Subcommittee advances HB 1197 to tighten COAM rules, allow noncash prizes at tournaments

The House Regulated Industry Subcommittee on lottery oversight and gaming advanced House Bill 1197 in an afternoon meeting, recommending the measure for further committee consideration.

The bill, introduced by the committee chair and sponsor Chairman Powell, would change how regulators handle COAM (coin-operated amusement machine) violations, require progressive discipline rather than accumulating multiple charges into one severe penalty, explicitly allow location owners to run darts and billiards tournaments that award noncash prizes such as gift certificates, and create a disgorgement mechanism intended to deter frivolous contract-related claims by diverting proceeds to the state lottery.

"Pool tables are a COAM machine. They take coins," Chairman Powell said in explaining why the statute needs updating; he described sections in the bill that would require progressive discipline and said the measure clarifies procedures for appeals of administrative hearing decisions to the business court of Fulton County.

Les Schneider, representing the Georgia Amusement and Music Operators Association, told the subcommittee the industry has improved but still needs statutory updates. "Progressive discipline doesn't sound very sexy," Schneider said, "except if you are the location owner or the master who feels that they've had charges stacked against them and they've had citations without an ability to correct behavior." He urged the subcommittee to adopt a stepwise penalty system so operators who make first-time or minor mistakes can correct them without an immediate license revocation.

Schneider also described a reporting proposal in the bill that would require location owners to report the number of noncash lottery-ticket redemptions on a quarterly basis so those owners can document redemptions and avoid penalties. He said the reporting requirement aims to help operators defend themselves if regulators question redemptions recorded as merchandise, gift cards, or replays.

On the bill's dispute-resolution provisions, Schneider said the disgorgement clause in section 8 is aimed at discouraging frivolous litigation that freezes receipts and delays contract resolution. "If the hearing officer finds that it was a frivolous litigation ... their portion will be disgorged from them and given to the lottery," Schneider said, and suggested proceeds could support Pre-K and HOPE programs as one possible beneficiary.

A committee member asked how the bill prevents masters or license holders from using tournaments as an inducement to provide cash or other improper payments. Schneider said the draft limits tournament authority to the location owner and removes prior language that allowed masters to run such events: "It can only be put on by the location owner, and they cannot receive any money from the master license holder." The sponsor and testifier said prizes must be noncash; they cited prior agency positions that had effectively blocked such competitions at some venues.

Committee discussion also touched on arbitration and enforcement records. Committee members asked whether masters or location owners typically win disputes; Schneider said no centralized statistics exist, noting arbitrations are handled by multiple outside firms and that data are not consistently reported back to the lottery.

At the meeting's close, Chairman Powell moved a due-pass recommendation for HB 1197; the motion was seconded and approved by voice vote. The chair stated the bill "goes to bid committee" in the transcript's record of next steps.

The subcommittee adjourned after advancing the bill; no roll-call vote tally was recorded in the public transcript.