But these games aren’t technically slots. Instead, they’re called “coin-operated amusement machines,” which are only allowed because they include a tiny element of skill: Players have the option to move symbols — such as a 7, cherry or gold bar — one spot up or down to match three symbols in a row for a win. Some machines flag the icon that needs to be adjusted, letting a player know how to win that spin.

Credit: Natrice Miller / Natrice.Miller@ajc.com

Credit: Natrice Miller / Natrice.Miller@ajc.com

In a state where bills failed this year to legalize sports betting and horse racing, COAMs have proliferated, with 34,000 machines in over 6,200 stores, accounting for the fastest-growing source of revenue for the Georgia Lottery, which oversees and licenses the machines.

‘Gambling’ vs ‘gaming’

Many lawmakers and industry stakeholders seem to agree that the practice needs to be better regulated, but for years legislation that would do so has failed to advance through the General Assembly.

A bill this year that would have allowed COAM winnings to be paid out through Visa or Mastercard debit cards fell short at the General Assembly, but that doesn’t stop stores from continuing to hand out store credits as prizes that can be used to pay for merchandise, gas or lottery tickets.

Some in the industry say they’re frustrated by competitors who skirt the law and give cash payouts, which are illegal in Georgia.

“There are a lot of shenanigans going on,” said Jamie Boyden, group director for Lucky Bucks Gaming Group, COAM operators who provide machines to stores.

As recently as October, police arrested three men who were accused of paying players their winnings in cash at separate gas stations in Hall County.

Better regulation is needed, Boyden said, to ensure that all license holders are held accountable. He wants better enforcement of laws that come with sentences of one to five years imprisonment for commercial gambling and fines up to $50,000 and license suspensions for companies operating illegally.

Supporters of debit card payouts said they would eliminate the incentive for stores to lure customers by illegally distributing cash to winning players, which crosses a line between “gaming” and “gambling.” Permitting debit cards would likely further fuel the growth of COAMs if players have more freedom to spend their prizes anywhere they want.

“It’s another option for the winners and players,” said Angela Holland, president for the Georgia Association of Convenience Stores. “By allowing redemption on a gift card, it would curtail some of the illegal cash payouts in the industry.”

Skeptics see debit cards as another avenue to separate Georgians from their hard-earned money and funnel it to businesses and the state government through games in which the house almost always wins.

“This completely changes the industry. Instead of now turning in your winnings as if you were at a Chuck E. Cheese for a prize, you can now get a gift card,” Senate Regulated Industries Committee Chairman Bill Cowsert, a Republican from Athens, said during a debate over House Bill 353 on the last day of this year’s legislative session. “It makes it more like casino gambling — a row of six slot machines at every corner convenience store instead of a casino.”

Big money and high rake

The moneymaking potential of COAMs for convenience stores, gaming companies and the Georgia Lottery is undeniable.

Georgians spent $4.8 billion on COAMs and won $3.4 billion in prizes in fiscal 2022, according to the Georgia Lottery. Most of the remaining $1.4 billion went to COAM locations and gaming companies. The state’s 10% share of net receipts amounted to $141 million for the Georgia Lottery’s education programs.

COAM players say they’re not fooled. To them, the machines are a way to try their luck and have a chance at coming out ahead, almost as if they were in Las Vegas.

Credit: Natrice Miller / Natrice.Miller@ajc.com

Credit: Natrice Miller / Natrice.Miller@ajc.com

As she played the “Red Hot Buffalo” game at a BP station near Decatur, Valerie West said she loves playing slots but wishes she were able to spend her money outside the gas station.

One time, West said she won $500 but kept playing until the money ran out because she didn’t want to blow it on the Georgia Lottery’s scratch-off games. Another time, she spent $900 in winnings on scratch-off games, ending up with a $250 payout.

“This is a better deal than the lottery. It would be better if you could get cash that you could spend anywhere. If they did that, you wouldn’t have to worry about going to a casino,” West said.

Another player, Sam Jones, said the lack of cash redemption keeps his money confined to the Georgia Lottery.

“It’s all luck. I just do it to pass the time. If I win, I get a lotto ticket,” Jones said as he played “Cash Eruption: Temple of Fire” at the BP station. “It’s OK with me that the money stays in the store. To each his own. Anybody can do it.”

COAMs have rapidly expanded in recent years, with net revenue jumping from just over $1 billion in the 2020 calendar year to $1.4 billion in 2021, according to the Georgia Lottery’s financial disclosures. Each year since has seen steady increases as well, with net revenue on pace for $1.45 billion this year.

But COAMs are still dwarfed by traditional lottery games, such as Mega Millions, Powerball and scratch-off tickets. COAM income represented 3% of the Georgia Lottery’s $5.6 billion net operating revenue in fiscal 2022.

COAM companies and the convenience store industry have pull at the Statehouse, frequently giving big-money campaign contributions to Georgia politicians, including Gov. Brian Kemp and other state leaders.

Debit card cashouts

The idea of allowing monetary payouts through debit cards is already being tested by the Georgia Lottery. About 720 of the state’s 6,600 COAM locations have signed up for the debit card program.

It’s too early to tell whether gift cards will result in an overall increase in lottery sales, spokeswoman Tandi Reddick said.

Three machines tucked in the corner of a Chevron in Midtown are a bit of a draw for customers, said the gas station’s manager, Dhilli Paudel. Changing the law to allow debit card payouts would boost his business, he said.

“It might be helpful so (customers) can win money to the card and go shop anywhere,” Paudel said.

The government can also track debit card winnings, which would help prevent under-the-table cash awards.

“By going to the gift card, that would finally put an end to the cash payouts,” said House Regulated Industries Chairman Alan Powell, a Republican from Hartwell whose bill would have instituted debit cards statewide. “These machines are legal. Some people might call it gambling; I call it gaming.”

While the debit card proposal passed the House, it was heavily amended in the Senate to remove that provision and didn’t receive a final vote before the end of this year’s legislative session.

Any bills to regulate COAMs, which have been part of the Georgia Lottery since 2013, will have to wait until the General Assembly reconvenes next year.

Lottery lingo

Coin-operated amusement machine (COAM): A type of slot machine whose results can change based on the “skill” of the player.

Skill: A player’s ability to change slot results by moving a symbol — such as a 7, cherry or gold bar — one spot up or down to win by matching three in a row.

Gaming: Gambling, but with a slight element of skill.

Gift card: A Visa or Mastercard debit card loaded with a player’s winnings that can be used to purchase anything except cash, alcohol or firearms. Cash payouts are illegal in Georgia.