Video Poker Machines

Crane: Gaming bill 'bad business'

by Sarah Fay Campbell

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Coweta County Sheriff's Office

Sheriff’s Office Deputy Troy Foles counts money after a raid on a Coweta County store that was alleged to be illegally giving cash payouts to video poker players.

A bill approved in the recent session of the Georgia General Assembly will make sweeping changes to the rules regulating video poker machines, if it is signed into law by Gov. Nathan Deal.

State Senator Mike Crane, R-Newnan, said HB 487 is “one of the thing that passed that I’m most disappointed with.”

“The way they tried to sell it and what I heard was to crack down on all the illegal gaming,” Crane said this week.

Under House Bill 487, all the licensing fees and fines related to coin operated amusement machines — which includes not just video poker machines but also video games, pinball, Skee Ball, and even children’s coin-operated rides, will now go to the Georgia Lottery Corporation and be considered lottery proceeds. The corporation will also get 5 percent of the net proceeds of video poker machines starting in 2014, and an additional percent every year after that until it reaches the maximum of 10 percent.

Under current law, the video poker machines are legal as long as the payouts are only in store credit or merchandise. The credit can’t be for alcohol, tobacco, firearms or lottery tickets. The new bill would allow the payouts to be used for lottery tickets.

Gov. Deal is expected to sign HB 487 into law.

Currently, all “bona fide coin-operated amusement machines” are regulated by the Georgia Department of Revenue, which is also in charge of all state taxing operations, sales tax collection, and alcohol regulation.

The intent of the new legislation is to crack down on illegal cash payouts from video poker machines.

License holders for “Class B” machines, the official name for video poker machines, will be required to submit a report every month to the lottery corporation. The report must include the gross and net proceeds from every machine as well as the “gross retail receipts for the business location.”

Currently, license holders are required to prepare reports on the receipts of the machines themselves, but there is no requirement to submit them unless asked.

The bill increases the penalties for falsely using a license for a Class B machine. Currently, using a license falsely to engage in illegal gambling is a misdemeanor. Under HB 487, making a false statement on a license application or renewal application, or making any “material false entry” in any record or report submitted to the lottery corporation, would be a felony.

By July 1, 2014, all Class B machines will have to be linked to a state accounting terminal that “shall connect to a single point of commerce for the purpose of accounting and reporting to the state.”

The accounting terminal must be designed and operated to allow the “monitoring and reading of all Class B machines for the purpose of compliance” with all state regulations.

No new licenses for video poker or other Class B machines could be issued until the accounting terminal is up and running. Current license holders can continue to renew their licenses.

Once the accounting terminal is up and running, the lottery corporation will begin to retain 5 percent of the net receipts of all licensed machines. The share will increase each year until it hits the maximum of 10 percent.

The machine operators will have to put the money owed to the lottery corporation in a segregated bank account within one day after it is collected.

Crane thinks the ultimate intent is to “introduce video gaming for the lottery ... in a very roundabout way.”

The 32-page bill is extensive.

“All the machines, all the foundational stuff, is buried within the law to do that,” Crane said. “By putting all the machines under the control of the lottery and the way it is structured, I believe it is just a matter of time before every gas station” will have games that are tied to the lottery.

“It is an expansion of the lottery in Georgia and an expansion of monopolized gambling in the state,” Crane said.

“I don’t like how they tried to sell it,” Crane said, and “I think it is a bad way to fund state operations.”

“The state sits there and says how bad it is, that we have to regulate it, this illegal gambling that is going on. They talk about how detrimental it is and how bad for society it is,” Crane said. But then “they turn it around how this is a great thing,” he said. “All they have to do is tie it to the HOPE and everything is sunshine and roses.”

“It is bad business for Georgia,” Crane said. In the Senate, they introduced an amendment that would have given cities and counties the ability to ban the machines entirely.

“That got stripped out in the House,” Crane said. They also tried an amendment that would have banned all Class B machines in the state.

“If they are so bad, just ban them,” Crane said. “But both of those provisions were stripped out, and so the thing went through as they originally intended, under the auspices of cracking down on illegal gambling.”

Crane added that he’s not sure the new law will do a lot to stop illegal cash payouts. “How do you know they are not paying cash? What about the machines they don’t hook up, that they do in the back room? If they are doing it illegally now do you think they’re going to have a problem doing it illegally tomorrow?” he asked .

“I don’t buy the way they approach things.”



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