COAM 2

COAM Bill Signed Into Law

After what seems like a lifetime of efforts, a robust Coin Operated Amusement Machine (COAM) bill has been enacted. On behalf of GACS retail members as well as GACS gaming company sponsors, we are grateful for the work of: Speaker Jon Burns (R-Newington), Representative Alan Powell (R-Hartwell), Senator Clint Dixon (R-Gwinnett) and Representative Stacy Evans (D-Atlanta) for their unwavering efforts to bring about this final version. A huge thank you Buddy Rich with Mims for being an invaluable partner and sounding board who remained absolutely committed to his retail partners and GACS throughout the process. Additionally, thank you to Ryan Teague (Robbins Firm) on behalf of ARC Gaming for standing with and working so well with GACS at the capitol. We appreciate you all!
SB353, introduced in February of 2023, passed in final form March 26, 2024, and was signed into law (and effective) on May 6, 2024. The process required intense negotiation and some pretty thick skin to advocate our position. We saw at least 12 different versions of the bill —some public documents as well as working drafts. What passed reflects a compromise—a coalition of the willing, to come together, and first do no harm, and secondly seek broader clarity and professionalism in the industry. The outcome is legislation of which we all can be proud. While certainly, what policies were enacted is important, an understanding of what did not make it in the bill is as telling.

What Was Out
Various drafts included language that would have been exceedingly damaging to your business. There were efforts to: to:

Move the existing 9 month rule to 36 months,
Increase your liability—even going so far as to do so in a way that attempted to pierce the corporate veil, tying the hands of a landlord for the actions of a tenant.
Require retailers to remain with an existing Master Licensee until that ML chooses to release you from your contract, regardless of what your contract stipulated, and regardless of any legal and compliant nonrenewable activities.
Require retailers to provide information to the Lottery regarding where funding was obtained to acquire your location etc. (without requiring the same transparency on master licensees)
We are exceedingly grateful that none of this language made it into the final version of the bill. Perhaps notably, retailers were not alone in the Master Licensee targets. Numerous versions sought to dramatically increase the financial liability of machine manufacturers and distributors as well as subject them to wildly frivolous arbitrations, so take solace in the fact that we were not alone.

What’s In
The good news is that what passed represents a balanced piece of legislation, which should provide meaningful updates to the industry without harming any of the parties involved. The bill contained over 16 pages with 11 sections of updates to the law. Selected, important changes include:

APA
Places the COAM division under the Administra-tive Procedures Act, providing for a specific process for the promulgation of rules and regulations. Why this is important to you is that the APA allows for a public notice and public hearing before any proposed regulatory rule or regulation is adopted or changed. GACS looks forward to working with the GLC throughout this new process.

Gift Card
Effective upon signature of the governor (May 6, 2024), a location licensee (retailer) may offer a gift card to a game patron as a legal form of redemption. This gift card, until July 1, 2026 must NOT be reloadable. On and after July 1, 2026, the card may be reloadable, however, the ONLY form of legal redemption will be: replays of the game, lottery products (think lottery tickets) and a gift card. Notably, under the new law, gift cards may be provided via a self-service gift card device or kiosk. This kiosk may be provided by the master licensee or even directly by the location licensee/ retailer.

Tax/Revenue Share
The bill, or current law provides a new taxation or revenue-sharing rate for the industry. Given the bill is effective, the new rate is: 13% to the GLC with the remaining split evenly between the location licensee (retailer) and the master licensee (43.5% to each). While some may be disappointed with the new tax rate, it is very much in line with other similarly regulated industries across the US.

Fixtures
Under the new law master licensees are clearly allowed to provide the following to their location licensees (retailers) including: branded posters and signs, digital video signage, rugs, seating, removable partition walls, and wall coverings.
Any additional items could be authorized by the GLC via a formal rule and regulation process. Any fixture provided by the master licensee to the location licensee (retailer) shall “be exclusively for the facilitation and promotion” of the games and gift cards, and such items shall remain the property of the master licensee and shall be removed when the games are removed from the location.

Multi-Year Licenses
Licensees will be allowed to choose to apply for a one-, two-, or three-year license

GLC Revenue Shortfall Reserves
A longstanding effort by Representative Stacey Evans (D-Atlanta) to ensure that the Georgia Lottery is maximizing the annual amount of dollars available to students was realized in the bill by tweaking the amount of money that must be kept in reserves. There are many other details in the bill that should be independently assessed by all people involved in the industry.

To obtain a copy of the bill see: https://www.legis.ga.gov/legislation/64264
In all, the bill is expected to increase money to HOPE and preK by over $150M. This compromise bill is one of which we can all be proud.

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