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HOPE Scholarship—and Gov. Deal—could benefit from new video gaming law

Controversial bill will raise money for Georgia Lottery and maybe its most ardent backer

The term “adult redemption game” may sound evocative, perhaps even near-poetic—until you realize the words are vending-industry jargon for a videogame that allows high-scorers to win merchandise vouchers or lottery tickets while perched on a stool in the back of a truck stop or convenience store.

When Nathan Deal signed House Bill 487 into law last Thursday, he disappointed the Georgia Christian Coalition and surprised a few politicos who believed the governor flip-flopped on the issue of gambling. But what does the new law, which creates a new system for regulating so-called Class B gaming machines, actually change?

According to Les Schneider, attorney for the Georgia Amusement and Music Operators Association, less than you might think—especially if you’d heard that the new law legalizes video slot machines or is likely to turn the corner gas station into a third-rate casino.

Misconceptions have swirled around the bill, even among some industry representatives. Even as he argued in favor of HB 487 in an April 4 AJC editorial, Jim Tudor, president of the Georgia Association of Convenience Stores, mistakenly said it “regulates video poker games.” Actually, Schneider explains, the newly signed bill doesn’t make any games legal that were previously illegal under Georgia law, a group that includes video card games or games of pure chance, such as those based on slots, dice or roulette wheels.

Instead, as far as the consumer is concerned, the biggest impact of the law won't be the kinds of games that can be played, but the potential prizes at stake. Beginning in 1991, Georgia legalized skilled-based games that allowed players to rack up winning scores that could be redeemed for non-cash prizes—otherwise known as the Dave and Buster’s business model. At convenience stores around the state, groceries, gasoline and lottery tickets were kosher as prizes, but not alcohol or cigarettes.

Then, in 2001, lawmakers outlawed the winning of lottery tickets. HB 487, which was strongly backed by Gov. Deal as a revenue boon to the HOPE Scholarship, reverses that prohibition. The new law also shifts the responsibility for regulating gaming machines from the state Department of Revenue, which still oversees regular arcade or Class A games, to the Georgia Lottery Corp. Lottery officials will license both the owners of the games and the owners of the locations where they operate. Ten percent of those license fees will go directly into the coffers of the HOPE Scholarship.

“I think you’ll see more enforcement and more transparency because of this law, and it will help with tax revenues,” says Schneider, who says unlicensed gaming machine and rogue operators had given the industry a black eye.

But there could be another, less visible impact of the new law, which imposes an 18-month moratorium on new licenses for gaming machine operators. Consider these facts:

  1. All new licenses must be approved by the Lottery Corp., which must also renew existing licenses by July 1
  2. The governor appoints the seven-member Lottery board
  3. Lottery Corp. President and CEO Debbie Alford was hand-picked last fall by Gov. Deal—a controversial move that led to criticism of overreaching and prompted one board member to resign, citing “undue influence” by the governor

We’ll lay three-to-one odds that some gaming operators—including those hoping to enter the Georgia market—will suddenly feel inclined to contribute generously to Deal’s reelection campaign to hedge their bets in favor of getting licensed by an organization over which the governor wields considerable control. It’s just possible that Deal wagered that such a windfall outweighed the ill will he'd feel from social conservatives from pushing a gambling bill.

After all, you can’t win if you don’t play.