The City Council on Thursday rejected an ordinance that would have immediately allowed BYOB, or bring your own beer, in restaurants except those on the boardwalk.
Because proponents of the BYOB effort have gathered enough signatures to force a referendum on the matter, though, it will go on the May 8 ballot. The only way that would change is if the backers of BYOB withdraw the measure, which is considered extremely unlikely.
"This is a decision that cannot be made by us," Councilman Scott Ping said. "It must be made by all the people."
Ocean City was founded as a Methodist retreat in the 1800s, and for decades it has banned the sale of alcohol.
Backers say BYOB is needed to attract more business to eateries, while opponents fear the family friendly atmosphere would disappear.
Proponents of the BYOB effort tried unsuccessfully to get the matter put on the ballot last year. One problem was limits last year's measure would have placed on the amount of alcohol patrons would be allowed to take into eateries. Officials decided such a restriction would run afoul of state liquor control laws, which would supersede the local law.
Residents spoke in favor of preserving Ocean City's family friendly atmosphere during Thursday's council meeting. But a few said businesses should be given the tools they need to succeed in an uncertain economy, adding that letting patrons bring something to drink with dinner would increase business at struggling restaurants, particularly in the offseason.