Arkansas Racing Commission awards Pope County casino license

“It’s time to get on with the business at hand, and I think we need to make sure that this process comes to a completion,” Mark Lamberth, acting chairman of the Arkansas Racing Commission, said Friday in calling for awarding the Pope County casino license to Cherokee Nation Businesses LLC/Legends Resort and Casino LLC.(Arkansas Democrat-Gazette/Staci Vandagriff)

The Pope County casino license was handed to Cherokee Nation Businesses on Friday afternoon to build Legends Resort and Casino shortly after the Arkansas Racing Commission ruled to nullify the license awarded previously to Gulfside Casino Partnership.

The Pope County gambling license has long been a source of turmoil for the county and the state, resulting in numerous court cases, including some still-unsettled legal matters.

The Cherokees plan to construct Legends -- a $225 million casino and resort with 1,100 slot machines, 32 table games and 200 hotel rooms -- near Russellville, off Hob Nob Road.

"Today marks an exciting and significant milestone in what has been a long and complicated process. Over the course of this three-year journey, we have remained fully committed to our efforts and stayed true to CNB's core values of honesty and transparency," Chuck Garrett, CEO of Cherokee Nation Businesses, said in an email Friday. "Community comes first for us, and we are thrilled to continue building on the already strong relationships we have established with local officials and the community at large in Pope County and across the River Valley."

The latest action comes after the Arkansas Supreme Court reversed and dismissed a ruling by Pulaski County Circuit Judge Tim Fox that declared unconstitutional a commission rule and state law that required letters of endorsements for casino licenses to come from local officials in office at the time the license application is submitted.

The ruling essentially invalidated an application from Gulfside Casino Partnership, leaving only the application for Legends Resort and Casino.

THE LICENSE

The gambling license issued Friday lists the recipient as Cherokee Nation Businesses, LLC/Legends Resort and Casino, LLC.

The initial application for the gambling license was solely in the name of Cherokee Nation Businesses.

Legends Resort and Casino LLC -- which was incorporated in Arkansas by the Cherokees in 2019 -- was added when a new application was submitted in 2020, Scott Hardin spokesman for the state Department of Finance and Administration, which oversees the Racing Commission, said Friday.

The issue of the corporate entity that will hold the Pope County license is one of the many matters that has been litigated.

"Legends has no casino gaming experience and, therefore, is not a qualified applicant," Gulfside attorney Lucas Rowan said. "This issue is pending in circuit court, and we expect it will be resolved through the legal system."

In June 2019, the Cherokees announced that they were 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 they be awarded the license.

In February, the Arkansas Supreme Court reversed a Fox ruling to deny Cherokee Nation Businesses' request to intervene in the case because Legends Resort and Casino was a new company without any gambling experience -- which state gambling rules require.

That Supreme Court ruling put Cherokee Nation Businesses back in the game.

But on Tuesday, Gulfside filed a motion for summary judgment in Pulaski County Circuit Court (case 60CV-21-1653), saying Legends Resort and Casino should be disqualified because it doesn't have casino gambling experience as required under Amendment 100 to the Arkansas Constitution, which voters approved in 2018, allowing casinos in Pope and Jefferson counties as well as at the established race tracks in Hot Springs and West Memphis.

Cherokee Nation Entertainment LLC operates 10 casinos in Oklahoma, but its connection to Legends Resort and Casino is that they "have the same sole member, Cherokee Nation Businesses," according to a brief in support of the motion.

With the Pope County license in hand Friday, Cherokee Nation Businesses attorney Dustin McDaniel filed motions to dismiss court cases in Pulaski County and Pope County.

"We will act quickly to resolve all litigation issues so that CNB can proceed with breaking ground and delivering the $38.8 million check committed in the Economic Development Agreement with Pope County," McDaniel said.

Ben Cross, county judge of Pope County, also said Friday in a news release that he instructed his legal counsel to dismiss the county's current litigation against the Arkansas Racing Commission. Those actions sought to prohibit a temporary casino from being constructed by Gulfside.

"The ruling by the Arkansas Supreme Court, and the Racing Commission actions today, render moot the need for any such litigation, as Legends Resort is being constructed in a single phase, all-inclusive build out," Cross said.

THE MEETING

Friday's Racing Commission meeting, which was held with the majority of the members participating by telephone, lasted less than 30 minutes, but was fraught with lengthy moments of silence when asked for comments or a motion to vote on the issue.

Brian Bowen, chief of staff for Arkansas Attorney General Leslie Rutledge, told the commission that it is the attorney general's recommendation that the Gulfside casino license be voided and a license be awarded to Cherokee Nation Businesses.

Commissioner Bo Hunter said he was not prepared for the granting of the license yet because it was still up in the air whether Cherokee Nation Businesses is a qualified applicant.

Commissioner Michael Post also objected, saying that it would be prudent to have a "slow and methodical process" before the gaming license is awarded.

Assistant Attorney General KaTina Hodge reminded the commissioners that the Pope County casino license has to be issued within 30 days. Hunter said he was confused about when the 30-day clock started.

Hodge said it began on July 18, 2020 when the application window closed, but court activity stalled the clock.

Bowen said that it could mean 30 days from the issuance of the Supreme Court mandate earlier this week, but "technically, the clock started when you closed your application process."

"It doesn't really answer my question," Hunter said.

Commissioner Mark Lamberth, who was acting as chairman after Alex Lieblong recused himself from the issue, said that the deadline has long-since passed, and he didn't see the wisdom in delaying it any further.

Lamberth's request for a motion was met with a lengthy silence.

"Oh, come on," he said, and was again met with silence.

Lamberth -- who said previously that a commission vote was a mere formality and not required -- directed Racing Commission staff to void Gulfside's license and issue a refund before awarding a license to Cherokee Nation Businesses by the close of business Monday.

Commissioner Steve Landers, who was on the telephone, interrupted, saying that he couldn't get through the line to ask questions or make the motion.

In the end, Landers made the motion with a second by Commissioner Denny East to void the license originally issued to Gulfside Casino Partnership, refund the $250,000 deposit then cash Cherokee Nation Businesses' deposit check and issue the license by the end of the work day Monday.

The motion passed with three "Yes" votes from Lamberth, Landers and East; two "No" votes from Post and Hunter; and recusal from Lieblong and Commissioner Butch Rice.

When Lamberth took a roll call for the vote, he called Rice's name a few times and was answered with silence each time.

"It's time to get on with the business at hand and I think we need to make sure that this process comes to a completion," Lamberth said.

THE BEGINNING

The lawsuit that led to the awarding of the license to the Cherokees on Friday began last year after Gulfside filed suit when its license application was initially denied by the Racing Commission, which rejected it because the required letter of support was signed by former Pope County Judge Jim Ed Gibson just days before his term expired on Dec. 31, 2018.

Five applicants, including Gulfside and Cherokee Nation Businesses, applied for the Pope County casino license during the initial May 2019 application period.

The commission denied each application as incomplete for failure to include a letter of support from the county judge or a resolution from the Pope County Quorum Court.

Amendment 100 requires local endorsements, but it does not stipulate when the endorsements have to be dated or submitted.

The recent Supreme Court ruling makes it clear that a Racing Commission rule and a state law requiring letters of endorsements for casino licenses come from local officials in office at the time the license application is submitted.

When another application window opened for the Pope County license, both Gulfside and the Cherokees again applied.

This time, however, Cherokee Nation Businesses included a letter of support from Cross, the current Pope County judge. The letter was negotiated after a multi-million dollar economic development agreement was entered.

Cross said Friday that the license being issued to the Cherokees will bring "several thousand" construction jobs and over 1,000 permanent jobs to the River Valley, stimulating the economy and allowing for public infrastructure improvements "not realized since the early 1980s" in the region.

"The resort construction, combined with an economic development agreement valued at a minimum of $38.8 million in 'up front' dollars for local governments and non-profits, will serve to alleviate many of the aging infrastructure issues which have beleaguered many of our smaller communities," Cross said.

The concurrent establishment of a non-profit board to specifically fund local initiatives will produce an additional $16 million during the first licensing period as well, he added.

"Combine all this with the influx of future tax revenue, and we have a recognized asset in keeping our local tax rates considerably lower than our neighboring counties who compete for economic growth," Cross said.

Garrett said the resort will have "elevated amenities" specifically designed to reflect the "beautiful and unique" qualities of the River Valley.

"Our continued thanks to Pope County Judge Ben Cross and the hundreds of community supporters who have advocated for CNB as your operator of choice," Garrett said. "We are eager to put forth our large-scale development plans to the Russellville Planning commission, and ultimately, for litigation to come to an end so that we can proceed with construction."