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COAMs: An Exception to Gambling

August 13, 2015 Posted In 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.