"We want to allay any fears that there are going to be slot machines. It's not being built for slot machines," said McCoy.
The North Village Shopping Center space where Bally's has said it wants to open an OTB facility is not big enough for slot machines, McCoy said.
The space Bally's plans to lease in Hagerstown is about 18,500 square feet.
He wouldn't rule out Bally's being interested in a Western Maryland site should slots be legalized in Maryland.
The racing commission, which will decide whether the approve the off-track betting application, has tentatively scheduled a public hearing on the matter for Aug. 13 at 11 a.m., but Executive Director Kenneth Schertle said a place for the hearing has yet to be arranged.
Roger Gros, senior editor of Casino Journal, an industry magazine in Atlantic City, N.J., said he believed the decision to apply for an OTB operation here was part of an effort to justify Bally's investment in racing in Maryland.
"They wanted to open up slots at Ocean Downs and Rosecroft. They threw in with the tracks to get it done," said Gros.
About 2 1/2 years ago, Bally Management Corp. invested $10.2 million in Cloverleaf Enterprises Inc., the organization representing harness breeders in Maryland. With the money, Cloverleaf purchased Rosecroft in Fort Washington and Ocean Downs near Ocean City, and Bally's manages the tracks.
Bally Management Corp. is a subsidiary of Bally Entertainment, which runs the casino businesses for the parent Hilton Hotel Corp. The hotel giant bought Bally more than a year ago for more than $1 billion, Gros said.
McCoy said the Ocean Downs track "just can't sit there and support itself with 40 days of racing."
That was why Bally's started thinking it needed to develop the off-track betting component, he said.
Marvin Roffman, president of Roffman Miller Associates in Philadelphia, said tracks in Delaware have slot machines and are doing substantial business.
"Bally feels that ultimately the parimutuel business, which has been in serious decline, will be rejuvenated" by slot machines, which would turn tracks into mini-casinos, he said.
Slot machine gambling by fraternal organizations is permitted on Maryland's Eastern Shore.
"The relationship didn't work out very well" between Bally Management and Cloverleaf, McCoy said. About nine months ago, the parties began negotiations to transfer ownership of Ocean Downs to the newly created Bally's Maryland, a sister corporation of Bally Entertainment. At the same time, the management deal at Rosecroft was terminated and an additional cash infusion was made by Bally's at that track. Bally's Maryland took over Ocean Downs in May.
Gros said Bally's owns a minority interest in Rosecroft, but that would increase to more than 50 percent if Maryland passed a law allowing slot machines at tracks. He said this was Bally's first foray into the race track and off-track betting businesses.
The application for the $1.5 million OTB parlor and restaurant at Hagerstown's North Village Shopping Center was discussed briefly by the Maryland Racing Commission at its July 9 meeting. McCoy said he had been scheduled to meet with the Hagerstown-Washington County Chamber of Commerce on Monday, but that meeting was postponed until later this month.
Bally's Maryland President Dennis Dowd said last week this area "has a population that can support this type of facility. You have the interstates that are very close to the site, which makes it accessible."
The application predicted a net return of $1.3 million from the business.