Cherokee Nation Businesses casino license dispute likely headed back to Arkansas Supreme Court

An artist’s rendering of the Legends Resort & Casino that Cherokee Nation Businesses hopes to build in Pope County, Arkansas. 

LITTLE ROCK, Ark. – Issuing a ruling on May 21, a Pulaski County judge again deemed unconstitutional an Arkansas Racing Commission rule and a recently passed law requiring casino license endorsement letters be signed by officials in office at the time the application is made.

The ruling by Pulaski County Circuit Judge Tim Fox buoys the ARC’s decision a year ago to grant the remaining casino license for Pope County to Gulfside Casino Partnership of Mississippi.

Simultaneously, Fox refused Gulfside’s request that the issue be turned over to the ARC with orders to award the license to Gulfside, which could have undermined any attempt to appeal by Cherokee Nation Businesses.

Fox wrote in his decision that the ARC rule and the annotated code approved by the Arkansas Legislature, requiring license endorsements from local officials in office when the applications are submitted, are an unconstitutional addition not demanded by Amendment 100.

“With today’s ruling once again confirming the constitutionality of our letter of support, we are moving forward with our license to build an entertainment destination and economic engine in Pope County,” said Gulfside attorney Lucas Rowan, in a statement sent to media.

Amendment 100 allowed the establishment of new casinos in Pope and Jefferson counties, and expansion of the horse track facilities at Hot Springs and West Memphis to include casino gaming.

CNB and Gulfside were among five applicants rejected during the initial application window because none were endorsed by local officials still in office, per the rule adopted by the ARC and the law passed by the Arkansas Legislature.

CNB has repeatedly argued that Gulfside’s application could not receive approval due to invalid endorsements. Gulfside’s application was endorsed by officials who had since left office: Jim Ed Gibson, while Pope County judge, and Randall Horton while mayor of Russellville.

There was some ambiguity in Amendment 100 about when endorsements were to be submitted, which the ARC and Legislature attempted to clarify. The ARC passed Rule 2.13.4(b) requiring endorsements only from local officials in office when the application is submitted. Arkansas lawmakers passed Act 371 also requiring endorsements from those in office.

Gulfside appealed the rejection of its application, and after being denied, sued the ARC and Arkansas Department of Finance and Administration, claiming their requirements ran counter to Amendment 100.

In a statement given after the May 21 decision, CNB attorney Dustin McDaniel said it was “expected Judge Fox would enter an order consistent with his ruling last year…. We will file a Notice of Appeal next week and proceed to the Supreme Court, where we are confident the state statute and Racing Commission rule will be upheld.”

The May 21 decision is fully consistent with Fox’s early 2020 ruling about the ARC rule and state law.

Fox also ruled in July 2020 that CNB could not intervene in the Gulfside suit, because CNB had created a new venture, Legends Resort and Casino LLC, that had no experience with casino gaming and such a deficit was not allowable under Amendment 100. CNB operates 10 casinos, three hotels and Will Rogers Downs in Oklahoma, and CNB argued in its June 8, 2020, filing that the Quapaw Tribe received its permit to build a casino in Jefferson County after establishing a new LLC.

In a ruling issued Feb. 4, the Arkansas Supreme Court said CNB could intervene in the lawsuit, vacating Fox’s ruling and returning it to his court, where it was heard in early May with CNBs’ participation.

Fox’s decision included expansive footnotes accounting for most of its four pages, including reference to the “five separate legal actions pending related to the issuance of the Pope County gaming license.”

The ARC elected not to appeal his previous ruling that the commission rule was unconstitutional and instead the panel proceeded with the merit-based hearings to award the gambling license, Fox said.

“As both applicants have now had the opportunity to have their applications fully heard by the appellee Racing Commission and the losing applicant, intervenor CNB, has appealed such decision to the high court, it seems this procedural issue matter should yield to that appeal,” Fox suggested in a footnote. “The current pendency of both pieces of litigation places the Racing Commission in a legally contradictory position.”

The May 21 ruling can be read at: