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Just one hour, casino operator requests in bid to have hearing in Pulaski County

by Jeannie Roberts | December 2, 2019 at 6:57 a.m.
FILE — A roulette wheel spins at Cherokee Casino & Hotel in West Siloam Springs, Okla.

A Mississippi casino operator -- which is suing the state Racing Commission for tossing out its application for a Pope County gaming license -- asked a Pulaski County circuit judge for a one-hour hearing, saying in a letter released last week that the company could not ethically follow his ruling to return the case to Pope County.

"A Gulfside motion to transfer venue to Pope County would require its counsel to knowingly make a material misrepresentation to this Court that venue is proper in Pope County when the Circuit Court of Pope County has already found that it is not," Gulfside Casino Partnership attorney Casey Castleberry said in the letter last week to Pulaski County Circuit Judge Tim Fox.

Gulfside was one of five casino operators -- including Cherokee Nation Businesses of Oklahoma, Kehl Management of Iowa, Warner Gaming of Nevada and Choctaw Nation Division of Commerce of Oklahoma -- whose applications for a Pope County license were rejected in June by the Racing Commission because none at the time contained endorsements by current local officials.

The state constitution's Amendment 100, approved by voters in November, allows for a new casino in both Pope and Jefferson counties, in addition to allowing the expansion of gambling at the racetracks in Hot Springs and West Memphis. Amendment 100 says the Pope and Jefferson county casinos must be endorsed by local officials, but it doesn't specify when.

A Racing Commission rule and a state law added that the endorsements must come from officials serving at the time the license application is made.

Gulfside's application included endorsements of local officials who had left office by the time the application was filed. Gulfside sued the Racing Commission on Aug. 15 in Pulaski County Circuit Court, the same day the commission denied its appeal.

The case has been volleyed since August between Fox and 5th Judicial Circuit Judge Bill Pearson, who serves in Pope County, with Fox initially sending the lawsuit to Pope County.

Pearson later sent the case back to Pulaski County, but he said at the time that he foresaw "two circuit judges to be competing" and continually sending the case back and forth.

"When does it stop?" Pearson said, according to a transcript of the Sept. 23 court proceedings.

On Nov. 25, Fox told Gulfside officials that they could either stand in line behind 650 pending cases older than Gulfside's appeal or transfer the case back to Pope County for a faster resolution.

Gulfside responded by asking Fox for a one-hour hearing on the venue question at his "earliest convenience."

"I cannot ethically move to transfer this case to Pope County, as Gulfside neither resides nor does business in Pope County," Castleberry said in the letter to Fox.

Gulfside argued in the letter that Arkansas Code Annotated 15-15-207(b) requires the case to be heard in Pulaski County. Previous state law required administrative appeals to be heard only in Pulaski County Circuit Court.

"As the Court is aware, Gulfside has filed a Motion for Preliminary Injunction, wherein it demonstrates that it will suffer irreparable harm, if the Racing Commission is not enjoined from issuing a license," Castleberry said in the letter. "I do not presume to represent to the Court that this case is any more or less important than the many other cases on the Court's docket. Every case is of the utmost importance to its litigants. However, this is a case that requires an expeditious ruling, and Arkansas law provides for no other venue in which Gulfside can seek the relief necessary to preserve its claims."

Pearson said in his earlier ruling that Arkansas Code Annotated 25-15-212 also "clearly puts it within the Pulaski County Circuit Court as an administrative appeal."

On Nov. 25, Fox cited a change-in-venue law by the 2017 General Assembly that gives jurisdiction to either court.

In his August ruling initially transferring the case to Pope County, Fox said, "There are hundreds of millions of dollars at stake relating to construction and maintenance, all of which will occur in Pope County."

Cherokee Nation Businesses intervened in the case because that business has a vested interest in the outcome. It reapplied for the license, this time with the endorsement of current officials. The application is pending.

On Aug. 13, the Pope County Quorum Court approved a resolution supporting Cherokee Nation Businesses for a state license to operate a casino. Ben Cross, the county judge of Pope County, also negotiated an 11-page Economic Development Agreement with the Cherokees that included a $38.8 million "economic development fee" that would be disbursed among the county, some cities and some nonprofit organizations.

In court filings, Cherokee Nation Businesses said it agrees that the Gulfside case belongs in Pulaski County.

"We were disappointed that our motion to dismiss was not heard. The people of Pope County and the state of Arkansas want and deserve rapid resolution on any outstanding litigation," said Chuck Garrett, chief executive officer of Cherokee Nation Businesses. "The least desirable outcome for all parties involved would be an open-ended delay."

Cross also said that the case belongs in Pulaski County.

"I've always said any litigation concerning the casino should be handled on the state level as it involves constitutional issues," Cross said. "From a purely speculative standpoint, I anticipate the parties involved will at some point appeal the circuit judge's ruling on his procedural decision and likely ask the Supreme Court to reassign the case within Pulaski County."

Scott Hardin, a spokesman for the state Department of Finance and Administration, said the Racing Commission believes Pulaski County is the correct location for the litigation because it's an administrative appeal of a decision issued in the county.

"However, the impact on the timeline for issuance of a license is yet to be determined," Hardin said. "Commissioners must now consider whether their initial decision to hold issuance of the license will remain in place until litigation is fully resolved, including the appeal process. This will be considered by Commissioners at an upcoming meeting."

The next meeting of the commission is this month.

The state Racing Commission, after denying Gulfside's appeal, opened a 90-day window to accept applications for Pope County casino gaming licenses. That window closed Nov. 18 with applications submitted by Cherokee Nation Businesses and the Choctaw Nation.

The application from the Choctaw Nation does not include letters of support from local elected officials.

The Racing Commission decided Oct. 17 to wait until lower-court rulings are issued in two lawsuits -- Gulfside's and one from the anti-casino group Citizens for a Better Pope County that was tossed out by a circuit judge on Oct. 29 -- before considering a decision on any application submitted for the Pope County casino license.

According to the gaming rules adopted by the Racing Commission earlier this year, the commission "shall award and issue a casino license within 30 days" of the close of the application period.

"The rule requiring a license be issued within 30 days of the close of the application period may be waived by the Commission, with ongoing litigation certainly a reason this would take place," Hardin said. "We anticipate the Commission will formally waive this requirement at the next meeting."

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