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

LITTLE ROCK -- An Arizona gambling consultant issued a report this week naming a Cherokee Nation proposal for a casino in Pope County as the best pick for the state's last remaining casino license, upending a process in which the Arkansas Racing Commission initially signaled its preference for a Mississippi casino operator.

The Racing Commission will meet next week to determine how to award the Pope County casino license. At that meeting, the commissioners will not be bound by the report prepared for them by Jim Fox of Fox & Fox Consulting in Scottsdale, Ariz.

At an earlier meeting in June, a majority of the commissioners gave their highest marks to a proposal made by Gulfside Casino Partnership, which operates the Island View Casino Resort in Gulfport, Miss.

But Fox's report, prepared as part of a $150,000 consulting contract with the Racing Commission, said the proposal from Legends Resort & Casino LLC, a subsidiary of Cherokee Nation Businesses, was more deserving of the license.

Fox's report noted Cherokee Nation Businesses' experience in running gambling operations at its 10 Oklahoma properties, as well as its plans to build a $225 million casino in Pope County in less than two years without the need for outside financing.

Dustin McDaniel, an attorney for Cherokee Nation Businesses, released a statement in praise of the report on Wednesday.

"It is unfortunate that the Commissioners didn't have the benefit of access to this report prior to awarding scores to each applicant on June 18, but we will offer it as part of the record and hope that it is helpful when the Commission meets next," McDaniel said.

A spokesman for Gulfside declined to comment on the report Wednesday.

The issue of the Pope County casino license -- which was created in 2018 by a statewide vote to expand or permit casino gambling in four counties -- has been fraught with lawsuits over the bidding process and mixed support from local leaders.

All five applications for the Pope County casino license were rejected by the Racing Commission last year for failing to get the necessary endorsements from local leaders who were in office at the time the applications were made. After a circuit judge overturned the commission's requirement that endorsements be from current officials, Gulfside's application was reinstated with the support of local officials who left office in 2018.

Meanwhile, the Cherokees received the support of the Pope County Quorum Court in August and resubmitted their application.

County Judge Ben Cross said Wednesday that he felt "somewhat vindicated" by Fox's report, which aligned with the choice of the Quorum Court. Cross also wrote a letter to the commission on Wednesday asking the commissioners to make the report a part of the official record at their meeting next week.

"It is with all due respect, I request the Commission follow the clear and concise recommendation of their consultant and issue a gaming license to CNB Legends," Cross wrote in his letter to the commission.

In his report, Fox noted that the Cherokees' casino plan, along with a commitment of $38.8 million for economic development through an agreement with Pope County, would bring the total cost of their project to $263.8 million, higher than Gulfside's original proposed investment of $150 million to $190 million.

More recently, however, Gulfside's partners have publicly stated that they planned to increase their investment to $254 million. Gulfside's stated plans for the amount of hotel rooms, gambling space, slot machines and table games is also higher than the figures cited in Fox's report.

Fox did not respond to a request for comment Wednesday.

Developments since the commission's last meeting have brought scrutiny against both applicants for the Pope County license.

Shortly after the commission scored both applications on June 18 -- with Gulfside outscoring the Cherokees 637-572 -- McDaniel accused Commissioner Butch Rice of bias for giving Gulfside a 71-point difference over the Cherokees, more than the point differences in all the other commissioners' scores combined. Rice has denied any bias, and he said he gave Gulfside a higher score because its proposal calls for a larger casino with more potential tax revenue.

Still, the other members of the commission met again on June 23 and voted to find that Rice had been biased in his scoring. The commission has not determined how to resolve the scoring issue.

Gulfside then lobbed accusations of collusion after text messages between McDaniel and Commission Chairman Alex Lieblong were revealed through a public-records request by the Arkansas Democrat-Gazette. Lieblong, speaking through commission spokesman Scott Hardin, denied wrongdoing and said the texts were not collusive.

Hardin said that a date for the commission's next meeting has not been finalized, though it will occur next week.

"We do anticipate there will be clarity on the Pope County license following next week's meeting," Hardin said.

Fox, the author of the report that recommended the Cherokees' proposal, was hired by the commission in early 2019 to help the commission develop casino gambling rules and to advise the commission on supervising the full-fledged casinos once they open. His contract ended in June.

The commission has already granted full casino licenses to the Oaklawn and Southland racetracks, as well as a license to Saracen Development LLC, affiliated with the Quapaw Nation, to build a casino in Pine Bluff.

Information for this article was contributed by Michael R. Wickline and Jeannie Roberts of the Arkansas Democrat-Gazette.


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