Decision requested in casino suit filing
Wednesday 5th February 2020
A Mississippi casino operator asked a Pulaski County circuit judge on Tuesday to issue a final ruling in a civil case that was filed last year after the state Racing Commission rejected all five applicants for a Pope County casino license.
Gulfside Casino Partnership, which sued the commission in August, asked for a summary judgment, requesting that Circuit Judge Tim Fox make a decision without holding a trial.
The nearly 60 pages of documents filed in the case Tuesday included an email from Racing Commission attorney Byron Freeland saying a last-minute change to a proposed casino-related rule -- which basically invalidated Gulfside Casino Partnership's application -- was done after consulting with Gov. Asa Hutchinson's office and other state officials.
"Gulfside's position is well supported by law," said Lucas Rowan, attorney for Gulfside. "We look forward to presenting our case."
When contacted, Hutchinson spokeswoman Katie Beck said in an email that since 2015, "all state offices, departments, and agencies have submitted proposed rules and regulations and amendments to the Governor's office for review and approval, prior to submission to a legislative committee of the General Assembly."
"The Governor's office has confidence in the Attorney General's office to respond in detail to the pending motion," Beck said.
Gulfside's suit said its application was the only one that met constitutional requirements because it included letters of endorsement from local officials, even though they issued their support right before leaving office in 2018.
Scott Hardin, a spokesman for the state Department of Finance and Administration, said the Racing Commission's counsel will review Gulfside's latest filing, but could not immediately answer questions posed by the Arkansas Democrat-Gazette.
"The Commission is not currently scheduled to consider the Pope County license at an upcoming meeting," Hardin said. "Commissioners were holding this discussion in anticipation of the Gulfside [court] hearing scheduled for late March. Whether this filing alters that plan is yet to be determined."
Constitutional Amendment 100, approved by voters in November 2018, allows new casinos in Pope and Jefferson counties and allows the expansion of gambling at the racetracks in Hot Springs and West Memphis.
The new casinos must have endorsements from local officials under Amendment 100, which does not state when the endorsements have to be dated or submitted.
However, the Racing Commission last year added a rule that the endorsements can only be from officials in office at the time the application is submitted. The Legislature also passed Act 371, which became effective in March, that requires the same thing.
In Tuesday's court filing, Gulfside asserts that both the Racing Commission's rule and the state law concerning endorsements are unconstitutional because they add a requirement to a constitutional amendment.
Exhibits included in the filing show that before the Dec. 28, 2018, and Dec. 31, 2018, submission of endorsement letters from Jim Ed Gibson, then county judge of Pope County, and Randall Horton, then mayor of Russellville, in support of Gulfside, the Racing Commission was in agreement that the endorsements were valid as long as they were issued after the effective date of Amendment 100, which was Nov. 14, 2018.
The emails and other documentation were obtained by Gulfside through a Freedom of Information Act request to the Racing Commission.
Five days after the effective date of the amendment, Booker T. Clemons, then county judge of Jefferson County, issued a letter of support in favor of Downstream Development Authority for a casino license there.
On Dec. 19, Carlton Saffa, a senior strategist for Hutchinson's office, emailed Freeland saying that he would be asked if Booker's letter "counts" as satisfying the requirements of Amendment 100.
Freeland responded the next day saying that the "letter is valid if written after the Amendment became effective. If ARC [Arkansas Racing Commission] gets more than one letter of support, the Commission will determine which applicant is the best qualified."
On Dec. 26, 2018, the Racing Commission unanimously voted to adopt the rule for publication with the wording that required only that the endorsements be dated after the effective date of Amendment 100.
Downstream Development Authority of the Quapaw Nation -- which was issued the Jefferson County casino license in June 2019 -- is expected to fully open Saracen Casino Resort in June this year.
Saffa now a project manager for the Pine Bluff casino.
The court exhibits show that it was three days after Gulfside submitted the letter from Horton, then the Russellville mayor, that Freeland, the commission's attorney, in a Jan. 3, 2019, email proposed to change the rule -- now Rule 2.13.4(b) -- to require endorsements only from local officials in office at the time the application is submitted.
Gulfside said in Tuesday's filing that it was "obvious" the rule was changed "for the purpose of adding a requirement in order to exclude Gulfside's letters of support from Judge Gibson and Mayor Horton. There can be no doubt that these added requirements are unconstitutional."
While Pine Bluff Mayor Shirley Washington and Jefferson County's new county judge, Gerald Robinson, immediately issued an endorsement for Saracen Casino Resort, the new Pope County officials refused to issue an endorsement for a casino license there.
Pope County voters had soundly rejected Amendment 100 and were vocal about not wanting a casino in their county.
The Jan. 3, 2019, email from Freeland was followed 45 minutes later with an email from John Shelnutt -- the administrator for economic analysis and tax research for the state Department of Finance and Administration -- to Larry Walther, head of the department, and other department officials giving a "worst case" scenario of the impact on state general revenue if only three casinos were opened instead of four.
On Jan. 10, 2019, the Racing Commission approved the rule change.
In a Feb. 5, 2019, email to Freeland, Bureau of Legislative Review attorney Kathryn Henry expressed concern about the proposed change.
"This appears to be an addition to the Rule not mentioned in the language of Amendment 100," Henry said in the email, according to the documents filed Tuesday.
Freeland responded in an email later that evening that the change "was published as a proposed Rule after a lengthy process of review and meetings between the ARC, DF&A and the Governor's office."
"Rule 2.13(4)(b) is consistent with the meaning and intent of Amendment 100," Freeland continued in the email. "If letters of support were allowed from county officials or mayors holding office in 2018, those letters would have been issued prior to the adoption of the Casino Gaming rules by the ARC; prior to the opening of the application process; and prior to the submission of a casino gaming license application by any person or entity."
The gambling rules became effective March 14 after a legislative review. The Racing Commission opened a 30-day window on May 1 to accept applications for casino licenses in Jefferson and Pope counties.
That window closed on May 30 and all five applicants -- Gulfside Casino Partnership, Cherokee Nation Businesses of Oklahoma, Kehl Management of Iowa, Warner Gaming of Nevada and Choctaw Nation Division of Commerce of Oklahoma -- for the Pope County license were rejected by the Racing Commission on June 13 because they lacked endorsements of current local officials.
A second application window for the Pope County license was opened after the county Quorum Court passed a resolution in support of Cherokee Nation Businesses for the license. The Cherokees and the Choctaw submitted an application then.
But the Racing Commission on Jan. 10 this year "abandoned" the second application window after Pulaski County Circuit Judge Wendell Griffen -- acting in a lawsuit filed by the anti-casino group Citizens of a Better Pope County against the commission -- barred the commission from issuing a Pope County license pending further hearings.
The Cherokees have since applied again for the license.
The Gulfside case is set for a March 30 hearing to consider motions. No hearing dates have been set for the case filed by Citizens for a Better Pope County.
Metro on 02/05/2020