If there is anything that will keep U.S. Rep. Marjorie S. Holt from retiring when her seventh term expires next year, it is the basketball that sits atop the television set in her Capitol Hill office.

"Merry Christmas from my court to yours," reads the inscription on the basketball, a gift from Washington Bullets forward Tom McMillen.

The chance to play Democrat McMillen on the political court that includes all of Anne Arundel County, and part of Prince George's and Howard, combined with pressure from the White House and the national Republican Party, may persuade Holt to ignore her inclination to retire.

Holt, who says she considers retirement every two years, is again examining the prospect, and expects to make a decision before her annual bull roast and fund-raiser set for Sept. 29.

"I'm on top of the heap; no one can beat me," she said this week. "This may be the time to look at it."

If this is the year, and some Republican Party sources suspect it is, then 4th District voters may be facing one of the better political contests in 1986, a year that promises a bushel of them.

McMillen, who openly flirted with the idea of running in 1984, but backed off in the face of a strong Republican year, is expected to end his basketball career and run for Congress regardless of whether Holt retires.

The 6-foot-11 former Rhodes scholar will be a formidable candidate, and will attract plenty of national money and glitter.

He has already scheduled a small fund-raiser stocked with luminaries to be hosted by former U.S. senator Joseph Tydings.

But McMillen, a Crofton resident, will not have the home court advantage.

That goes to a pint-sized legislator from Davidsonville named Robert R. Neall, the minority leader of the House of Delegates, who will be the likely Republican heir apparent to Holt if she retires.

Neall, a lifelong Anne Arundel County resident whose family runs a general store in Davidsonville, is waiting only for the word from Holt to begin his campaign.

At 5-foot-7, Neall cannot match McMillen's stature, but his deep county roots, his fiscal conservatism and his energetic, combative manner promise a spirited campaign against his wealthier, nationally known opponent.

Neall likes to say he and McMillen "don't see eye to eye," and the remark has more to do with philosophy than comparative height.

In a district that has overwhelmingly supported the conservative Holt for 14 years, Neall's politics would seem to be more in tune than those of McMillen, who will have to fight the image of carpetbagger and limousine liberal.

Though he knows he can't match McMillen dollar for dollar, Neall believes that the nature of the congressional seat just a few miles from the nation's capital may give him an advantage.

"Even though this is a House seat," he said, "you essentially act as a local official. You function pretty much the way a county councilman or member of the legislature functions. To that extent, I have a leg up on him."

The only thing Neall has asked of Holt is that she give him enough time to mount a credible shoe leather campaign if she does retire.

Which is one reason Holt will be deciding soon. If she does retire, she wants to do it in a way that will keep the seat in the family.

But even though she is 64, Holt's competitive fires need little stoking.

"I'd really like to beat Tom McMillen," said Holt with genuine relish.

Adding to that urge is pressure from President Reagan and national party figures to guarantee the seat remains Republican.

But even with all that, the smart money is on Holt relinquishing the seat.

If that happens, voters in the 4th District, who have grown accustomed to Holt rolling over her opponents with little effort, are in for a competitive race with two very different candidates to choose between.