Gift Cards vs Lottery Tickets: Which COAM Payout Method is Right for You?

When HB 353 eliminates cash payouts in July 2026, Georgia COAM operators will have exactly two options for paying out winnings: gift cards or Georgia Lottery tickets. Both are compliant, but they're very different in practice.

In this post, we'll compare these options across every dimension that matters—player experience, operational complexity, cost, compliance, and more. By the end, you'll know which option makes sense for your operation.

The Two Options at a Glance

Option 1: Gift Cards (Prepaid Visa/Mastercard)

Gift card payouts work by loading a player's winnings onto a prepaid Visa or Mastercard. The player can then use this card anywhere those payment networks are accepted—which is essentially everywhere.

Pros of Gift Cards

• Maximum flexibility for players – Use at any store, restaurant, gas station, or online retailer that accepts Visa/Mastercard
• Exact payout amounts – Load precisely $47.50 instead of rounding to ticket denominations
• No physical inventory – Cards are loaded digitally, no storage or security concerns
• Automatic compliance records – Every transaction is digitally logged
• Better player experience – Players prefer the flexibility of a payment card
• ATM access – Some cards allow cash withdrawal at ATMs (where permitted)

Cons of Gift Cards

• Transaction fees – Providers charge per transaction or percentage fees
• Requires technology – Need kiosk or terminal for loading
• Player learning curve – Some players may need to adjust to the new system

Option 2: Georgia Lottery Tickets

With lottery ticket payouts, you give players Georgia Lottery scratch-off or draw game tickets equal to their winnings value.

Pros of Lottery Tickets

• Simple concept – Easy for players to understand
• Existing lottery infrastructure – Georgia Lottery is well established
• No technology required – Just hand over physical tickets

Cons of Lottery Tickets

• Limited denominations – Can't pay exact amounts; must round to ticket values
• Physical inventory management – Must stock, secure, and track tickets
• Theft and loss risk – Physical tickets can be stolen or lost
• Player dissatisfaction – Many players don't want lottery tickets
• Limited redemption – Can only use at lottery retailers
• Manual tracking – More difficult to maintain compliance records
• Uncertain value – Player receives tickets, not guaranteed value

What Do Players Actually Want?

This might be the most important consideration. We've talked to COAM players across Georgia, and the preference is overwhelming: players want gift cards.

Here's what they tell us:

• "I can use a Visa gift card to buy groceries, gas, or anything I need."
• "With lottery tickets, I'm just gambling again. I want my winnings."
• "I don't play the lottery. Why would I want lottery tickets?"
• "Gift cards feel like real money. Tickets feel like... tickets."

Player satisfaction directly impacts your business. Happy players come back. Unhappy players go elsewhere.

Operational Considerations

Inventory Management

Gift cards: No physical inventory. Cards are loaded digitally on demand. You never run out, and there's nothing to steal.

Lottery tickets: You need to maintain physical ticket stock. This means tracking inventory, securing tickets, reordering before you run out, and dealing with potential theft or loss.

Staff Training

Gift cards: Staff learns to use a kiosk or terminal. It's similar to processing a credit card transaction—straightforward with minimal training.

Lottery tickets: Staff must calculate ticket combinations, count and verify tickets, and maintain accurate records. More room for error.

Compliance Reporting

Gift cards: Every transaction is automatically recorded with timestamps, amounts, and location data. Reports are generated automatically.

Lottery tickets: Manual record-keeping required. Staff must log each payout, ticket serial numbers, and amounts. More labor-intensive and error-prone.

Cost Comparison

Gift card providers charge transaction fees, typically either a flat per-transaction fee or a small percentage of the payout amount. This is a real cost that lottery tickets don't have.

However, consider the hidden costs of lottery tickets:

• Staff time for inventory management
• Secure storage requirements
• Potential theft and loss
• Manual compliance record-keeping
• Player dissatisfaction leading to lost business

When you factor in these hidden costs, gift cards are often comparable or even cheaper than lottery tickets—while providing a far better player experience.

Our Recommendation

For most Georgia COAM operators, gift cards are the clear winner. They offer:

• Better player experience and retention
• Simpler operations with no physical inventory
• Automatic compliance tracking
• Exact payout amounts
• Maximum flexibility for players

Lottery tickets might make sense in very specific situations—perhaps a location with extremely low payout volumes where the simplicity of handing over a ticket outweighs the downsides. But for the vast majority of operations, gift cards are the way to go.

Making the Switch

If you've decided gift cards are right for your operation, here are your next steps:

1. Research providers – Look for HB 353 compliant solutions with good pricing and support
2. Request demos – See how the system works in practice
3. Plan your timeline – Don't wait until the last minute before July 2026
4. Start early – Early adopters get better pricing and more support