Arkansas casinos measure headed to court

Take it off ballot, suit urges justices

FILE — Janelle Jessen/Herald-Leader Patrons of the Cherokee Casino in West Siloam Springs gathered to play craps on Aug. 17 just an hour after the casino opened live gaming. Oklahoma law prevented casinos from offering games that included dice or balls, but a change in the law allowed them to begin offering craps and roulette. The Cherokee Casino in West Siloam was among the first in the state to offer the new games.

A committee opposed to a proposed constitutional amendment to authorize four casinos in Arkansas asked the state Supreme Court on Monday to strike the proposal from the Nov. 6 general election ballot.

The lawsuit challenging the casino proposal means that the state Supreme Court will decide whether to block four of the five proposed measures on the ballot.

The committee fighting the casino amendment is called Ensuring Arkansas' Future. It filed a statement of organization with the Arkansas Ethics Commission on Monday. Derick Easter of Pine Bluff is its chairman and Steve Copley of North Little Rock is its vice chairman and treasurer.

Four of the committee's members are plaintiffs in the lawsuit filed with the high court by attorney Scott Trotter of Little Rock against Republican Secretary of State Mark Martin. They are Corinne Stiritz of Pope County, Bill Wheeler of Crittenden County, Kenneth Carney of Garland County and Bobby Gene Smith of Jefferson County.

The Ensuring Arkansas' Future committee filed its lawsuit five days after Martin said the casino measure's sponsors qualified their proposal for the general election ballot. The measure's sponsors are the Driving Arkansas Forward and Arkansas Jobs Coalition committees. The measure will be Issue 4.

The proposed amendment would allow the state Racing Commission to issue casino licenses to: an applicant in Jefferson County within 2 miles of Pine Bluff; an applicant in Pope County within 2 miles of Russellville; a franchise holder in Crittenden County, which is now Southland Racing Corp., at or adjacent to Southland Gaming and Racing in West Memphis; and a franchise holder in Garland County, which is now Oaklawn Jockey Club, at or adjacent to Oaklawn Racing and Gaming in Hot Springs.

Under current state law, Oaklawn and Southland operate electronic games of skill, so the measure would allow for expansion of their gambling operations, including sports betting.

The Ensuring Arkansas' Future committee's lawsuit said the high court should strike Issue 4 from the ballot or bar the secretary of state from canvassing or certifying any ballots cast for the proposal. The committee cited problems with Issue 4's popular name and ballot title. Both are the language that appears on the ballot for voters to read.

The lawsuit said Issue 4's popular name is misleading and not intelligible, fair and impartial in three particular instances.

For example, the lawsuit said, the popular name designates Southland Racing Corp. and Oaklawn Jockey Club Inc. as entities that must receive casino licenses, but the amendment's text does not name those corporations.

The lawsuit said the ballot title fails to convey an intelligible idea of the scope and impact of the proposal, is materially misleading to the voters and omits material information that is essential for a fair understanding of the proposal in 24 different ways.

Nate Steel, counsel for the Driving Arkansas Forward and Arkansas Jobs Coalition committees, said Monday: "We see this for what it is: an effort to circumvent our state's initiative process and the will of 100,000 Arkansans who signed petitions to get this issue on the ballot.

"This lawsuit is not only meritless, but disingenuous, as evidenced by the fact that the attorney for this group, Mr. Trotter, contacted our campaign on multiple occasions during the certification process in support of the amendment," Steel said in a written statement. "We believe the attorney general [Republican Leslie Rutledge] was diligent and correct in reviewing this ballot title, and we have no doubt that it will withstand this legal challenge."

But Trotter said he disagreed with Steel's remarks.

"I recall having one phone conversation in May with counsel Alex Gray, telling him that while I would be against the casino proposal as I understood it from press reports, I was troubled that the attorney general was consistently rejecting so many popular names and ballot titles on multiple initiative proposals dealing with different issues," Trotter said in a written statement.

"I said that if there was a court hearing dealing with the AG's many rejections of multiple proposals on different issues, then I would consider being a witness as to the importance of the Attorney General's office in successfully revising and approving ballot titles and popular names," Trotter said. "I indicated that as a witness I might recount my own experiences on ballot title submittals. I did not discuss with Mr. Gray the substance of the proposed casino amendment or its popular name and ballot title, which at the time of the conversation I had not read. I had no role in the drafting of the casino proposal or its popular name and ballot title.

"As for serving as counsel for the petitioners who have brought the lawsuit, I have committed to not charging them or anyone else fees for my own time spent on the case," Trotter said.

Gray said in a written statement that "Mr Trotter's statement is mostly inaccurate, but I can confirm that we declined his assistance on this amendment that he now apparently opposes."

Under the proposed amendment, a licensee in Jefferson or Pope counties would be required pay an application fee, demonstrate experience in casino gambling and submit a letter of support from the county judge or a resolution from the county quorum court. If the proposed casino would be located in a city, the licensee would also need a letter of support from that city's mayor.

The Quapaw tribe has expressed interest in applying for a casino license in Jefferson County, while the Cherokee Nation has indicated its interest in the possibility of being involved in the casino in Pope County.

The Driving Arkansas Forward and Arkansas Jobs Coalition committees are chaired by lobbyist Don Tilton, whose clients include the Quapaw tribe. Through July 31, the Driving Arkansas Forward committee reported a total of $2.26 million in contributions, including $1.2 million from the Downstream Development Authority of the Quapaw Tribe in Quapaw, Okla., and $1.05 million from Cherokee Nation Businesses LLC of Catoosa, Okla.

Under Issue 4, a casino's net gambling receipts would be taxed at 13 percent on the first $150 million and 20 percent on receipts above that amount. Fifty-five percent would go to state general revenue and 17.5 percent to the state Racing Commission for purses for live horse and greyhound racing. Eight percent of the receipts would go to the county in which the casino is located, and 19.5 percent would go to the city or town in which the casino sits -- or to the county, if the casino is not in a city or a town.

The sponsors have estimated the casinos would initially raise about $66 million a year for the state, about $33 million a year for the cities and counties where the casinos are located, and about $25 million a year for purse support at Oaklawn and Southland.

They've disputed projections by state Department of Finance and Administration officials that the state actually would receive less during fiscal years 2020-22. The state collected $64.3 million from Oaklawn's and Southland's electronic games of skill in fiscal 2018, which ended June 30.

Other measures approved for the 2018 general election ballot are:

• Issue 1, which would limit attorneys' contingency fees; limit noneconomic damages to $500,000; cap punitive damages, with certain exceptions, to the greater of either $500,000 or three times the amount of compensatory damages awarded; and allow the Legislature to amend and repeal the state Supreme Court's rules.

Last Thursday, Pulaski County Circuit Judge Mackie Pierce struck the proposal from the ballot in a challenge filed by attorney David Couch. The ruling has been appealed to the state Supreme Court.

• Issue 2, which would require the General Assembly to enact a law requiring voters to present valid photo identification before they receive ballots at the polls. Those voting by absentee ballot would have to enclose copies of their ID. Issue 2 has not been challenged in court.

• Issue 3, which would limit state representatives to three two-year terms and senators to two four-year terms and all lawmakers to serving a maximum of 10 years. Amendment 94 to the Arkansas Constitution, approved in 2014, allows lawmakers to serve up to 16 years. Senators, who draw two-year terms after once-a-decade redistricting, are allowed those to go beyond the 16-year limit. The state Supreme Court on Friday appointed attorney Mark Hewitt as special master in a challenge to the proposed ballot measure filed by the Arkansans for Common Sense Term Limits committee, led by Arkansas State Chamber of Commerce President Randy Zook. Hewitt is required to file his report with the Supreme Court by Sept. 25.

• Issue 5, which would gradually increase the state's minimum wage by $2.50 per hour to $11 per hour. The state's high court on Thursday appointed former Court of Appeals Judge Sam Bird as a special master in a challenge to the proposal from the Arkansans for a Strong Economy committee, also led by Zook. Bird is required to file his report with the high court by Sept. 24.

A Section on 09/11/2018