Clubs mount new effort to kill tip jar law

January 13, 1998

Clubs mount new effort to kill tip jar law


Staff Writer

Private clubs and veterans groups are mounting a new effort to kill Washington County's tip jar gambling law.

"We've just drawn a line and said, 'No,'" said Washington County Club Association President Frank Foight III.

But members of the local delegation to the Maryland General Assembly say their support of the law will not be swayed.

"As a practical matter, I think the law is here to stay," said Sen. Donald F. Munson, R-Washington.

Although the club association has opposed tip jar regulation from its inception, it is now lobbying to end the law that has distributed $2.3 million to charity since July 1995.


Members are beginning to see how much the law has hurt them financially, Foight said.

The Joint Veterans Council of Washington County is backing the association, said President Ray S. Linebaugh.

The law requires private clubs, including veterans' organizations, to give 15 percent of gambling profits to charity. The threshold will rise to 20 percent in July.

Half goes to the Washington County Gaming Commission and the other half can be recorded as in-kind donations to nonprofit groups.

The in-kind rule does not apply to bars, which are required to give half of their profits to the Gaming Commission.

The law is set to expire, or "sunset," June 30, 1999.

But members of the delegation said they plan to introduce a tip jar gambling bill this year to prevent that from happening.

The law has strong support from nonprofits that receive money through the Gaming Commission.

The Gaming Commission has recommended the delegation remove the in-kind requirement for the clubs and set a flat 15 percent contribution to the gaming fund.

The details will be hammered out at delegation meetings this month, said Del. John P. Donoghue, D-Washington.

Munson said he continues to support removal of the sunset, but in its absence he would like to look into adding to the law some unspecified "safeguards" to ensure accountability.

While the clubs have raised concerns about losing money because of the tip jar law, the regulations also have worked to stave off any possible attempt by the state government to regulate, and tax, county gaming, Munson argued.

"In that respect, it has probably helped the clubs," he said.

Foight disagrees. At least three veterans clubs, which he declined to name, have experienced financial trouble since the law went into effect, he said.

The tip jar tax puts them at a disadvantage to clubs in other counties, he said.

American Legion, Charles Harden Post 74, has closed since the law has been passed, Foight said.

"It has put the financial death knell on a small post. They were viable until the tax came along," he said.

The clubs and veterans groups also feel it is unfair for the Gaming Commission to decide where to spend proceeds from tip jar profits that are raised by group members, Linebaugh said.

Clubs have had to drop pet charities like the Veterans Affairs Medical Center in Martinsburg, W.Va., because they don't meet the qualifications for in-kind contributions, Foight said.

"They're using this to control everything we spend," he said.

The Gaming Commission has given away $2.3 million since the county began regulating tip jars in July 1995. Another $953,240 is to be distributed next week.

The clubs have a representative on the Gaming Commission, Bill Porter, who was appointed by the county delegation.

But Foight said he has never talked to Porter.

"He does not represent us," Foight said.

Porter said he supports the law and changing the contribution to a 15 percent flat rate for clubs.

"People I talked to agree. Maybe (Foight) ought to contact us and tell us about it," Porter said.

Staff Writer Guy Fletcher contributed to this story.

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