Even as the Maryland General Assembly convenes, momentum is building among legislative leaders to regulate widespread club gambling, which has prompted slot machine raids on the Eastern Shore, criminal trials in Montgomery County and controversy elsewhere in the state.
House Speaker Benjamin L. Cardin and Senate President Melvin A. Steinberg said in separate interviews that recently publicized abuses by veterans posts and fraternal lodges have convinced them that the current law should be changed by the General Assembly, which begins its 90-day session today.
They have been joined by Del. Joseph E. Owens (D-Montgomery), the powerful and widely respected chairman of the House Judiciary Committee, who said he favors an overhaul of the current law. In recent years, his panel has been a graveyard for bills pushed through the Senate by gambling supporters and opponents.
"It'll be an emotional issue to some of the clubs if we really put a damper on" gambling, Owens said in an interview, adding that he expects organized opposition to any such change. "But we're willing to bite the bullet."
Although Maryland sanctions a state lottery and horse-track betting, other gambling is prohibited. But over the years, laws have been enacted in a piecemeal fashion to allow gambling sponsored by bona fide fraternal, civic, veterans, religious or charitable organizations or volunteer fire companies. Now, 16 of the state's 22 counties are in some way exempted from the gambling prohibitions.
"We've had an evolution," said Steinberg, "first with legalized slots in four Southern Maryland counties, from 1949 to 1968 , then a complete prohibition, then we started to dilute the prohibitions. The problem is the circumvention by some entities not really charitable but social."
Owens said he wants to limit club gambling, which now goes on almost daily in many of the 16 counties, to 12 days a year, and to require public accounting of all revenue received and disclosure of how it is spent.
"I'm trying to put it all out on the table," Owens said. "I think it's really big money, but I don't think most people realize it." Owens estimated that club gambling in Maryland generates revenues as high as $500 million a year, but nobody knows the precise amount or how it is spent.
Owens said he also wants to "keep professional operators" out of charity bingo, an issue that surfaced recently in Prince George's County when a corporation tried to open a 1,500-seat parlor to sublease to charity groups.
Profits from the operation were to have been divided between the charities and the corporation.
Officials turned down the request for the bingo licenses, saying county law does not permit any portion of the bingo proceeds to go to a private enterprise.
All three legislators said they are most angered by revelations that some groups, exempted from state gambling laws because they say they give to charity, have actually donated little of their gambling proceeds to those causes.
On the Eastern Shore, for instance, 160 slot machines were seized from 24 clubs in a state police raid in September.
Although the clubs said they gave heavily to nonprofit groups, the state special prosecutor said that records taken with the slot machines showed "very little evidence that any of the proceeds were donated to charity."
Then, testimony and records subpoenaed in a recent Washington County court case showed that seven clubs operating legal gambling games brought in several million dollars in gross proceeds. The clubs have asserted that the games allowed them to raise funds for local charities, but the information released in court showed they had donated an average of 5 percent.
In another case in Montgomery County, the exclusive Progress Club, composed of prominent businessmen who regularly played poker, was raided by Rockville police in June. Club members said the club was a nonprofit organization that made major donations to charity. Prosecutors said, however, that less than 10 percent of net proceeds went to charity. A mistrial was declared last month after a jury failed to reach a verdict.
Cardin said he thinks the clubs should be required to donate a specified percentage -- "more than 5 percent" -- to charity. Owens said he opposes such a requirement on the grounds that it might be unconstitutional.
Steinberg said he believes the proceeds of club gambling should be taxed to generate additional revenue for the state, but Cardin and Owens said they would oppose such an approach. Owens said it would encourage localities to promote gambling, not control it.
Steinberg said club gambling should be "tightened, regulated, controlled" and taxed. "Having all this money go to the underground economy does harm to the legal economy," he said.
Nowhere is this more evident, by all accounts, than in Washington County, where tavern owners complain they can't compete with the low prices offered by clubs that use gambling proceeds to subsidize the sale of food and beverages.
The charitable purposes cited by such clubs to justify gambling are "a smokescreen," according to Del. Casper Taylor (D-Allegany), a Cumberland restaurant and tavern owner. His restaurant's "Cumberland Hall of Fame Club," which he said donates to charity, sells 50-cent packets of numbers that are pulled from glass containers known as "tip jars," common in Western Maryland.
Last year, Taylor proposed as the "only sensible solution" legislation to legalize tavern gambling and give counties revenue from license fees and from the sale of games. His solution was endorsed by the Washington-Allegany county delegations but won little other legislative support.
"Playing these games for charity is a phony issue," Taylor said. "No one in captivity is going to play these games at the bar because they know the money is going to charity. Communities up here have been playing these games for decades. People up here wonder what all the turmoil is about."