The association, made up of bars and liquor stores that run the games, applied last summer to get a wholesalers license, said their lobbyist, Jay Schwartz.
When the Gaming Commission refused to act, the association sued, he said.
Meanwhile, the Washington County Commissioners changed the gaming regulations to prevent organizations from being wholesalers if more than half of its members also run the games.
The delegation voted Wednesday to introduce legislation making the regulations even tighter.
Their bill would ban any organization with a single tip jar operator from becoming a wholesaler.
The 5-2 vote was closer than it appeared because of the rule that local legislation must pass muster within the House delegation as well as in the Senate delegation.
Four of the five delegates were divided on the issue, with Delegation Chairman Christopher B. Shank, R-Washington, breaking the tie.
Del. Richard B. Weldon, R-Frederick/Washington, said he voted against the legislation because its advocates didn't present an urgent need for changing the law.
He said the issue should be battled out in court. Although the lawsuit was dismissed, an administrative law judge has scheduled a Feb. 27 hearing on the issue.
Schwartz said tip jar wholesalers, represented at the meeting by lobbyist Bruce Bereano, are trying to keep out the competition.
Unlike Bereano's clients, his clients are local businesspeople, he said.
Money raised by the association would be used for charitable purposes, association president Lou Thomas said.
Serial numbers on the jars would allow the county Gaming Office to track the accuracy of the reports, he said.
Bereano said without the law his client, the Arbutus, Md.,-based Frank Moran and Sons, would lose business.
He echoed DiVito's comments about accountability.
"It makes absolutely no sense to my client to allow an operator to sell to themselves. There will be no check and balance," he said.
Schwartz said the association will try to kill the bill before it passes the Maryland General Assembly.
Local lawmakers voted Wednesday to make two smaller changes to the county's tip jar law.
One would remove a $250 cap on the amount of profit that bars can make on each tip jar game.
The other would require DiVito to send an annual tip jar report to the Maryland Comptroller's Office.
The Washington County Delegation voted Wednesday to introduce legislation to tighten gaming regulations. Here's how members of the delegation voted:
Del. Robert A. McKee
Del. LeRoy E. Myers Jr.
Del. Christopher B. Shank
Sen. Donald F. Munson
Sen. Alex X. Mooney
Del. John P. Donoghue
Del. Richard Weldon