Georgia Lottery Bill Would Not Legalize Video Poker

by John Mehaffey on March 9, 2013

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    georgia-lotteryMany Georgia newspapers and TV stations reported a bill that passed the House on Crossover Day would legalize video poker in Georgia.  That is not the case.  HB487, which passed the Georgia House by a vote of 166-4, does not even mention the word “poker”.  It also does not repeal Georgia Code 16-12-20, which specifically makes any electronic device that uses playing cards and awards more than one free game credit illegal.  This law was passed in 2001 and was upheld by the Georgia Supreme Court in 2002.  Georgia Code 16-12-20 outlaws video poker in the State of Georgia without exception.

    HB487 would potentially get the Georgia Lottery into a new business.  The State’s gambling monopoly would be given the ability to regulate the “bona fide coin operated amusement machine business”.  This means that some machines that accept coins or bills, provide no product, and award credits as prizes, could now be regulated under the Georgia Lottery if the games fall under certain conditions.

    This type of business would become a privilege and not a right under this bill.  While video poker would not be one of those businesses, a variety of other entertainment machines would fall under the Georgia Lottery’s authority if HB487 passes the Georgia Senate.  Many of these machines are not what most would consider gambling devices.

    Games that are common in bars, arcades and even Chuck E Cheese restaurants could fall under the authority and taxation of the Lottery.  These games include pinball, video games, crane, claw, foosball, basketball, football, shooting, shuffleboard, kiddie rides, skee ball, air hockey, trivia, simulators, racing, virtual reality and skill redemption machines.

    Not all of these games would fall under the Georgia Lottery’s control.  Only Class B machines would qualify for regulation.  A Class B machine is defined as a mechanical device that a player can carry over free credits beyond just one game.  If a player is capable of winning points, credits or tickets that are in excess of their original investment, then the machine falls under the Class B category.  These credits could only be exchanged for certain merchandise available within the location where the credits were won.  Alcohol and tobacco products could not be purchased with points.  HB487 does allow points to be exchanged for lottery tickets, which is not allowed under current Georgia law.

    This is a unique gaming law as state lotteries typically only regulate games where players can win cash.  HB487 forbids cash prizes on any game.  It only seeks to regulate amusement devices where players can win more than one credit from playing.

    The goal of this bill is to tax adult skill redemption machines that have appeared in gas stations since video poker was banned in Georgia.  These games are skill based slot machines that qualify under laws that also legalize Chuck E Cheese and Dave & Busters games.  These machines generally have no regulation or taxation at this time.  There is no way for the State of Georgia to know how much money is being won by these establishments from their redemption machines.  This bill hopes to resolve this problem by requiring these machines to be networked and report directly to the Georgia Lottery.

    HB487 would give the Lottery the ability to tax Class B devices at a rate of 5% in the first year.  This tax rate goes up 1% each year until the Georgia Lottery reaches a 10% share of the net win.  Operators of Class B machines would also be subject to a $5,000 annual licensing fee on their machines, regardless of the number in operation.  Operators and suppliers would both be required to receive licenses.  Operator and distributor businesses would be forced to remain separate.  In other words, a retail establishment would not be allowed to own any Class B machines in operation on their property.

    Additional Power Not Allowed by HB487

    Language in HB487 specifically excludes the Lottery from adding games not already described as bona fide coin operated amusement games.  This means that the Georgia Lottery cannot later decide that a game, such as video poker, is legal without a modification to existing Georgia law.

    HB487 states:

    The corporation shall not expand, limit, or otherwise alter what constitutes a bona fide coin operated amusement machine and the permitted redemption related items, except that the corporation shall be permitted to authorize any ticket or product of the corporation.

    The Lottery can allow their tickets to be awarded as prizes, but they cannot alter other language in current gambling laws.  They also cannot allow alcohol or tobacco to be included as prizes without a change in Georgia law.

    Georgia Media Errors

    I do not generally point out other reporting errors on gaming bills in an article, but I feel that other published reports are so misleading that they need to be clarified.

    Some outlets even reported that video poker is already legal.  The first article published by the Atlanta Journal-Constitution reported:

    It allows video poker machines as long as they are registered and taxed

    This was quite a conclusion to draw from a bill that does not even include the word poker in it.

    Another AJC article stated:

    It would keep video poker machines legal as long as they are registered and taxed

    Video poker is not legal in Georgia now, nor would be if this bill becomes law.

    I contacted the AJC writers to find out how they interpreted HB487 in this way when poker and Georgia Code 16-12-20 are not mentioned anywhere within the language.  I did not receive a reply.

    Similar reports were published by many other Georgia media outlets.  It is hard to imagine how anyone that read the bill could have drawn this conclusion.

    The Vending Times drew a different conclusion than I did, but they did read the bill:

    However, HB 487 impacts far more than just poker. If passed, the bill would also regulate, license and tax all amusement devices, as well as jukeboxes.

    I have never put money into a jukebox and won extra credits.  Maybe there is some way to play a game of skill on a jukebox that could make it fall under a Class B license in Georgia.  If there is, I have never seen it.  General arcades and amusement equipment distributors should not be affected by this bill unless they own redemption machines.

    Gambling Opponents Should be Happy

    This bill provides the Georgia Lottery with revenue to fund the HOPE scholarship on games that are already legal in the State without expanding gambling.  This may change down the road now that a video lottery commission will be established in Georgia, but for now nothing is changing in a state that has a history of being opposed to gambling.  This bill does not allow the Lottery to establish video poker casinos like so many gambling opponents have feared.

    The games that would get regulated by the Georgia Lottery under this bill could not be banned without banning many other legitimate amusement machines.  This bill is simply a way to deal with gray machines that are operating without any taxation or regulation with the State of Georgia.

     

     

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