Update: Cherokee Nation to Appeal Ruling That Voids Casino License

Update: Cherokee Nation to Appeal Ruling That Voids Casino License

A Pulaski County circuit judge on Thursday voided an Oklahoma tribal gaming company’s license to put the state’s fourth casino in Russellville, stalling a $225 million project and extending Pope County’s four-year wait for a gambling hall.

Pulaski County Circuit Judge Tim Fox ruled against the Arkansas Racing Commission, nullifying the license it had granted to Cherokee Nation Businesses of Catoosa Oklahoma, which bought $35 million worth of land for the casino project.

As expected, Cherokee Nation promised an appeal. “While the circuit court’s ruling is disappointing, in the interest of forward progress, we are pleased to have a decision,” CEO Chuck Garrett said in a statement. “We remain confident in our legal position and will move quickly to have our appeal heard by the Arkansas Supreme Court.”

The judge agreed with pleadings from Gulfside Casino Partnership of Mississippi, which had held the Pope County casino license before the Arkansas Supreme Court ruled against it in previous litigation.

Fox ruled that Legends Resort & Casino LLC, the Cherokee Nation entity listed on the license, was not a qualified applicant under the language of Amendment 100, the 2018 amendment to the Arkansas Constitution that cleared the way for casino gambling at four sites in Arkansas.

More: Read the full decision here.

Fox’s order, dated Jan. 12, said Legends lacked the amendment’s required experience in operating casinos, even though Cherokee Nation entities have operated tribal casinos in Oklahoma for three decades. The order said the Racing Commission acted beyond the scope of its authority by issuing the license to both Legends and CNB because only the Legends entity was on the license application.

“The Arkansas Racing Commission’s decision awarding the Pope County casino license jointly to CNB and to legends is reversed,” Fox’s order said, declaring the license “a nullity,’ void and of no effect.

“Amendment 100 allows only for a single applicant for a casino license, and the Racing Commission acted ultra vires, in violation of Amendment 100, in issuing a casino license jointly to CNB when it had not submitted a casino license application,” the judge wrote.

He added that the amendment requires a letter of support from the Pope County judge or a resolution of support by the Quorum Court as part of the casino application. “Failure to provide such document was the reason the Racing Commission denied all five applications” during an initial casino application period in May 2019. The commission erred when it allowed “an application to be tendered late for the May 2019 period” during a second application period, Fox wrote, saying that was done “for the sole reason that Legends’ late application contained a constitutionally required letter of support.”

The commission, according to Fox’s findings, “abused its regulatory agency discretion” by allowing the Legends application “to be tendered over seven months after the May 2019 application period.” Further, he wrote, “Legends did not even exist at the time of the May 2019 application period. It was a legal impossibility for Legends to have submitted a timely casino license application so there could not legally be 'good cause shown' for its application to be submitted late.”

More: Read about the long-delayed Pope County casino's legal challenges.

Lucas Rowan, an attorney for Gulfside Casino Partnership, offered this statement Friday morning: "Gulfside remains committed to building a first-class entertainment destination in Pope County and bringing good-paying jobs and economic development to Arkansas, and this ruling that Legend was not qualified is a step in that direction."

CNB’s envisioned hotel and casino combination was expected to be in line with the three other casinos that have gone up since Arkansas voters authorized them by approving Amendment 100 in November 2018. Those casinos are at Oaklawn in Hot Springs, Southland in West Memphis and in Pine Bluff, where the Quapaw Nation of Oklahoma has built Saracen Casino Resort.

Earlier this month, Cherokee Nation Businesses CEO Chuck Garrett was hoping for a different ruling, one that would remove the last legal roadblock to the project.

“It’s been unfortunate, I think, for the citizens of Pope County and the citizens of Arkansas that this has taken so long,” Garrett said. “It has deprived local governments and the state of some serious tax revenue. But of course, we had a very competitive process leading up the issuance of a license and that was not the case with Saracen.”

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