Filing by casino foes claims rules flouted

Wednesday 29th April 2020

An anti-casino group asked a circuit judge to bar the state Racing Commission from issuing a license for a casino in Pope County, saying as justification that the commission failed to follow its own rules when requesting applications.

Both the initial application window and a since-abandoned second window should be voided because the commission failed to assign a points value to each merit criterion in the scoring of an application and also did not list the points in any of its notices soliciting applications for either the Pope County or Jefferson County casino licenses, said Jerry Malone, attorney for Citizens for a Better Pope County, in a request filed late Monday in Pulaski County Circuit Court.

"By failing to publish the required 'worth a number of points' information in the Commission's Notice of First Application Period, or in any subsequent notices of application periods, the Commission failed to comply with the applicable Casino Gaming Rules, thereby violating the Casino Gaming Rules, the Administrative Procedures Act, [Constitutional] Amendment 100, and other applicable laws and legal requirements," Malone said in the filing.

Specifically, the group said the commission violated Casino Gaming Rule 2.13.9, which says in part: "Each merit criterion will be worth a number of points announced by the commission in the notice of open application period."

When asked why the commission did not allot points on the criteria, commission spokesman Scott Hardin said that the matter would be discussed at an upcoming meeting.

"If schedules allow, we anticipate this may take place next week," Hardin said.

When asked if a points-based scoring system existed and how the contracted evaluator was basing his assessment, Hardin again said the matters would be covered at the next commission meeting.

Citizens for a Better Pope County sued the Racing Commission previously, on Dec. 27, leading to a temporary restraining order from Pulaski County Circuit Judge Wendell Griffen barring the commission from issuing a casino license based on applications received during a second window that opened in August.

Griffen said the commission violated its own rules when it opened the second window. The commission has since "abandoned" the second window and, earlier this month, voted to accept an application from Cherokee Nation Businesses for the Pope County license based on another gambling rule on a "good cause" basis. That application and one from Gulfside Casino Partnership will be evaluated.

At the close of the first application window on May 30, five applicants had tossed their hats in the ring for the Pope County casino license and one applicant, the Quapaw Nation, sought the Jefferson County license.

While the Racing Commission awarded the Jefferson County license to the Quapaws, it rejected all five of the Pope County applicants because none contained the endorsement of 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.

Gulfside Casino Partnership 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.

Earlier this year, Pulaski County Circuit Judge Tim Fox sent Gulfside's application back to the Racing Commission to consider on its merits. Fox ruled that both the commission rule and new law on endorsements were unconstitutional because they impose "an additional qualification, sometimes referred to as a 'negative' qualification, beyond the plain and unambiguous language of Amendment 100."

The commission's second application window was opened 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.

Now, both Gulfside and the Cherokee's applications are being evaluated by an independent contractor who will make a recommendation to the commission.

Citizens for a Better Pope County, in its latest court filing, said the commission has never modified its rules in accordance with the Arkansas Administrative Procedure Act in order to bypass the rule that requires that points be assigned and announced at the opening of the application windows.

The rules are applicable to the "award of the one and only available casino license for each Pope County and Jefferson County" licenses.

The Quapaw Nation's Saracen Casino Resort in Pine Bluff is under construction and -- before the temporary closure of casinos because of the coronavirus pandemic -- was operating a casino annex.

John Berrey, chairman of Saracen Development, said he is proud that the awarding of a casino license in Jefferson County was done without controversy.

"We're confident that whatever disagreements occur over the license in Pope County will not spill over in to the already settled issue of a Jefferson County license," Berrey said. "Unlike in Pope County, we were the sole applicant for the license we were awarded, and the Jefferson County scenario was and is very different from that in Pope."

According to Rule 2.13.9.b, the criteria that will be assigned a points value include: experience conducting casino gambling, timeline for opening a casino, proof of financial stability and access to financial resources and detailed summary of proposed casino.

Rule 2.13.9 requires that a review panel be comprised of commission members to evaluate the applications and award points for each merit criterion. The points will then be totaled and each application will be ranked from the highest to the lowest.

"The Racing Commission has failed to comply with, at a minimum, the requirements of Rule 2.13," Malone of Citizens for a Better Pope County said in the filing, adding that "any actions taken on applications submitted to or otherwise accepted by it based on any and all such non-compliant notices are unlawful, void, illegal and ultra vires." The latter is a Latin phrase referring to acting outside one's authority.

Cherokee Nation Businesses and Gulfside Casino Partnership representatives declined to comment on the court filing.

Cross, the county judge of Pope County, said he has vowed from the start of this entire issue to respect the various court pleadings.

"This pleading is no different, and we will await proper disposition of this as well. As a county, we have complied and met all the criteria established by Amendment 100 and will continue to respect the work of the Arkansas Racing Commission as they move forward with awarding a license," Cross said. "As neither current casino applicant has raised this issue as a litigant who would have standing in the case, it will be interesting to see the court's interpretation of a third party interest, without direct standing on the issue, that has been raised in this particular pleading."

Metro on 04/29/2020

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