Buchenroth said allowing an OTB parlor to open would expand gambling in the region, where people already can play tip jars, bingo, lotteries and slot machines and wager on horse racing.
"I think there is ample opportunity for gambling to take place in Washington County and the Tri-State area, and I don't think we need more opportunity to do that," he said.
Washington County Commissioners President Gregory I. Snook said he opposed the parlor because it could divert gambling dollars away from tip jars, which help fund local charities.
"Basically, I feel it would take money from the nonprofits here in the area," Snook said.
The most compelling argument against the parlor, at least from the Racing Commission's perspective, came from the Maryland Jockey Club, which owns the state's two thoroughbred race tracks.
The Jockey Club had opposed Bally's application for Hagerstown, as well as another application Bally's had filed to simulcast out-of-state thoroughbred races at its Ocean Downs harness track near Ocean City, Md.
The thoroughbred officials contended that their organization should control out-of-state simulcasting of thoroughbred races.
At Wednesday's meeting, the commission decided that the competition encouraged by permitting Bally's to simulcast out-of-state thoroughbred races would not be in the best interest of the state's racing industry.
That decision led to the rejection of the Hagerstown application, in part because the center could show only harness races, said commission Director Kenneth A. Schertle.
"A customer going there would not be well served," Schertle said.
Dowd said the parlor, proposed for the North Village Shopping Center on U.S. 11, would have been a "first-class, quality" facility. It would have been able to accommodate 800 people and would have employed 45 full-time workers.
"I think it's a natural," Dowd said.
In a related matter, the owners of the shopping center filed a suit against Bally's Wednesday in Washington County Circuit Court. The suit, which asks for $69,000 in damages and attorneys fees, alleges that Bally's failed to "diligently pursue the procurement of building permit" for the facility while it awaited the commission's decision.
Dowd said he did not know of the lawsuit and had no comment.
He said Bally's could appeal the decision in court or seek legislative relief, but he expressed little optimism over the success of such moves.
"For now, it's dead," Dowd said.