Casino application review risks violating order, group says

Saturday 11th April 2020

An anti-casino group told the state Racing Commission on Friday that it would be a violation of a court's temporary restraining order if an announced meeting were held to consider a request to accept an application from Cherokee Nation Businesses for a casino license in Pope County.

The admonishment comes on the heels of an announcement Thursday that the commission would meet Wednesday to discuss the Cherokees' request -- despite a March 4 decision that it would not take any action on the Cherokees' application until pending litigation was resolved.

"The Commission runs the risk of violating the [restraining order] with its announced course of action...," said Jerry Malone, attorney for Citizens for a Better Pope County, an anti-casino group. "Additionally, various counts in the Second Amended Complaint raise substantive allegations that it constitutes an illegal exaction for the Commission to expend taxpayer dollars in consideration of Cherokee Nation's Good Cause Shown Application."

Malone said he would have no choice but to alert the circuit judge who issued the restraining order "regarding the immediate and irreparable injury" that will occur should the commission meet.

[RELATED: See complete Democrat-Gazette coverage of casinos in Arkansas at]

"The April 15 meeting remains scheduled," said Scott Hardin, a spokesman for the state Department of Finance and Administration, of which the Racing Commission is a part. "The Commission does not intend to cancel."

Citizens for a Better Pope County sued the Racing Commission on Dec. 27, leading to the temporary restraining order. The group now seeks a permanent injunction to bar the commission from issuing a license based on applications submitted after an initial application period.

The first window for accepting casino license applications was open during May 2019, and closed with five bids -- all rejected because none contained endorsements from local officials in office at the time of the application.

Constitutional Amendment 100 -- passed by state voters in November 2018, allows a new casino each in Pope and Jefferson counties and allowed the expansion of gambling at the racetracks in Hot Springs and West Memphis.

Amendment 100 requires the new casinos to have endorsements from local officials, but the Racing Commission had created Rule 2.13.4(b) -- which requires endorsements only from local officials in office when the application is submitted -- and the Legislature also passed Act 371, which requires the same thing.

The commission opened a second application window in August after the county Quorum Court and Pope County Judge Ben Cross backed the Cherokees for the license.

The Cherokees last year had agreed to fund a $38.8 million "economic development agreement" that benefited the county, some municipalities and nonprofit organizations.

In January, that second window was "abandoned" by the Racing Commission after Pulaski County Circuit Judge Wendell Griffen, in the case filed by Citizens for a Better Pope County, issued and extended a temporary restraining order barring the commission from issuing a license for a casino in Pope County.

Griffen said at the time, however, that the restraining order did not prohibit the commission from accepting applications under its rule that allows acceptance after the close of the application period if the applicant can show "good cause."

Dustin McDaniel, an attorney for the Cherokees, said in a Friday letter to the commission that Griffen made "quite clear" that no part of the restraining order extended to the the "good cause" provision of the gambling rules.

"Judge Griffen articulately made his point, as Judge Griffen often does, so that it would not take an attorney to decipher when he said, 'I double, triple dog dare anyone to point to a single word in my order that applies to the 'good cause' provisions" in the Rules,'" McDaniel said.

He added that Malone's request was "simply without merit."

"Furthermore, his threat that the court shall be 'notified' that the Commission has decided to meet and conduct business is an empty threat at best," McDaniel said in the letter. "It is empty because not only has he no legal grounds with which to back it up, but also because it is a shot he has already taken once and missed."

Malone countered in his letter that the Cherokees' "Good Cause Shown" application is "merely the same application submitted during the illegal Second Application Period."

The consideration of the Cherokee application comes after Pulaski County Circuit Judge Tim Fox on March 25 sent the original application of Gulfside Casino Partnership back to the Racing Commission to "consider on its merits."

Gulfside's was the only one of the five original applicants for the Pope County license that contained endorsements, but it was rejected because some were from local officials who left office in December 2018.

Fox ruled that both the commission rule and new law were unconstitutional because they impose "an additional qualification, sometimes referred to as a 'negative' qualification, beyond the plain and unambiguous language of Amendment 100."

Hardin said a decision on whether to appeal Fox's ruling to the state Supreme Court has not yet been made. The decision must be made within 30 days of the March 25 ruling.

Metro on 04/11/2020

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