What GLC Compliance Inspectors Check After July 1: A Georgia COAM Operator's Inspection Survival Guide

Most Georgia COAM operators know the July 1, 2026 deadline exists. Fewer have thought carefully about what happens after July 1 — specifically, what the Georgia Lottery Corporation's Compliance Inspectors will be checking when they walk through the door.

The GLC doesn't just issue licenses and walk away. It maintains a dedicated team of Compliance Inspectors who conduct unannounced location visits, work alongside the Georgia Bureau of Investigation, and respond to tips submitted through an anonymous reporting line. According to GLC guidance, the two most high-profile violations inspectors find at COAM locations are cash payouts and inducements — and after July 1, the former becomes dramatically easier to enforce.

This guide covers every category of compliance inspectors evaluate, how the July 1 transition changes the enforcement landscape, and what Georgia COAM operators should have ready before an inspector shows up.

Who Are GLC Compliance Inspectors?

The GLC's COAM Division has its own Compliance Inspectors — a distinct unit that focuses exclusively on COAM location compliance. These inspectors conduct routine inspections and respond to assigned investigations. They work in close coordination with local law enforcement and the GBI's Investigative Division, which operates a dedicated COAM anonymous tip line.

Tip-offs are a significant source of inspections. A competitor, a disgruntled employee, or a player who saw something suspicious can file an anonymous report, which gets routed to a Compliance Inspector for follow-up. Inspections can be triggered by quarterly reporting anomalies as well. The GLC reviews Gross Retail Receipts data every quarter — discrepancies between machine activity and reported figures can draw attention.

Inspectors have authority to review your machines, records, and payout practices on-site. Understanding what they're looking for is the first step to passing cleanly.

Violation #1: Cash Payouts — The Ground Shifts on July 1

Cash payouts have been prohibited for years under Georgia COAM law, but enforcement has been complicated by years of operator ambiguity. That ends on July 1, 2026.

Under HB 353, effective July 1, 2026, the only legal forms of redemption for Class B machines are replays, lottery products, and nonreloadable and reloadable gift cards. The statute is explicit: "no other form of redemption shall be allowed." Cash is not a permitted form of redemption — full stop, no exceptions, no grace period.

What this means for inspections: if a Compliance Inspector observes a staff member paying out winnings in cash, or finds evidence of cash payouts in your records, there is no longer any ambiguity about whether a violation occurred. Before July 1, some operators tried to argue that cash was being issued as "change" or under some other framing. After July 1, those arguments disappear. Class B cash payouts are violations of both GLC regulations and Georgia statute (O.C.G.A. § 50-27-71.1).

Inspectors may also check whether your gift card payout system is properly configured — whether cards can only be loaded at the location where the machine is played, whether the denomination matches the credits being redeemed, and whether the system is approved by the GLC. Operators using unapproved payout methods — even gift cards from non-compliant providers — could face violations.

Violation #2: Inducements — A $50,000-Per-Incident Risk

Inducements are the second most common violation GLC Compliance Inspectors find — and many operators don't fully understand what qualifies as one.

Under Georgia law, an inducement is any item of value exchanged between a master licensee and a location licensee (or their family members) outside of the approved revenue-sharing arrangement. The statute covers a wide range of transfers, including:

• Loans or lines of credit extended to the location owner
• Payment of rent or utilities for the location
• Fee waivers or discounts on products or services
• Property transfers or gifts
• Any other "consideration" beyond the standard revenue split

The penalty structure is severe. Location owners found in violation of the inducements prohibition shall have all of the location owner's state business licenses revoked for one to five years per incident and shall be fined up to $50,000 per incident, and may be required to repay all incentive fees or payments received from the master licensee. For a convenience store or restaurant, losing all state business licenses for even one year is effectively a shutdown.

Master licensees who offer inducements face their own penalties, including loss of their master license. The GLC has made clear that inducements undermine the fairness of the COAM marketplace, and they pursue these cases actively.

What inspectors look for: unusual financial arrangements between the master licensee and location, rent payments that appear in master licensee records, any gifts or loans documented in communications or financial records, and tip-off information suggesting a location received preferential treatment.

The 50% Quarterly Gross Receipts Rule

A third area of inspection focus is the 50% rule: no location owner or operator may derive more than 50% of its quarterly gross retail receipts from Class B COAM machines. This restriction exists because Georgia law requires COAMs to be an ancillary activity — not the primary purpose of a business. A gas station, a bar, a restaurant — these must have a legitimate primary business generating meaningful revenue outside the machines.

An important change took effect in 2024: the GLC shifted from measuring this rule on a monthly basis to a quarterly basis. This means quarterly Gross Retail Receipts reports — due on the 20th of January, April, July, and October — are the data the GLC uses to evaluate compliance with the 50% rule.

The July 20, 2026 Q2 report will be the first filing to reflect a full period of gift card payout operations. Inspectors and GLC analysts will have accurate data on what your machines generated versus what your non-COAM business generated. Locations where COAM receipts are creeping above 50% of total quarterly receipts are at risk.

Notable exemption: fraternal benefit associations and veterans organizations that are tax-exempt are not subject to the 50% rule.

If you're approaching the 50% threshold, the solution is business development — increasing revenue from your non-COAM lines of business — not manipulating reporting figures. Understating COAM receipts creates its own enforcement risk and carries additional penalties.

Record Retention: Five Years Plus Current Year

One of the clearest requirements inspectors verify is record retention. Under GLC regulations, COAM location licensees must retain records of all COAM transactions for no less than the last five full calendar years, plus current year-to-date records.

This is not a minor administrative detail. If an inspector requests records from 2021 and you can't produce them, you're in violation — even if everything about your current operations is perfectly compliant. The five-year lookback means operators need a systematic approach to record storage: digital records are strongly preferred, with clear backups.

With the July 1 transition to gift card payouts, record-keeping takes on new complexity. Gift card payout systems must generate transaction-level records showing which machine, what credit amount, what card was issued, and when. If your gift card provider doesn't generate and store this data automatically, you need to understand how you'll produce it if an inspector asks.

Loop Pay's platform maintains complete transaction records accessible through your operator dashboard — including payout date, machine ID, card value, and card number — which satisfies the GLC's record-keeping requirements without any additional data entry from your staff.

License Posting and Machine Registration

Two additional items inspectors verify quickly at any location visit:

License Posting

Your current COAM Location License must be displayed prominently at the location. Inspectors check that the license is valid (not expired), displayed publicly, and matches the location it covers. With the 2027 licensing period beginning July 1, operators who have renewed should have their 2027 license accessible immediately — don't rely on a printed copy of your 2026 license after June 30.

Machine Registration

Every COAM on your premises must be registered with the GLC and authorized for that specific location. Inspectors cross-reference the machines physically present against the machines registered under your location license. Unregistered machines — even if they're powered off — are a compliance violation. If you've recently added or removed machines, make sure your registrations reflect the current state.

The GBI's COAM Anonymous Tip Line

Compliance inspections don't only come from the GLC's internal scheduling. The Georgia Bureau of Investigation operates a dedicated COAM anonymous tip line in coordination with the GLC. Anyone — a competitor, an employee, a player, a neighbor — can file a report, which the GBI routes to the appropriate investigative unit.

This has practical implications: operators who are compliant shouldn't fear anonymous tips, but operators who are cutting corners in any area should understand that tips are a meaningful driver of enforcement activity. The transition to gift card payouts, in particular, is a moment when competitors who observe cash payouts at nearby locations are likely to use this channel.

How to Prepare for a Compliance Inspection

You don't get advance notice of a compliance inspection. Here's what to have in order before July 1 so you're ready whenever the inspector arrives:

Before July 1

• Get gift card payouts live and tested. Every staff member who handles payouts should know exactly how to load a card. There should be no cash in the payout process, and no confusion about the procedure.
• Post clear signage for players explaining the gift card payout process. Inspectors look for player-facing clarity about how redemption works.
• Renew your 2027 license through gacoam.com before June 30 to avoid late fees and have your new license ready to post on July 1.
• Audit your records. Can you pull COAM transaction records for 2021, 2022, 2023, 2024, 2025, and 2026 within 30 minutes? If not, fix that now.
• Review any financial arrangements with your master licensee. If there's anything that could be construed as an inducement — a loan, a fee waiver, a rent arrangement — get legal advice before an inspection surfaces it.

Ongoing After July 1

• Track your quarterly GRR ratio. Know what percentage of your quarterly gross retail receipts comes from COAMs. If it's approaching 50%, take action before your Q2 report is due July 20.
• Verify machine registration any time you add or remove machines.
• Keep your gift card transaction records current. Your payout provider should be the system of record — confirm you can export complete data on demand.
• Stay current on GLC communications. The GLC posts compliance notices at gacoam.com. Subscribe to updates so you're aware of any new requirements as they emerge.

The Big Picture: July 1 Is an Enforcement Reset

Georgia's COAM compliance environment has been evolving for several years, but July 1, 2026 represents the clearest bright-line enforcement shift in the industry's recent history. Before July 1, the payout landscape had ambiguity — gift card pilot programs, non-reloadable cards, and legacy cash practices existed in various forms. After July 1, the rules for Class B machines are binary: gift cards or lottery products, nothing else.

Compliance inspectors have the same bright line. There's no need to determine intent or evaluate circumstances when a staff member hands a player $20 in cash on July 2. It's a violation. The only variable is what happens next — whether it leads to a warning, a fine, a suspension, or a referral to the GBI.

The operators who will be fine are the ones who run clean operations: gift card payouts live, records maintained, licenses current, revenue ratios within bounds, and no inducement arrangements with their master licensee. That's not a complicated standard to meet — but it does require everything to be in order before July 1, not after.

With 49 days left, there is still time to get there. Use them.