Special Report: Video gambling machines

Special Report: Video gambling machines
46 stores were raided in FY 2016 (Source: WALB)
46 stores were raided in FY 2016 (Source: WALB)
43 arrests were made in FY 2016 (Source: WALB)
43 arrests were made in FY 2016 (Source: WALB)
Nainesh Patel (Source: WALB)
Nainesh Patel (Source: WALB)
GBI Agent Cindy Ledford (Source: WALB)
GBI Agent Cindy Ledford (Source: WALB)

ALBANY, GA (WALB) - According to GBI agents, more than $1 billion is funneled through Coin Operated Amusement Machines every year in Georgia. Their existence, in some places, has created what GBI agents call the best example of organized crime.

The machines are legal, but the method in which some stores pay their winnings is not. It's causing a big problem for law enforcers.

GBI agents go undercover into more than 4,000 stores across Georgia and see how stores pay out winnings. Stores can pay out winnings in lottery tickets, gas, or store credit. They said many stores don't do that though.

Nainesh Patel is one of thousands of convenience store owners in Georgia. His five coin operated amusement machines, or COAMs, are some of more than 20,000  in those stores.

"My lottery sales were down, but now since these came, we have increased lottery sales and also my gas sales too," said Patel, owner of the Shell Station on Old Dawson Road in Albany.

He said they're good for business, even when people hit it big. "If someone wins $500 or $300, they can buy the whole roll. Usually they don't do that, but sometimes if you hit it big, they buy the whole roll," said Patel.

A sign clearly states how Patel pays out winnings, in lottery tickets or store credit. He falls into a group of store owners playing by the rules.

GBI agents said not all stores do, and the machines are causing trouble. "A lot of addiction is fed on these machines. It is very highly addictive behavior," said Cindy Ledford, special agent in charge of the GBI's Commercial Gambling Unit. "The money going into these machines is unlike anything that we imagined."

The total was over $1 billion. "Our purpose and our goal is just to go out and we go into these stores and we play. We see, are you doing it the right way or are you doing it the wrong way?" said Ledford.

They find many stores are doing it the wrong way. "In the businesses that are doing it wrong, it is organized crime at its best," said Ledford.

Because of that, store raids have become common in Georgia. The investigations begin when agents with her team go undercover and play the games.

"If you pay cash, we're going to turn our focus on you and we're going to see if we can establish a patron of behavior. And then you'll end up with a team of GBI agents coming in to your store," said Ledford.

Ledford said the businesses paying cash aren't rag-tag operations. "They know what they can and cannot do. They know the law very well. They will do what they need to do to try to circumvent that."

Last fiscal year, 43 arrests were made in 46 store raids. That includes 11 made in Terrell County earlier in May of this year. In that case, agents said Hemant Patel ran millions of dollars through machines at several different stores.

The crimes don't stop there though. "We're looking at taxes not paid; we're looking at money laundering; we're looking at racketeering. I mean we've investigations spider into a number of charges," said Ledford.

The problem, Ledford said, is not isolated to one part of the state or one socioeconomic class. "They can be from all classes of individuals, it doesn't matter. Gaming affects everyone," said Ledford.

The store owners and clerks who pay cash all face felony charges. While they may never go to prison, agents want that charge to stick.

"If we can ensure that a felony conviction is on a record for these license holders, they can't get a license in the state of Georgia again through the Georgia lottery," said Ledford.

The state also can seize the businesses and profits made through the gambling. Ledford said there are many businesses that follow the rules though.

It's a no-brainer for Patel. "If you pay cash, that's not worth losing the whole business," said Patel.

Ledford said the illegal gambling also leads to more robberies and crime because robbers know there is more cash inside. While the unit is new, they do go back and check these stores when they reopen.

The prosecution of these cases can take a while. District attorneys can go after all of the store owner's property and their stores.

That money and property go back to local jurisdictions for whatever purpose they choose. For example, Ledford says the Bibb County D. A. dedicated a large sum of money to building a shelter for at-risk girls.

The Georgia Lottery and Department of Revenue assist on all those raids.

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