COAMs: An Exception to Gambling   |  

The Stakes Have Been Raised

Bona fide coin-operated amusement devices, referred to as COAMs, are exceptions to the gambling statutes. They are legal to operate in Georgia in accordance with O.C.G.A. §§ 16-12-35 and 48-17-1 et seq. and as authorized and regulated by the Georgia Lottery Corporation (GLC). That’s because they are designed and manufactured for amusement purposes only and their operation entails some skill, which places these games outside Georgia’s gambling prohibitions. (For more details regarding the law concerning COAMs, see O.C.G.A. § 48-17-1(7.1) (as amended and effective July 1, 2010); Ultra Telecom, Inc. v. State, 288 Ga. 65 (2010).)

If you have COAMs in your business, under the new regime – the GLC governs COAMs – the stakes have been raised. While there are a plethora of ways you can violate Georgia law and/or GLC rules and regulations pertaining to COAMs, the cardinal sin remains paying cash as a reward for successful play of a COAM. Doing so can result in one or more of the following:

1. Criminal charges against cashiers, managers and/or owners. Though such an offense is expressly prohibited under O.C.G.A. § 16-12-35(g), it is commonly overcharged as commercial gambling (in violation of O.C.G.A. § 16-12-22), keeping a gambling place (in violation of O.C.G.A. § 16-12-23), and/or possession of a gambling device (in violation of O.C.G.A. § 16-12-24).

2. Civil forfeiture proceedings under O.C.G.A. § 16-12-32. Under this section, the State attempts to permanently seize property (typically money) purportedly used or intended to be used to facilitate illegal gambling and/or in proximity to violations of the Georgia gambling laws.

3. Civil RICO forfeiture proceedings under O.C.G.A. § 16-14-6. In this case, the State attempts to permanently seize assets including, but not limited to, cash located within your store, business bank accounts, personal bank accounts, your inventory and/or the property on which your store is located. (Think of a civil RICO forfeiture as a forfeiture proceeding as set out above in (ii) on steroids).

4. GLC citation issued against the location owner whereby GLC seeks discipline up to and including revocation of the location owner’s COAM license(s) as well as the location owner’s lottery license(s) and privileges.

Protect your business, your employees, your assets, and yourself by learning how to stay on the right side of Georgia’s COAM rules. Wallack Law offers training so that your employees are clear as to the current law regarding COAMs, employees’ rights if there is a violation, and what to do if law enforcement shows up with a search or arrest warrant. And should you become subject to any of these proceedings, Wallack Law provides knowledgeable counsel to defend you and your employees.

Commercial Gambling Consequences   |  

Because the consequences are significant, if you are under investigation or have been arrested for a commercial gambling offense, you need to retain criminal defense counsel who is knowledgeable and experienced in this particular area of the law.

In 2010, the Georgia Supreme Court held that certain electronic gaming machines that require some level of skill are legal in the state of Georgia.1 A person playing these types of games may win free replays, store merchandise, or prizes2 but may NOT be rewarded with cash, alcohol, tobacco, firearms, or lottery tickets. During the two years since the Supreme Court’s opinion in Ultra Telecom, many law enforcement agencies and prosecutor’s offices have continued to arrest and charge business owners and employees who are alleged to have paid cash (or other illegal rewards) with violations of commercial gambling offenses rather than a non-gambling misdemeanor violation under O.C.G.A § 16-12-35.3

Commercial gambling-related arrests can result in multiple consequences to the business, the business owner, and the business’ employees. In addition to the typical punishment that accompanies any criminal conviction such as incarceration, probation, and/or fines, a conviction for a commercial gambling offense may result in immigration consequences for a non-U.S. citizen and the loss of its liquor license and/or authorization as a retailer of the Georgia Lottery for the business.

In addition to pursuing criminal charges, the prosecutor’s office may seek to permanently seize money and/or property from the business directly linked to the gaming machines through a civil procedure known as forfeiture.  In some counties (including Clayton County and Tombs County), the prosecutor’s office has initiated civil proceedings pursuant to the Georgia RICO (Racketeering Influenced and Corrupt Organizations) Act, premised upon a claim of commercial gambling, in order to attempt to permanently seize assets including the business property, the business inventory, and the contents of the business bank account(s) and the business owner’s personal bank account(s).

My office has successfully handled commercial gambling cases at the state and federal, trial and appellate, and criminal and civil – both RICO and forfeiture – levels.  I invite you to contact me if you have recently been arrested for a commercial gambling offense or wish to discuss the use of electronic gaming machines in your business.


1 In Ultra Telecom v. State, 288 Ga. 65 (2010), the Supreme Court specifically reviewed the following games:  Speedmaster, Nudge ‘Em, Super Ball, Silver Bar, Peachy Queen, Pick-A-Winner, and a combination machine that was programmed to play three different games (Nudge ‘Em, Farm ‘Em, and Nuggets of Gold). The Supreme Court’s ruling would seemingly apply to any similar gaming machine, formally known as bona fide coin operated amusement devices as defined in O.C.G.A § 48-17-1 and O.C.G.A § 16-12-35, requiring some level of skill.

2 See O.C.G.A § O.C.G.A § 16-12-35(d), (h), and (i) for a complete list.

3 Typical offenses include commercial gambling, keeping a gambling place, possession of a gambling device, and/or communicating gambling information.