UPDATED: Arkansas Supreme Court upholds lower court ruling nullifying Pope County casino license

This story was updated at 6:43 p.m. on Monday, October 30, 2023.

The Arkansas Supreme Court on Thursday upheld a lower court ruling that stripped a Pope County casino license from a Cherokee Nation Businesses partnership.

The decision likely reopens the license application process.

In response to the decision, Pope County Judge Ben Cross sent the Arkansas Racing Commission a letter in support of CNB, as required by Amendment 100 for casino license applicants.

“It is my sincere hope the Commission views this as a measure of quick resolve and finalizes what has been an exhausting process to the citizens of Pope County,” Cross said in a statement Monday.

With two of the seven justices dissenting, the high court agreed with Pulaski County Circuit Judge Tim Fox’s ruling in January that a license awarded by the Arkansas Racing Commission to Legends Resort and Casino and Cherokee Nation Businesses “a legal nullity, void and of no effect.”

Gulfside Casino Partnership, a competing applicant for the Pope County casino license, had sued the racing commission and the licensees, arguing that the commission acted unconstitutionally. Fox declared the commission’s actions a violation of Amendment 100 to the state constitution, which created Arkansas’ casino licensing system. The Supreme Court’s majority agreed.

“Nowhere in the text does [the amendment] allow for joint or dual licensing to more than one applicant,” Associate Justice Cody Hiland wrote in the majority opinion. “The circuit court was correct in finding that the award of the Pope County casino license to both Legends and CNB violated amendment 100.”

The high court also agreed with Fox’s assessment that Legends’ corporate structure meant that it did not have prior experience operating a casino, as required by Amendment 100.

Associate Justices Rhonda Wood, Courtney Rae Hudson and Barbara Webb and Special Justice Bryan McKinney joined with Hiland in the majority. Associate Justices Karen Baker and Shawn Womack dissented, and Chief Justice John Dan Kemp did not participate.

The prospective Pope County casino is one of four created by Amendment 100, which Arkansas voters approved in 2018. The amendment authorized two casinos at the existing racetracks at Oaklawn in Hot Springs and Southland in West Memphis as well as one new casino in both Jefferson and Pope counties.

The Quapaw Nation obtained the requisite support from local officials around Pine Bluff and secured a license to build Saracen Casino Resort, which opened in 2020.

Meanwhile, the Arkansas Racing Commission rejected the five applicants for the Pope County casino license, including Gulfside and CNB, in 2019 after none of them received letters of support from Pope County officials. The commission eventually awarded the license to Gulfside Casino Partnership in 2020, sparking a yearslong debate between Gulfside and Legends.

The Arkansas Supreme Court ruled in 2021 that Gulfside’s letter of support from the previous Pope County judge was invalid because he was not in office at the time of the application.

The racing commission then voided Gulfside’s casino license and issued one to Legends and CNB. Gulfside proceeded to file its complaint with Pulaski County Circuit Court.

Legends purchased more than 325 acres of land for the casino in Russellville, but progress on the $225 million project has been stalled due to the legal delays.

Gulfside is “ecstatic” about the high court’s ruling, its attorney Casey Castleberry said in a statement Thursday.

“Just as the Racing Commission selected our superior application in 2020 in a head-to-head with Legends, we look forward to demonstrating again to county leaders and residents how our proposed world-class resort will benefit them and the entire state,” Castleberry said.

CEO Chuck Garrett of CNB said in a statement that the organization is “disappointed” by the ruling but will “remain committed to earning the privilege” of the casino operating license, pending further guidance from the racing commission and the Arkansas Attorney General’s Office.

“We are fully committed to moving forward and working with local and state officials as we have been for the past five years to build Legends Resort & Casino and bring the much-needed economic growth the community and state deserves,” Garrett said.

On Monday, Garrett said CNB is “honored to have the express and exclusive support” of the Pope County judge in light of his letter of support for the organization’s efforts. Castleberry reiterated that Gulfside hopes to prove to Pope County officials that its “superior proposal is a better way to win for Russellville, Pope County and the entire state.”

In their dissents from the Supreme Court’s majority opinion, Baker and Womack cited — as they have in other recent rulings — sovereign immunity, the principle that the Arkansas Constitution prohibits lawsuits against the state.

Quoting herself from a 2018 case, Baker noted “the court held that ‘never means never,’ therefore … suit is barred” because the Article 5, Section 20 of the constitution doesn’t identify any exceptions to sovereign immunity.

The racing commission had argued that sovereign immunity barred Gulfside’s suit.

Womack wrote that Article 5 “requires this court to reverse and dismiss this case.”

In the majority opinion, Hiland cited a 2022 ruling that said, “A lawsuit against the State seeking declaratory relief may survive a sovereign-immunity challenge only if the State acted illegally, unconstitutionally or ultra vires [beyond one’s legal power or authority].”