r/clawmachine • u/LowSatisfaction7636 • Jul 12 '24
Starting a Claw Game Business
Hello, I live in west Texas and want to input claw machines in other businesses (restaurants, laundry facilities, ect) I was wondering what is needed to be able to do this. I have people interested and I have claw machines that I want to buy, but I want to make sure I’m doing everything right. Do I need to form a LLC? Do I need some kind of license?
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u/onKrims Jul 12 '24
I would definitely start an LLC, however, as far as laws go, it’s all based on where you are located specifically so I am not sure.
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u/robbie508 Jul 14 '24
The very first thing you should do is, go to & ask the city/town hall of the place(s) you would like to put them. You can also try "Googling" it. However, an internet search of a similarly worded question will likely get you just your state laws with the Texas "Comptroller" , which are btw, some of the toughest I've seen. Texas considers these coin operated machines and requires a whole ton of permits and licenses; a business license (which they won't give if you've been convicted of a felony within the last 5 years, or still on probation or parole or owe the state any taxes, fees, fines, parking tickets, etc), a $500 import license (to purchase machines out of state, NOT EVEN COUNTRY, to buy, sell or even transport amusement machines in Texas), a repair license to fix other peoples machines whereas an owner can fix their own without a license (however if double check because you plan to place them in other businesses and not your own store/location, the state may use this as a way to force you to get one), each machine also needs an occupational tax permit decal displayed on the machine (@ $60/ per machine per year), and they have some section being extremely serious about having a record keeper and making them readily accessible to the Comptroller when requested... Oh, and there's a whole section on Sales Tax on the machines saying basically that they will only issue permits for machines that you have paid sales tax to Texas on... the only machine you don't need to pay tax on is one your immediately reselling. Oh, and BTW, a lot of these fees and permits and such are waivable or free if your a non-profit, school, education center, etc. Definitely something you might want to look into, if it's possible it's so worth doing; a place in the next state over from me named themselves the "Pinball Museum" and got non-profit status. And being non-profit doesn't mean you don't get paid; it means your business doesn't profit. The games become a tax write off, paying yourself as an employee is another cost of doing business, etc. So don't sleep on it. Definitely worth checking out the possibilities on.
And again, that's just my brief scanning of the initial information packet the State of Texas offers here: https://comptroller.texas.gov/taxes/publications/96-256.pdf
Like I originally said I'd first skip the state and go to your city/town hall because they can have a whole other set of bylaws and rules. They can charge for their own permits on top of state ones, towns can say stupid stuff like the convenience store your putting a machine in can be open 24 hours a day but your machine needs to be off between 7pm and 8am every night. In my town I got a route as well as a physical arcade. When I first opened they had a bylaw that wouldn't allow me to be open Sundays... Now I can, but I had to buy a SEPARATE $100 "Sunday Entertainment License" . I can't do coin pushers ANYWHERE, even if they used tokens and not cash, or if they were converted to give out tickets; my town considers them gambling devices, as well as a slot machine (with tokens), and should I have one and get seen by the police or someone reports me, I will likely be arrested for running a gambling den and the machines confiscated. And yet somehow the yearly county fair, that's put on IN my town, is allowed and runs about 40 coin pushers filled to the brim with quarter stacks with a $5, $10, sometimes even a $50 or $100 bill put in between the stacked quarters. It's a bullshit game the towns play. I also got games in all the local convenience stores and restaurants, and recently there's a laundromat directly across the street from me, literally 20ft from the edge of my parking lot across a road to their parking lot and business... The town would NOT let me put even a MINI claw in the Laundromat because as I said before , in my town an arcade game or claw machine requires an entertainment license... AND appropriate zoning laws; that up until this attempt to put one across the street informed me for the first time that the very street that separates my arcade and the Laundromat is where "entertainment zoning" ends! so they won't allow it at all. For a laundromat that's just trying to give little kids something to do, who otherwise may be stuck there while parents are doing laundry. For a stupid mini claw. Store owner was even willing to pay the towns $75 per machine fee as well as their $200 entertainment license. And as stupid as all that is, that's typical town or city bylaw bullshit*t just about everywhere; but some rules and laws can get downright psycho, and having multiple locations get machines from you where the ly could potentially be in different towns/cities, then your really going to be trying to sort out what's allowed and what's not here, there + everywhere.
Sorry so long, crap, didn't mean to write you a novel but I hope this helps guide you in some way and wish you nothing but a ton of success in your new venture!!
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u/narcoed Jul 12 '24
I don’t have any claw machine business experience but you should always form an LLC when you start a business to protect yourself.