Federal Judge Dismisses Attempt to Block Arkansas Casino Referendum Outcome

Posted on: November 13, 2024, 04:22h. 

Last updated on: November 13, 2024, 04:22h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

A federal judge in Arkansas has dismissed a petition to delay the implementation of a statewide constitutional ballot referendum passed last week that repealed a casino license that had been issued for a gaming development in Pope County.

Arkansas Pope County casino license Russellville
A federal judge has allowed the outcome of Issue 2 in Arkansas to take effect. The 2024 statewide referendum repealed a gaming license for Pope County. (Image: Casino.org)

On Wednesday, Judge D.P. Marshall Jr. in Arkansas’ Eastern District Court denied a temporary restraining order and preliminary injunction request from Cherokee Nation Entertainment (CNE), a fully owned subsidiary of the Cherokee Nation of Oklahoma.

The tribe challenged Issue 2 on allegations that the constitutional amendment unconstitutionally violated its rights under the due process clause, contract clause, equal protection clause, and takings clause of the U.S. Constitution. Marshall refuted the Cherokees’ claims and denied the motion without prejudice.

The Arkansas constitutional amendment that passed last week with almost 56% support became effective today, Nov. 13.

Casino License Repealed

Issue 2 asked voters if they think the Arkansas Racing Commission (ARC) should only be allowed to issue casino licenses to counties where local referendums in support of slot machines, table games, and sports betting are held. When state voters in 2018 authorized casinos in the counties of Pope, Crittenden, Garland, and Jefferson, Pope was one of only 11 counties among the 75 in Arkansas that voted against the gambling question.

Issue 2, the so-called Local Voters in Charge referendum, was bankrolled by the Choctaw Nation. The rival tribe to the Cherokees funded the referendum campaign in hopes of preventing further competition for its tribal casinos in Eastern Oklahoma.

Issue 2 removed Pope County as a permissible host locale for a commercial casino and rescinded the county gaming license that was awarded to CNE this past June.

“Like a liquor-license holder, CNE knowingly and voluntarily applied for and took the casino license with its concomitant perils, including the right of the people to take it away with or without notice,” argued attorney Elizabeth Robben Murray on behalf of the Local Voters in Charge campaign, which motioned to intervene in the case.

The ARC Casino Gaming Rules expressly warn that the license is ‘a revocable privilege’ and ‘no holder … shall be deemed to have acquired any vested rights therein or thereunder,'” Murray added. “This is the nature of the industry. CNE has no protected rights related to its license, and in turn, no legal basis to complain.”

CNE had proposed investing $300 million in Russellville to build Legends Resort & Casino. The project was forecasted to deliver the region a 10-year economic impact of more than $5 billion, employ over 2,000 people, and direct almost $40 million through an Economic Development Agreement with Pope County to benefit the local government, community organizations, first responders, scholarship programs, and art associations.

Case Continued

Marshall’s ruling against the motion “without prejudice” allows the Cherokee lawsuit to continue.

The judge ordered CNE to file its brief in response to Local Voters in Charge seeking to become an intervenor by Nov. 19. Local Voters in Charge will then have until Nov. 22 to reply.

Marshall also ordered that CNE submit a proposed schedule for expedited discovery and a trial on injunctive relief and its merits by Nov. 15. The judge said a trial will be set by a separate notice at a later time.