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Tip jar law is doing its job

January 26, 1997

By LAURA ERNDE

Staff Writer

When the Washington County Gaming Commission doles out its next round of tip jar proceeds on Monday, local charities will have received a total of $1.28 million because of the 18-month-old gambling law.

The law's framers, along with those who are living under the law, are generally satisfied that it is doing what it was intended to do.

"We wanted accountability, we wanted control and we wanted the proceeds of gambling to benefit the charities of Washington County," said Sen. Donald F. Munson, R-Washington. "I think the law, in general, is working pretty well. It provides services to a lot of people, thereby taking some of the burden off government."

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People in Washington County gambled nearly $55 million on tip jars during the first year gaming was regulated. After the winners were paid, $9.6 million was left over for expenses and charity, commission records show.

Gaming Commission Chairwoman Sue Tuckwell said she would like to see even more gambling profits going to charity.

"It's amazing what people will spend on gambling. I'm sure gambling, in general, in the whole county is underreported," she said.

The law has dramatically increased the amount of tip jar profits going to charity, Internal Revenue Service and Gaming Commission records show.

Before tip jars were regulated, the county's clubs and taverns gave about $500,000 a year to charity, according to financial information returns filed with the IRS.

In the first year the tip jar law was in effect, the Gaming Commission distributed $586,000 in proceeds from taverns alone, said commission Coordinator Kathy Sterling.

Now that the law has been changed to require clubs to give some of their tip jar profits to the county Gaming Fund, the fund's receipts are soaring.

This year, the fund is on pace to give $1.3 million to charity, she said.

By fiscal 1999, the amount given to charity is expected to reach $2.15 million.

"The question I would ask is where was all that money going before the law was in place. That's a tremendous amount of money. It was simply just going in somebody's pockets," said Washington County Commissioner James Wade.

Unfair advantage?

Some bar owners believe the law still gives private clubs an unfair advantage, even though it was revised in July 1996 to force clubs to turn over some tip jar money to the Gaming Fund.

Tavern owner Fred Appel believes the average person would be surprised to know the difference in Gaming Fund money given from taverns and from clubs. That's a figure the Gaming Commission does not track.

For example, Appel makes $27 on a $70 tip jar sold at his tavern, the Appeltree Inn in Hancock. But the private clubs, who are now required to give 5 percent of profits to charity, make $58, he calculated.

"People would see what these little businesses are doing compared to what the clubs are giving," Appel said.

Appel said tip jars are about half of his business and he employs two people to run them.

"Today, if you do not have gambling, you do not have a business. It's one of those necessary evils," Appel said.

On Monday, the commission will distribute $693,000 in Gaming Fund receipts from the first half of fiscal 1997.

By law, 40 percent of the outlay goes to the Washington County Fire and Rescue Association.

The first year of the law, that meant about $8,000 from the Gaming Fund, said Fire and Rescue Coordinator Jerry Reed.

"That was like a pittance from what people expected," Reed said.

But in fiscal 1997, each company expects to get about $25,000 this year from the fund. That's enough to pay for 25 sets of fire turnout gear or a year's worth of payments on a new ambulance, he said.

Reed still doesn't like the idea of gambling money paying for emergency services.

"This is a public service for the people and the people should fund that public service," he said.

Some worry that charities will become too dependent on gambling money.

"If the proceeds from tips would ever stop, the county commissioners would have some real tough decisions to make," Munson said.

Room for change

Many people would like to see changes, however minor, to the tip jar law.

Proposing any changes this session of the Maryland General Assembly would be fruitless, local representatives say. Gov. Parris N. Glendening has promised to veto any type of gambling legislation.

In the next six months, Tuckwell would like to call a mini-summit meeting, calling together everyone involved in and affected by the law to propose changes.

"There's always room for changes," she said.

Now, there's a $15,000 cap on how much a single charity can receive. If Gaming Commission receipts keep rising as expected, that cap might be too low, she said.

The future of tip jar gambling is uncertain. The law expires in 1999. By then, the state government may see how lucrative tip jars are and may want to get in on the action.

The Washington County Club Association, the Washington County Volunteer Fire and Rescue Association and the Washington County Restaurant and Beverage Association all have a stake in the law.

None of the organizations have major complaints.

"We're very grateful for what we've got and in a lot of cases it's helped people get through some difficult times," said Jay Grimes, president of the fire and rescue association.

"If this is what we have to do, we'll do it," said Club Association Treasurer John Doarnberger.

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