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story.lead_photo.caption FILE — A roulette wheel spins at Cherokee Casino & Hotel in West Siloam Springs, Okla.

The Arkansas Racing Commission on Thursday decided to wait until after the outcome of two lawsuits before considering applicants for a casino license in Pope County.

One lawsuit, filed by a Mississippi company, pertains to the commission's rejection of its application for the license. The other suit challenges the Quorum Court's endorsement of a different applicant.

Both lawsuits involve issues of endorsements, as required under Amendment 100 to the state constitution. Successful applicants for licenses in Pope and Jefferson counties must have endorsements of county officials and city officials if the casino is to be placed in a city. The amendment doesn't require local endorsements for the expansion of racetrack-based casinos in Hot Springs and West Memphis.

On another topic, the commission also approved a license transfer for the casino in Jefferson County.

In the matter of the lawsuits, Byron Freeland, an attorney for the commission, told the panel's seven members, "My recommendation to the commission is that the commission wait until you hear what the court does on Nov. 25 and on Oct. 29 before you take any action on granting or rejecting an application for a casino license in Pope County.

"These lawsuits are pending, and the hearings are close enough that really, it is really kind of immaterial as far as the number of days later that we will have a lot more information about what the courts consider to be the proper procedure and the law in this case," he said.

[RELATED: See complete Democrat-Gazette coverage of casinos in Arkansas at arkansasonline.com/casinos]

"I'm confident that the commission has followed the law to this point, followed Amendment 100, and the commission's position will prevail," Freeland said. "But the fact remains there are challenges to those positions that are pending before the courts in the state of Arkansas, and I am telling you that I think it will be a prudent thing to do to wait before you make a ruling on an application in Pope County until the process at the local court level has been resolved."

If there are appeals of the circuit judges' rulings, "we will have to make a determination on whether to wait on those appeals," he said.

The cases are:

• On Nov. 25, Pulaski County Circuit Judge Tim Fox is scheduled to hold a hearing in a lawsuit filed by Gulfside Casino Partnership of Mississippi challenging the rejection of its license application by the Racing Commission, Freeland said.

Gulfside filed the suit Aug. 15, the same day that the commission denied an appeal from the Mississippi casino operator to reverse a denial of its application in May for the Pope County casino license.

Gulfside also is challenging the commission's assertion that Gulfside's application was incomplete because it did not contain an endorsement from current local officials.

Four other applicants -- Cherokee Nation Businesses of Oklahoma, Kehl Management of Iowa, Warner Gaming of Nevada and Choctaw Nation Division of Commerce of Oklahoma -- were rejected by the commission in June for the same reason.

But unlike the others, Gulfside's application included letters of endorsement from local officials issued right before those officials left office in December.

• On Oct. 29, a circuit judge in Pope County is to hold a hearing in a suit by James Knight, on behalf of Citizens for a Better Pope County, against the Pope County Quorum Court and County Judge Ben Cross, Freeland said.

The lawsuit claims that the Pope County Quorum Court's Aug. 13 resolution endorsing Cherokee Nation Businesses for the license is in direct contradiction to an initiated county ordinance passed by the county's voters in 2018. That ordinance said a special election must be held to allow voters to decide if they want local officials to endorse a casino license.

The suit also asked that no casino be endorsed without first holding an election, as required by the initiated ordinance.

Cross 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 -- not Russellville -- and nonprofit organizations.

The Racing Commission, after denying Gulfside's appeal in August, opened a 90-day window to again accept applications for the license for a casino in Pope County. That window closes Nov. 18.

The Russellville City Council decided to examine casino applicants after the Quorum Court made its endorsement.

On Thursday evening, the Russellville City Council's finance committee tabled a proposed resolution for the city to support Kehl Management.

Kehl was chosen by the city's gambling committee, which earlier this month received proposals from three of the original five applicants: Kehl, Choctaw Nation and Warner Gaming.

The gambling committee was set up in early September as an "open and transparent" answer to the Pope County Quorum Court's surprise endorsement of Cherokee Nation Businesses.

City Councilman Mark Tripp said the resolution should be tabled because of incorrect numbers on a spreadsheet prepared by the gambling committee that compared the proposals.

Even if the city endorses an applicant, that applicant must also be endorsed by the county under Amendment 100.

Cross said that while he respects Kehl owner Dan Kehl and his group "immensely as to their business model and practice," he does "not anticipate the court nor myself entertaining any additional vendor prospects, or issuing any additional letters of support."

But Robert McLarty, spokesman for Kehl Management, said the selection of Kehl by the committee "validated that Elite Casinos Resorts is the best community partner for Russellville and Pope County."

"They specially highlighted out that our economic offer was the clear winner. We have 32 days to get a letter of support from the Quorum Court leaders and will work diligently towards that goal," McLarty said. "In light of the review of the committee, a second letter from the Quorum Court just makes good sense."

In the matter of the license transfer Thursday, the Racing Commission approved transferring the license granted to Downstream Development Authority of the Quapaw Tribe to Saracen Development LLC for a casino in Jefferson County.

"It has been 126 days since y'all approved my license," said John Berry, chairman of the board of the Downstream Development Authority. Berry also will serve on the Saracen Development board of directors. "Things are going very well." The company opened a building with some gambling machines while constructing its casino.

Berry said he wants the commission to transfer the casino license because "we want to be in line with the other gaming facilities" at Southland Racing Casino in West Memphis and Oaklawn Racing Casino Resort in Hot Springs.

"Currently, the Downstream Development Authority is based in Oklahoma. We want to have a domiciled LLC within the state of Arkansas. That's what this does," he said. "It gives a better delineation with a tribal facility, which has issues of sovereignty and tribal law."

Freeland said Jefferson County's County Judge Gerald Robinson and Pine Bluff Mayor Shirley Washington submitted letters supporting the transfer.

Metro on 10/18/2019

Print Headline: Racing panel to wait out lawsuits

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