A Pulaski County circuit judge Friday afternoon declared unconstitutional -- for the second time -- a commission rule and state law that required that letters of endorsements for casino licenses come from local officials in office at the time the license application is submitted.
The ruling by Pulaski County Circuit Judge Tim Fox supports a June 18, 2020, decision by the Arkansas Racing Commission to issue Gulfside Casino Partnership a license to build and operate a casino in Pope County.
But also in Friday's ruling, Fox denied Gulfside's request that the court remand the matter to the Racing Commission with instructions requiring that the Pope County license be issued to Gulfside.
Fox said in the ruling that the state Racing Commission rule and Arkansas Code Annotated 23-117-101(b) -- both of which require that the endorsements come from local officials in office at the time of application for a license -- add an extra requirement to constitutional Amendment 100.
The amendment was approved by voters in 2018 to authorize the expansion of gambling operations at racetracks in Hot Springs and West Memphis into full-fledged casinos. It also allowed the Racing Commission to issue one casino license each in Jefferson and Pope counties. The question of which company should be awarded the Pope County casino license has been contentious for years.
Amendment 100 does not stipulate when the endorsements have to be dated or submitted.
"With today's ruling once again confirming the constitutionality of our letter of support, we are moving forward with our license to build an entertainment destination and economic engine in Pope County," Gulfside attorney Lucas Rowan said in an email.
The case was filed by Gulfside in 2019 after its license application was initially denied by the Racing Commission because its letter of support was signed by County Judge Jim Ed Gibson just days before his term expired on Dec. 31, 2018.
Cherokee Nation Businesses later submitted an application to the Racing Commission after gaining support from Ben Cross, the current Pope County county judge, as well as from the Pope County Quorum Court. Gulfside and Cherokee Nation Businesses were two of five applicants for the license.
"We expected Judge Fox would enter an order consistent with his ruling last year," Cherokee Nation Businesses attorney Dustin McDaniel said in an email. "However, we do appreciate the Court's quick attention to the matter. We will file a Notice of Appeal next week and proceed to the Supreme Court, where we are confident the state statute and Racing Commission rule will be upheld."
Fox's Friday ruling about the unconstitutionality of the state law and Racing Commission rule is a repeat of one issued early last year.
In July 2020, Fox denied Cherokee Nation Businesses' attempt to intervene in the Gulfside lawsuit, ruling that the Oklahoma casino operator did not qualify for a casino license in Pope County because the new company it created, Legends Resort and Casino LLC, had no experience conducting casino gambling, as required under Amendment 100.
But the state Supreme Court vacated that ruling and sent the case back to Fox, who heard the case again earlier this month, but with Cherokee Nation Businesses' participation.
While Fox's ruling in general was brief, he provided extensive footnotes. In one lengthy footnote, Fox referred to the five different court cases in the system regarding the Pope County casino license.
The Racing Commission elected not to appeal his previous ruling that the Racing Commission rule was unconstitutional and instead the panel proceeded with the merit-based hearings to award the gambling license, Fox said.
"As both applicants have now had the opportunity to have their applications fully heard by the appellee Racing Commission and the losing applicant, intervenor CNB, has appealed such decision to the high court, it seems this procedural issue matter should yield to that appeal," Fox said in a footnote. "The current pendency of both pieces of litigation places the Racing Commission in a legally contradictory position.
"In the other appeal, which challenges the merit-based award of the license, the Racing Commission has a legal duty to defend its decision that it was in the best interests of Arkansas citizens and taxpayers to award the license to appellant Gulfside. In this appeal, appellee Racing Commission, inexplicably, is still attempting to invalidate the applicant whom it has now twice decided is the superior applicant for Arkansas citizens and taxpayers."
Gulfside, based in Mississippi, and the Cherokees, based in Oklahoma, were the last two Pope County license applicants standing after all five original applicants -- including them -- were rejected by the commission in the first application period in 2019.
The commission ruled that none complied with its rule for local endorsements. Gulfside then filed suit.
Gulfside was the only one of the original applicants to include endorsement letters.
Cherokee Nation Businesses received local endorsements from Pope County officials after promising a $38 million economic development agreement that would be allocated to various municipalities, fire protection districts and agencies determined by local elected officials.
Cherokee Nation Businesses also promised to donate $2 million a year to a charitable foundation developed in concert with county officials.
Cherokee Nation Businesses operates 10 casinos in Oklahoma. Gulfside Casino Partnership operates a casino in Gulfport, Miss.
Gulfside is proposing a $254 million casino and resort with 1,900 slot machines, 90 table games and 500 hotel rooms near Russellville north of Interstate 40, off Exit 84.
The Cherokees are proposing a $225 million casino and resort with 1,100 slot machines, 32 table games and 200 hotel rooms near Russellville off Hob Nob Road.
In June 2019, the Cherokees announced that they are partnering with Legends -- a stadium management company founded by Dallas Cowboys owner Jerry Jones and the late George Steinbrenner, who owned the New York Yankees -- to "manage the process for the design and development" of the Pope County casino should the tribe be awarded the license.