Gulfside Casino Partnership Files Lawsuit Over Arkansas License Decision

Mississippi casino moguls Rick Carter and Terry Green believe their Gulfside Casino proposal got uncompetitively squeezed out of Pope County, Arkansas. (Image: courtesy of River Valley Casino Resort)

Gulfside Casino Partnership filed a lawsuit on Tuesday in the Circuit Court of Pulaski County, Arkansas, in an attempt to invalidate the Pope County casino license awarded to Cherokee Nation Entertainment (CNE) last week by the Arkansas Racing Commission (ARC). 

This marks the third time that this casino license has been the subject of a lawsuit over the past six years, as the battle for a casino in Pope County has now seen a license awarded on three different occasions.

Gulfside: Exclusivity Agreement Unfairly Locked Out Competition

According to the lawsuit, Gulfside is arguing that the letters of support issued by local leaders on behalf of the CNE proposal were “coercively issued.” The lawsuit names the Arkansas Racing Commission, Cherokee Nation Businesses (CNB), Cherokee Nation Entertainment, the Pope County Quorum Court and Pope County Judge Ben Cross as defendants. 

Gulfside contends that an Economic Development Agreement first presented to Pope County officials by CNE in 2019 effectively circumvented “the language and the spirit of Amendment 100,” the change to the Arkansas constitution that allowed for casino gambling in the state. That Amendment requires that any applicant for a casino license must receive a letter of support from the county judge or quorum court.

A rendering of the proposed $405 million casino resort that Gulfside Casino isn’t being allowed to build. (Image: courtesy of River Valley Casino Resort.

Gulfside has proposed a $405 million development dubbed the River Valley Casino Resort in Russellville, Arkansas.

According to Gulfside, the Economic Development Agreement (EDA) submitted by CNE required both Judge Cross and the quorum court to exclusively support its project. That led to a situation where if Pope County officials supported another project as well, they could potentially be in breach of that EDA, and would be “in jeopardy of receiving nothing if CNB or its designee is ultimately awarded the license.”

Amendment 100 does not limit county officials from issuing letters of support for multiple candidates. Gulfside attempted to get such a letter from the Pope County Quorum Court on June 6. However, the court voted 7-5 against such a resolution, effectively ending any opposition to CNE’s casino proposal. 

Gulfside still attempted to submit an application to the ARC, but the commission rejected it on the grounds that it didn’t include the required support from county officials. The seven commissioners ultimately awarded the CNE proposal – which would create Legends Resort & Casino Arkansas in Russellville north of Interstate 40 – 651 out of a possible 700 points in its evaluation before granting CNE the sole Pope County casino license. 

In the lawsuit, Gulfside says that the decision not to issue it a letter of support prevented the ARC from doing its job.

“The letter of support is simply an eligibility criteria for a casino applicant, but Judge Cross and the Quorum Court have used their power to issue a letter of support as a way to thwart the Racing Commission’s ultimate authority to select and award the casino gaming license,” the lawsuit states.

Churchill Downs: Officials Said Not to Waste Our Time

Gulfside isn’t the only potential applicant who ran afoul of the Cherokee agreement with Pope County officials. On June 11, Jason Sauer, senior vice president of corporate development for Churchill Downs, sent a letter to the ARC saying that Judge Cross told the company in November that there was no point in them submitting a proposal.

“Judge Executive Ben Cross provided immediately and explicit clarity at our first in-person meeting on November 30, 2023, that we were “wasting [our] time,” as neither he nor a majority of the Quorum Court was willing to consider any applicant other than the Cherokee regardless of what another applicant or proposal could bring to Pope County,” the letter reads. “This should come as no surprise, as he has made effectively the same statement countless times in public and in the media.”

Attorney Lucas Rowan, who is among the lawyers representing Gulfside in the lawsuit, referenced Churchill Downs’ struggles in a statement.

“The exclusive 2019 agreement between the Cherokees and Pope County leadership blocked consideration of Gulfside Casino Partnership, Churchill Downs or any other potential applicant,” Rowan said, via the Arkansas Advocate. “The unlawful agreement deprived Pope County officials of their constitutional power to give support to other operators and from acting in the best interests of the citizens of Pope County and Arkansas.”

Meanwhile, CNE plans to move forward with its plans to finally develop a Pope County casino. 

“This unfortunate round of litigation from a rejected operator only stands to further delay the economic benefits and jobs associated with the state’s fourth casino license approved by voters in 2018,” CNE legal counsel Bart Calhoun told the Arkansas Advocate. “We will continue to evaluate and defend Cherokee Nation Entertainment’s position as the casino license holder and as Pope County’s operator of choice.”

The CNE proposal would create a $300 million complex that would include a 200-room hotel tower, a conference center, an outdoor concert venue, and a water park, along with a 50,000 square-foot gaming floor.