good bill. We expect that it will do a lot to clean up and expand the COAM industry in Georgia. As always, we will work closely with our locations to help them continue to grow and to make sure that they remain in compliance with any applicable rules and regulations.
Hopefully, this has helped to answer any questions or answer any misconceptions and give you the facts on how the 2024 Georgia COAM Law impacts Master and Location Licensees. If you are interested in working with Lucky Coin, you can contact us at info@luckycoininc.com, call us at 1-855-34-LUCKY, or visit us at our website.
We specialize in Class A and B Georgia Lottery Skills Games, Pool Tables, Golden Tees, TouchTunes Jukeboxes, Counter Top Touch Games, and all other coin operated amusement that make you money! We have put together comprehensive packages for gas stations, bars, restaurants, and nightclubs that have profited them thousands of dollars, with almost NO cost to you. We provide the equipment, installation, maintenance, and exceptional 24/7 service FREE of charge, and you simply benefit from the added income! It’s a Win, Win!