Editor’s Note: A correction has been made to this article. See the end of the article for details.
The Arkansas Supreme Court threw plans for a Cherokee casino in Russellville into disarray on Thursday, upholding a ruling that voided the casino company’s license.
In a 5-2 ruling written by Associate Justice Cody Hiland, the court ruled against the Arkansas Racing Commission, which granted the license, and Cherokee Nation Businesses LLC, which has bought $35 million worth of land for a $225 million Legends Resort and Casino.
The court found that the Racing Commission acted beyond its legal authority under Amendment 100 of the Arkansas Constitution, which legalized casino gambling in Hot Springs, West Memphis, Pine Bluff and Pope County. The license was issued to two entities, the court found: both Legends Resort and Casino LLC and Cherokee Nation Businesses LLC.
After four years, Pope County still has no casino, and now the licensing process for Pope County will start anew.
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. Casinos have operated for the past several years at Oaklawn in Hot Springs, Southland in West Memphis, and in Pine Bluff, where the Quapaw Nation of Oklahoma built Saracen Casino Resort.
Hiland, joined by four justices, upheld a January ruling by Pulaski County Circuit Judge Tim Fox that nullified the gaming license the racing commission had granted to Cherokee Nation Businesses of Catoosa, Oklahoma. Justices Karen R. Baker and Shawn Womack dissented.
The ruling favored 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 had ruled that Legends Resort and Casino LLC, the Cherokee Nation entity listed on the license, was not a qualified applicant under the language of Amendment 100.
Gulfside Casino Partnership argued that the racing commission’s decision to grant the license to Legends Resort and Casino was “ultra vires” because “it was issued in violation of Amendment 100 and therefore unconstitutional,” Hiland wrote in the ruling. “The circuit court agreed and held that the license so issued was a ‘legal nullity, void and of no effect.’ For the reasons below, we affirm.”
Casey Castleberry, attorney for Gulfside Casino Partnership, said in a statement to Arkansas Business that he and his clients were “ecstatic about the Supreme Court’s affirmation of Judge Fox’s ruling that Legends was not a qualified applicant for the Pope County” license.
“Just as the Racing Commission selected our superior application in 2020 in a head-to-head with Legends, we look forward to demonstrating again to county leaders and residents how our proposed world-class resort will benefit them and the entire state.”
Chuck Garrett, the CEO Cherokee Nation Businesses, said in a statement to Arkansas Business that the company is “disappointed” by the decision.
“Having the express support of the incumbent county judge, many other local officials and the community, we remain committed to earning the privilege of being the operator of choice for a casino in Pope County,” he said. “We’ll be ready to demonstrate our 30-plus years of experience in gaming and hospitality once the Arkansas Racing Commission and the Arkansas Attorney General’s office determines the next step in fulfilling Amendment 100.
“We have already purchased more than 325 acres in Russellville, and our building and design teams have done as much work as possible to ensure construction can commence quickly. We are fully committed to moving forward and working with local and state officials as we have been for the past five years to build Legends Resort & Casino and bring the much needed economic growth the community and state deserves.”
Fox’s order, dated Jan. 12, said Legends lacked Amendment 100’s required experience in operating casinos, even though Cherokee Nation entities have operated tribal casinos in Oklahoma for three decades. Fox declared that the racing commission improperly issued the license to both Legends Resort and Casino LLC and to Cherokee Nation Businesses LLC.
Hiland’s ruling said the language of the amendment was unambiguous. “It provides for one license to be awarded to one entity for one casino. ‘Casino applicant’ is singular — not plural,” he wrote. “Nowhere in the text does it allow for joint or dual licensing to more than one applicant.”
The racing commission, Judge Fox ruled, “abused its regulatory agency discretion” by allowing the Legends application “to be tendered over seven months after” an application period ended in May 2019. “Legends did not even exist at the time of the May 2019 application period,” he wrote. “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.”
Correction: A previous version of this story had an incorrect vote count for the ruling. We have corrected the error.
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