COAMs (Coin Operated Amusement Machines) still aren’t a legal form of gambling in Georgia. They’re more of a gambling adjunct, as we recently explained.
Regardless of their exact status on the gambling spectrum, one fact remains: They’re a goliath when it comes to revenue generation.
With House Bill 1424 clearing the Senate Controlled Industries and Utilities Committee at the end of March, Georgia COAMs are ready to bring even more money to Georgia.
Meanwhile, COAMs are filling the gambling void in the Georgia market. They’re extremely popular and generated $3 billion in revenue in 2020.
And as Georgia flirts with gambling expansion, COAMs would be the potential kickstarter for the Peach State.
House Expenses 1424 might boost condition earnings simply by 20%
HB 1424, if passed, will increase the state tax on COAM owners as well as on the establishments that house them. Currently, the state receives a 10% revenue share on COAMs. Should HB 1424 clear the final challenge in the House and pass, that share could jump to 30%.
The impetus for the bill itself is the demand for COAMs throughout Georgia. In their infancy, COAMs generated $2 billion in revenue. Now they rival the Georgia Lottery by topping $4.5 billion today.
In context, if the state were to have taxed that $4.5 billion at the proposed 30% rate in House Bill 1424, it could have netted $360 million for the Georgia education system.
The state certainly wants a bigger share of the pie.
Change may drive COAM proprietors under the desk
Lobbyists for the COAM industry waged a fight against House Bill 1424’s passage, citing Georgia’s position atop the list of state fees assessed for gaming licenses.
Les Schneider, the lobbyist for the Georgia Entertainment & Music Operators Association, put it clearly:
“We pay more than any other COAM operation in the United States of America.” – Capitol Beat
Other arguments against the proposed legislation state that increasing the state tax on COAMs to 30% would only encourage store owners to continue making cash payouts for COAM wins under the table — a battle that the state is already fighting.
Legislation has been proposed to offer gift certificates to COAM winners to discourage illegal cash payouts. And detractors of HB 1424 fear that the increased tax burden will only harm the parallel bill’s attempt to nix illegal payments.
House Bill 1424 would also restrict gift card payouts to the location where the COAM win occurred, significantly impacting the gift card reward payout’s ability to act as “a great equalizer,” as Andrea Humberstone of the Georgia Association of Grocery Stores stated:
“Our members are at a competitive disadvantage when the convenience store across the street pays out cash.”
Your disarray
The Georgia Legislature seems to be creating solutions regarding COAMs but then introducing new issues into the equation.
Regardless of whether the COAM reform bill passes or fails, given its consistent revenue, it is evident that COAMs are highly popular among Georgians. One cannot expect that popularity to diminish due to vague legal language.
Georgians are eager to gamble, even if it means receiving a gas card or a gift card as a payout. However, the state continues to confuse the situation regarding legalized gambling. It inches closer to making it a reality and then rushes to create laws that are as complex as possible.
Image by: Jordan Warwick/Shutterstock
Billings Breazeale is a freelance journalist with a focus on sports, business, and the business of sports. An Atlanta native currently residing in Orlando, Carter graduated from The University of Florida. Since 2018, he has covered the Atlanta Falcons for SBNation’s site, The Falcoholic.
