Suit filed to block video gambling law

A consortium of folks who operate coin-operated game machines in businesses across Georgia have filed a federal lawsuit to block the state’s new video gambling law.

The suit contends the new law infringes on the rights of the operators to do business with the machines’ owners and wrongfully restricts how they share profits from the machines.

Much of that business, according to the suit, is done verbally — with deals sealed essentially by a handshake rather than a written contract as the state mandates under the new law. Another new mandate says owners and operators must split profits evenly and share equally in the net receipts from the machines.

The law came about earlier this year, as the state stepped up efforts to regulate video poker and other coin-operated machines across the state by forcing businesses to register them and prevent prohibited cash payouts.

The businesses are seeking a temporary restraining order blocking portions of the law that commence Monday, the start of the new fiscal year. The case was assigned to U.S. District Judge Harold Murphy in Rome, who has scheduled a hearing for Friday afternoon.

The law went into effect in April when Gov. Nathan Deal signed House Bill 487.

A spokeswoman for state Attorney General Sam Olens, whose office will represent the state in the case, declined to comment on the suit.

The suit said business owners such as the plaintiffs typically negotiate contracts with owners of the machines that provide the owners with between 10 percent to 30 percent of the net revenue from each machine.

The new law, however, “essentially fixes the prices and changes the landscape of how these owners and operators have operated in the past,” said Charles E. Cox Jr., one of two attorneys for the plaintiffs. “Nothing’s wrong with having (the contract) in writing. It’s when the government tells you what the writing will be.”

The suit additionally called the law “draconian” because it applies not just to video poker machines but popular coin-operated games found in suburban arcades across the nation: pinball machines, claw machines, bowling machines, foosball or table soccer machines, air hockey machines, coin-operated billiard tables and so on.

Video poker machines, among the others, are already legal in Georgia. Regulation, however, has been lax, which is why Deal and lawmakers backed HB 487.

It requires that the machines be registered and taxed by the Georgia Lottery, which funds Georgia’s strained pre-k and HOPE college scholarship programs.

Stores where they are played may only award lottery tickets and vouchers for merchandise in the store, not cash, tobacco or alcohol. The machines must also be plugged into a centralized monitoring system that would track how much money is being spent.

Violators could be fined up to $25,000 and receive up to five years in jail.

Lottery officials declined to comment on the suit. A spokeswoman for Deal referred questions about the suit to the attorney general’s office.

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