Unveiling the World of Georgia COAMs

Step into any corner store or gas station in Georgia, and you’ll likely encounter Coin Operated Amusement Machines or COAMs. These machines have become an integral part of the entertainment landscape, offering a wide range of games and experiences for all types of players.

In this article, we’ll explore the ins and outs of COAMs in Georgia, from their definition and classification to the regulations that govern their operation. We’ll also take a look at the unique revenue-sharing model that drives the industry and the implications for different stakeholders.

What Are COAMs?

COAMs are divided into two distinct categories:

• Class A: These COAMs are about pure entertainment. Think classic arcade games like pinball or air hockey that offer no prizes beyond the thrill of gameplay itself.
• Class B: These COAMs are often described as “games of skill,” where players can accumulate points and redeem them for prizes like merchandise, gift cards, or even lottery tickets. Think modern touch-screen games that test your reflexes or strategic thinking.

Key players in the COAM ecosystem include:

• Manufacturers: They design and build the machines, bringing the fun and skill challenges to life.
• Distributors: They act as middlemen, getting the machines from manufacturers to the businesses hosting them.
• Master licensees: They are the legal operators who manage large groups of COAMs within a specific geographic area.
• Location owners: Convenience stores, amusement centers, and bowling alleys are examples of businesses that host COAMs.

The COAM Revenue Split

GA COAMs operate under a distinctive 45/45/10 revenue-sharing framework between location owners, master licensees, and the Georgia Lottery Corporation (GLC).

• 45% of monthly net revenues go to the location owners.
• 45% goes to master GA COAM license holders for their lease machines across locations.
• 10% goes to the GLC to support educational programs.

The model differs from typical gaming revenue splits, such as the state lotteries, where nearly 30% of revenues fund public programs. However, Georgia’s split incentivizes location and master licensee participation, which is crucial for sustaining COAMs while also directing some funds for public use. For location owners, the significant 45% share enables hosting COAMs to offset some of the high costs of venue maintenance and operation. Master licensees also depend on their 45% to spur investment in new machines across the state.

In recent years, debates have brewed regarding reforming the revenue split ratio, given its imbalance compared to other state gaming frameworks. However, Georgia’s unique 45/45/10 split remains entrenched given the model’s rare mutually beneficial outcome for both location and licensee stakeholders.

Understanding COAM Regulations

Georgia’s COAM industry operates under a set of regulations, ensuring fair play, responsible operation, and consumer protection. Key regulations include:

• Licensing requirements: Every entity involved, from master licensees to location owners, needs to obtain specific GA COAM licenses from the GLC. This ensures proper oversight and accountability.
• Machine testing: COAMs undergo rigorous testing by independent labs to guarantee they function correctly and operate within established payout limits to safeguard against unfair advantages or misleading practices.
• Location restrictions: COAMs are prohibited in certain locations, such as schools, daycare centers, and establishments within 100 yards of churches or libraries. This aims to minimize exposure to minors.

The enforcement of these regulations has its challenges. The complexity of the industry, with its many types of businesses and variety of GA COAMs available, makes compliance a tightrope walk. However, the GLC has established a robust system to monitor and enforce compliance, including the Central Accounting System, which tracks the financial activity of COAMs and allows for remote enabling and disabling of machines when necessary.

The COAM Industry Landscape

Georgia’s COAM industry, while less widely recognized than other forms of gaming, holds a significant presence within the state’s entertainment and economic landscape. In 2022, the average monthly net revenue from COAMs in Georgia was over $50 million with greater than $5 million going to the GLC.

The COAM industry also contributes to the state’s economy in other ways. Manufacturers invest in cutting-edge COAM concepts and analytics software to constantly reshape profit potential and gameplay experiences while creating jobs. Distributors provide COAMs to location operators, and technicians are required to repair the machines, supporting even more employment opportunities.

The COAM landscape extends beyond traditional arcades, including convenience stores, restaurants, bars, and bowling alleys. COAMs can also attract customers to these businesses, potentially boosting overall sales and economic activity in those locations.

Conclusion

Georgia COAMs offer a unique blend of entertainment and potential rewards, operating within a framework that fosters responsible operation and innovation. The 45/45/10 revenue split ensures fair return for stakeholders, while regulations safeguard fair play and placement. This thriving industry contributes to the state’s economy through job creation, tax revenue, and potentially boosting local businesses.