County Liquor Monopoly Will End In 2014 If House Follow Senate’s Lead On Bill

BERLIN — Compromise legislation that would allow the Casino at Ocean Downs to serve alcohol later than 2 a.m. while moving up the sunset provision for the Department of Liquor Control (DLC) wholesale operation breezed through the Senate by a 47-0 vote last week and now appears headed toward passage in the House.

In March, feathers were ruffled when it was learned an amendment could be attached to a bill in the General Assembly addressing other issues related to Worcester County’s liquor laws that would have allowed the Casino at Ocean Downs to serve alcohol 24 hours a day. Four of the five approved casinos in Maryland have the authority to serve alcohol during all of their hours of operation including, for example, the Maryland Live Casino in Anne Arundel County, which is open 24 hours a day.

A proposed amendment to an already filed bill related to Worcester County liquor laws would have extended the same authority to the Casino at Ocean Downs, but the proposed change rankled the liquor license holders in Worcester, most of which are concentrated in and around Ocean City, because of the perception it would create an uneven playing field for the bars and restaurants that would still be held to the firm 2 a.m. closing time while the casino just a few miles away could continue to serve all night if desired.

As a result, the license holders pushed for a concession on their behalf in the form of an earlier disconnect date from the county’s DLC wholesale operation. As part of the legislation that dissolved the old Liquor Control Board (LCB) and created the county-run DLC, the licensees were required to continue to purchase wholesale liquor from the county until July 1, 2016, at which point they would be able to opt out and purchase spirits on the open market if they so desired.

The proposed changes led to considerable backlash from nearly all parties involved during the back-and-forth discussions about the amendment before cooler heads prevailed and comprises were reached and concessions were made. When the dust settled, the amendment was changed to allow the Casino at Ocean Downs to continue to serve alcohol until 4 a.m., not 24 hours as initially desired, and the sunset date for the license holders to opt out of the DLC and test the wholesale open market was moved from July 1, 2016 to July 1, 2014.

For its part, Worcester’s advantage in the tit-for-tat process would be a relaxing of the rules governing from whom and from where the county could purchase wholesale liquor for redistribution. Last year, the DLC purchased a shipment of liquor at a deep discount from Alabama but had to send the booze back when it was determined the purchase was illegal, but the county’s concession in the amendment would relax those rules.

After considerable teeth gnashing and saber rattling, a compromise was reached that appears to be amenable to everyone involved. Under the proposed legislation, which passed the Senate last week unanimously, the casino would be allowed to sell alcohol until 4 a.m., the licensees would see their sunset date for the DLC moved up to July 2014 and the county would get the rules relaxed on its wholesale liquor purchases.

County Commission President Bud Church said this week the compromise included something for everyone.

“When we started this process in speaking with Ocean Downs, our legislators and the licensees, I knew it was a three-legged stool and if there wasn’t something in it for everybody, it wasn’t going to work,” he said. “Sometimes during the process, one leg or the other got removed and put back, but in the end, I think everybody got something out of this. Not everybody got everything they wanted, but everybody got something.”

Church said while Worcester was amenable to the DLC sunset change, the county was hoping for a less drastic opt-out date for the licensees.

“The county really wanted July of 2015 for the opt-out date, but we can live with it,” he said. “[Ocean Downs owner] Mr. Rickman played a major role in getting the compromise worked out and everybody got something.”

Meanwhile, the Worcester County Licensed Beverage Association (WCLBA) appears to gain the most with the compromise legislation and the quicker opt-out date. If the bill passes as expected, the licensees will be able to shop on the open market two years earlier and while some will continue to purchase from the county, some of the larger operations will certainly take advantage of the option.

“We really appreciate the consensus reached on this and we realize how hard our Senator [Jim Mathias] and Delegate [Mike McDermott] worked to get this done,” said WCLBA President Doug Buxbaum. “While we understand this will move up the date for our members to go to the open market if they choose, many of the licensees will continue to maintain their relationship with the DLC, which has gone above and beyond in their efforts to improve liquor distribution in the county.”

While some of the larger operations will achieve significant savings from the private sector wholesalers, most will likely operate in a sort of hybrid system, making large purchases from wholesalers and supplementing their stock with purchases from the DLC. In either case, the WCLBA is pleased to have the option.

“We realize there would likely be some concessions made for the casino whether the opt-out date was moved up or not,” said Buxbaum. “We’re anxious to see how this all plays out, but we’re happy we’re getting the option to buy on the open market in the near future.”

Church expects the county to take a small financial hit when the licensees are allowed to opt out of the DLC, but he said the vastly improved county-run system will remain attractive for most of the bars and restaurants.

“The county is able to buy such large volumes and lock in a low price that we pass along to the licensees,” he said. “On top of that, there is the service side. We’re able to meet their needs without them having to pay for and take delivery of large volumes of product. For those reasons, we really think we’ll be in the driver’s seat for about 75 percent of the licensees.”