GULFSIDE'S PROPOSED CASINO

Developments in the multi-faceted effort to open a casino in Pope County under a 2018 constitutional amendment that expanded casino gambling in Arkansas. It’s complicated, but the matter is back in the lap of the state Racing Commission.

Late Tuesday, Circuit Judge Tim Fox give a mixed ruling on the lawsuit by Gulfside Casino Partnership of Mississippi, which said it had a valid application for a permit based on approval of their proposal by local elected officials in 2018, though they left office at the end of the year.

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The state Racing Commission, which regulates casino gambling, rejected five applications in 2019 because all didn’t include endorsements from any local officials. Since then, the Pope Quorum Court has endorsed the application of the Cherokee Nation, which has promised to pour almost $40 million into local governments and nonprofits.

Gulfside said both a state Racing Commission rule and a state law requiring that a casino application be accompanied by the approval of current elected officials was unconstitutional. Judge Fox agreed the state law that added this provision was an unconstitutional additional burden to the amendment. Here’s the order.

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In a second order, Judge Fox ruled that the Racing Commission rule requiring approval by current officeholders also was unconstitutional.

But finally, the judge ruled against Gulfside’s argument that since it was the only applicant to submit a “facially” acceptable application in the initial filing period, the Racing Commission should be ordered to give it the permit. He said the Commission has the discretion to rule on the acceptability of permits and now should do so.

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With the guidance in his order, he remanded the Gulfside application to be considered on its merits.

The Commission could consider the application as filed, with past approval from a local county judge. But into that new situation immediately stepped the Cherokee Nation.

In a letter to the commission. it urged the group to use the power given in another court case. Judge Wendell Griffen said the commission didn’t have the power to declare a new application period, as it had done, but it could reopen the original application period for “good cause.” The Commission had earlier delayed doing this pending a decision by Judge Fox. The Cherokee Nation says its application should be considered before any others because it had complied with the law and rule that once applied.

I’m awaiting a response from Gulfside.

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An appeal of Fox’s ruling could further delay matters, though it seems unlikely. Though whatever the Racing Commission decides likely will wind up back in court. Also pending at last report was an appeal of a court ruling striking down a Pope County ordinance that required a countywide vote before county officials could endorse a casino application. The county voted against the casino amendment and in the recent primary elected tossed out many of members of the Quorum Court who, along with County Judge Ben Cross, endorsed the Cherokee deal,

The legal fees mount.

UPDATE: Gulfside has responded. Reading between the lines I’d say they believe the Racing Commission has no choice but to award the permit to them.

Casey Castleberry, attorney for Gulfside Casino Partnership, released the following statement regarding Judge Tim Fox’s ruling on March 24, 2020:

As Judge Fox’s ruling confirmed, we were the only applicant for Pope County that timely complied with every requirement of Amendment 100. The Arkansas Racing Commission should follow the precedent set with Saracen and grant us the casino license without further delay.

Terry Green, co-owner of Gulfside Casino Partnership, released the following statement regarding Judge Tim Fox’s ruling on March 24, 2020:

For more than three decades, we have been strong community partners to the Gulf region by generously supporting schools, first responders, nonprofits and economic development efforts.

We’re ready to immediately break ground on the $254-million River Valley Casino Resort, which will support 1,500 permanent jobs, $29 million in annual gaming tax revenue—50 percent more than other proposals—and an estimated payroll of more than $60 million.

The claim of higher tax revenue is based on the annual projection made by the Cherokees, about $15 million a year, versus about $20 million a year estimated by Gulfside. The state finance agency projected revenue in line with the Gulfside proposal.

UPDATE II: This additional comment came from Chuck Garrett, CEO of  Cherokee Nation Businesses

We have respected the Arkansas State Racing Commission’s process and guidance throughout this period of continued delays, including its decision to wait for action at the circuit court level before considering our requests for acceptance of our application into the May 2019 period for “good cause shown.” Now that the court has ruled, we have renewed our request that our application be accepted so that we can move forward with the process, preferably before the Racing Commission and Attorney General’s office decide whether to appeal the ruling. CNB has been fully vetted by elected officials in Pope County and subsequently received multiple expressions of support, including: a Resolution of Support from the Pope County Quorum Court (as well as entered into an Economic Development Agreement with a value exceeding $40 million); three Letters of Support from Pope County Judge Ben Cross; a Letter of Support from Dover Mayor Roger Lee; and a Resolution of Welcome from the Russellville City Council. We feel strongly that CNB is the operator of choice for Pope County and have worked diligently for more than a year to collaborate with local officials, business owners and residents of Pope County to develop a project that promotes economic growth in the region and that the community can be proud of. We look forward to bringing Legends Resort & Casino Arkansas to the River Valley.”

UPDATE III: HHere’s current Pope County Judge Ben Cross asking the Racing Commissionto approve the Cherokee application, which he shepherded through a secretive process and undebated approval by the Quorum Court in a quid-pro-quo arrangement. That arrangement, by the way — promised casino payments in return for Quorum Court approval — is likely to be challenged in court as an unconstitutional tax should the Cherokees win permit approval.

There’s a lot of courtroom time yet to come.

UPDATE IV: And here’s Gulfside’s response to Cherokee’s Racing Commission letter.

 

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