What Are COAMs In Texas And How Do They Differ From Gambling Machines?

Coin Operated Amusement Machines, COAMs for short, represent a gray area for states where gambling is concerned.

While this is not as true in Texas as, say, Georgia, understanding where they fit in the gambling landscape might be important. Especially as Texas’s gambling future will be under discussion during the coming legislative session.

COAM is the legal way of describing a range of machines, which most people are already intimately familiar with. They are played for “amusement, pleasure, or skill.” From jukeboxes to classic arcade-style video games, most of us have dropped pockets of coins into COAMs over the years.

The defining feature, as the name implies, is that all COAMs are operated by or after inserting a coin, token, metal slug, bill, electronic card, or check, as laid out in the Texas Occupations Code Chapter 2153.

As Texas sets forth a path to legalized gambling, maybe, here’s a brief history of COAMs in the Texas legal code. And distinguish exactly what qualifies as a COAM and clarify when COAMs shift from legal amusement to illegal gambling machines.

The 1969 Vending Machine Regulatory Act

The Vending Machine Regulatory Act (VMRA), which passed the Texas state legislature in 1969, regulated who could own vending machines, including COAMs.

Also, how they were to be licensed and taxed. And what regulations could be applied to enforce payment of taxes and fees.

In 1971, Texas established the Texas Amusement Machine Commission to enforce the regulations of the VMRA. The VMRA and the Commission focused heavily on establishing oversight for the people dealing with these machines. Meaning those engaged in:

• Manufacturing
• Buying
• Selling
• Renting
• Leasing
• Repairing
• Transporting them

However, a provision in the act also made the added restriction that anyone who had a financial interest in a vending machine could not also have a competing financial interest in a business that sold alcohol to be consumed on-premises.

Take it to court

In short, it stated that a bar owner could not also own, say, a jukebox or an arcade machine. This, as anyone who’s ever been in a bar could imagine, did not sit well with bar owners.

And so, in 1972 a group of bar owners led by Harry Thompson, a tavern owner, took Robert S. Calvert, the Controller of Public Accounts of the State of Texas and member of the Texas Amusement Machine Commission, to court. The bar owners claimed that the VMRA was a constitutional violation.

They claimed that, while they owned COAMs, they were not “dealing” in them. They, as bar owners, placed them in their taverns to liven up the place. The machines were merely incidental and not the “business” of the tavern owners.

The Supreme Court ruled in Thompson and Co.’s favor, and in 1974, the VMRA was deemed unconstitutional. The VMRA was then stricken from the records. And the Texas Amusement Machine Commission carried on its other regulatory duties until it was formally abolished in 1988.

Texas Occupations Code Chapter 2153

In 1999, Texas revisited the regulations of COAMs with the inclusion of Chapter 2153 in the Occupations Code. This chapter, first and foremost, established the state Comptroller as the chief administrator of COAM regulations.

It went on to delineate the types of machines that would qualify as COAMS and those that wouldn’t. It also made special provisions for overarching regulations regarding COAMs, according to the Texas Penal Code on Gambling.

Your toilet is a service and not for pleasure

The machines that did not fall within the purview of Chapter 2153 were what the Code called “service coin-operated machines.” These included your:

• Payphones
• Pay toilets
• Washer/dryers
• Other machines that dispense only a service

Owners of these service machines were not subject to the same taxes, registration fees, and penalties as owners of machines that dispensed or afforded amusement, skill, or pleasure.

So what exactly are COAMs?

As the code puts it, the term Coin-Operated Amusement Machine includes:

“a marble machine, marble table machine, marble shooting machine, miniature racetrack machine. Miniature football machine, miniature golf machine, miniature bowling machine, billiard or pool game. Or machine or device that dispenses merchandise or commodities or plays music in connection with or in addition to dispensing skill or pleasure; and (B) does not include an amusement machine designed exclusively for a child.”

Under this regulation were likewise included basic arcade machines.

In all of the above such cases, COAMs are completely legal under Texas law. Assuming that all fees and permits are paid and displayed. However, the Texas Penal Code makes further stipulations on COAMs.

Clear stipulation between COAMs and gambling devices

Most notable is the clear stipulation that anyone who “plays and bets for money or other things of value at any game played with cards, dice, balls, or any other gambling device” is acting illegally unless:

“the contrivance rewards the player exclusively with noncash merchandise that has a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less.”

The short version here, none of these games qualify as COAMs:

• Slot machines
• Keno
• Video card games

Therefore, these are illegal gambling devices prohibited in Texas. So, the distinction is quite clear in Texas between what most people recognize as a casino-style game machine and an arcade machine or coin-operated bar game.

The future of gambling on COAMs

The 2023 Texas Legislative Session will likely see its largest push ever to legalize gambling in various forms. One of the main pushes comes from a Super PAC, led by the family who owns the Sands hotel in Las Vegas.

Sheldon Adelson, former Sands CEO, died in 2021 and is survived by his wife and present CEO of the PAC, Miriam Adelson. The PAC’s goal is the construction of four casino resorts in four major Texas areas:

• Austin
• Dallas/Fort Worth
• Houston
• San Antonio

Should this legislative push gain ground, you can bet that rows of Vegas-style slot machines will be on display, along with online casinos in Texas.