Court solidifies ruling in casino license case

LITTLE ROCK — The Arkansas Supreme Court issued a mandate on Tuesday formalizing its Oct. 21 opinion that essentially knocked Gulfside Casino Partnership of Mississippi out of the running for Pope County’s sole casino license.

The opinion and mandate in CV-21-289 appear to pave the way for the only remaining applicant, Cherokee Nation Businesses of Oklahoma, to receive a license to proceed with its Pope County casino plan.

Cherokee Nation Businesses plans to build the casino through a company it incorporated in Arkansas in 2019 — Legends Resort & Casino LLC.

The Arkansas Racing Commission, which oversees the casino application and licensing process, has scheduled a meeting for 1:30 p.m. Friday to discuss the license and Supreme Court decision.

The commission previously awarded the license to Gulfside, but casino construction never began as legal wrangling played out.

Dustin McDaniel, legal counsel for Cherokee Nation Businesses, has threatened to file a lawsuit if the commission doesn’t hand over the license forthwith.

On Thursday, McDaniel emailed Mark Lamberth of Batesville, acting chairman of the Arkansas Racing Commission, saying he hoped an award letter and license would be issued to Legends on the day the Supreme Court issues its mandate in the case.

In a follow-up email on Monday, McDaniel wrote, “Legends is prepared to file a Petition for Mandamus with the Pulaski County Circuit Court immediately upon the issuance of the Arkansas Supreme Court mandate if this Commission refuses to issue it the license to which it is legally entitled.”

McDaniel said he went to the Arkansas Racing Commission on Tuesday with a representative from Cherokee Nation Businesses.

But John C. “Smokey” Campbell, executive director of the commission, told McDaniel he wasn’t authorized to present the license.

“We are in discussions with the Arkansas [Attorney General’s] office to ensure Friday’s meeting of the Commission is purely informational and that the Commission clears the way for staff to perform its administrative duties,” McDaniel said Tuesday in a prepared statement. “At the request of the AG’s office, we have agreed to wait until tomorrow to file so that the AG can clearly explain to the Acting Chairman and the Director the effect of the Supreme Court order and the law governing the issuance of the license. It is our sincere hope to receive real assurances by the morning so that we do not have to file suit.”

On Tuesday, Lamberth responded to McDaniel’s email from Thursday, saying the commission will meet before a license is issued.

“If you or your client do not share in the position that transparency in the matter is vitally important, please proceed with any legal action you deem necessary,” wrote Lamberth.

Meanwhile, attorneys for Gulfside filed a motion for summary judgement on Tuesday in a separate Pulaski County Circuit Court case (60CV-21-1653) saying Legends Resort & Casino should be disqualified because it doesn’t have casino gaming experience as required under Arkansas Amendment 100, which voters approved in 2018, allowing casinos in Pope and Jefferson counties.

Cherokee Nation Entertainment LLC operates 10 casinos in Oklahoma, but it’s connection to Legends Resort & Casino is that they “have the same sole member, Cherokee Nation Businesses,” according to a brief in support of the motion.

“The Racing Commission erred in finding that the casino gaming experience of another limited liability company, which has the same sole member as Legends, could satisfy this requirement,” according to the brief filed by Lucas Z. Rowan and Kenneth P. “Casey” Castleberry, attorneys for Gulfside.

The Oct. 21 Supreme Court opinion and Tuesday’s mandate reversed and dismissed a Pulaski County Circuit Court decision that declared unconstitutional a Racing Commission rule and state law that required that letters of endorsements for casino licenses come from local officials in office at the time the license application is submitted.

In other words, “the county judge” means the county judge at the time a casino application is submitted, the Supreme Court ruled.

The initial case was brought by Gulfside in 2019 after its license application was denied by the Racing Commission because its letter of support was signed by former Pope County Judge Jim Ed Gibson just days before his term expired on Dec. 31, 2018.

The Racing Commission didn’t open the first application period until May 2019.

Amendment 100 required a letter of support from the county judge or a resolution from the quorum court. If the casino is located in a city, a letter of support from the mayor would also be required. The amendment is codified as Arkansas Code Annotated § 23-117-101 and Casino Gaming Rule 2.13.5(b).

Cherokee Nation Businesses later submitted an application to the Racing Commission after gaining support from Ben Cross, the current Pope County county judge, as well as from the Pope County Quorum Court.

Cross wrote a letter of support for Cherokee Nation Businesses after he negotiated a $38.8 million economic development agreement with the business.

The Pope County Quorum Court subsequently experienced turnover among its members in the last election, and the current body immediately issued a resolution in opposition to any casino coming to Pope County.

Gulfside and Cherokee Nation Businesses were two of five applicants for the license.

Gulfside’s letters of support were submitted to the commission by Dec. 31, 2018.

On Jan. 3, 2019, the Racing Commission changed the proposed rules to say the letters of support must be dated and signed by the government officials in office “at the time of the submission of an application for a casino gaming license.”

On March 5, 2019, the General Assembly passed Act 371 of 2019, which echoed the Racing Commission’s new rule.

The Supreme Court ruled that the changes were consistent with Amendment 100 and didn’t “impose an additional requirement.”

The Arkansas Racing Commission, which oversees the casino application and licensing process, has scheduled a meeting for 1:30 p.m. Friday to discuss the license and Supreme Court decision.