Arkansas: Pope County casino battle moves to federal court amid allegations of collusion

The contentious battle over a casino license in Pope County, Arkansas, has escalated to federal court. This follows last month's decision by the Arkansas Racing Commission (ARC) to name Cherokee Nation Entertainment, an Oklahoma-based entity, as the sole qualified bidder for the coveted license. The Cherokee Nation plans to develop the $300 million Legends Resort & Casino in Russellville.

Mississippi-based Gulfside Casino Partnership, the unsuccessful bidder, alleges that Pope County officials manipulated the bidding process to favor the Cherokee Nation.

Gulfside has filed a lawsuit in Arkansas’ Pulaski County Circuit Court, accusing Pope County Judge Ben Cross and the Pope County Quorum Court of ensuring their application was incomplete by not providing the required letters of support or resolutions from local officials.

Following Gulfside's legal action, attorneys representing Cherokee Nation Entertainment requested that the case be moved to federal court, arguing that it meets the criteria for federal jurisdiction due to the monetary stakes and the involvement of parties from different states. The case has been accepted by Arkansas’ Eastern District federal court and assigned to District Judge Lee Rudofsky.

In recent court documents, Gulfside claims to have evidence that Judge Cross and the quorum court colluded to guarantee only the Cherokee Nation's proposal would be considered by the ARC.

According to the 2018 ballot referendum authorizing new casinos in Jefferson and Pope counties, applicants must present a support letter from the county judge or a resolution from the county quorum court. Gulfside attorneys argue in the lawsuit that the 2018 constitutional amendment didn’t limit county judges or quorum courts to lending only a single support letter or resolution. 

Gulfside's lawsuit also includes exhibits from Churchill Downs Inc. (CDI), a Kentucky-based horse racetrack and casino operator that had expressed interest in the Pope County license. 

In a letter to ARC Chair Alex Lieblong, CDI's Corporate Development Senior VP Jason Sauer recounts a meeting with Judge Cross, where Cross allegedly stated that CDI was "wasting [their] time" because neither he nor a majority of the quorum court would consider any applicant other than the Cherokee Nation.

Sauer wrote: “While CDI enjoyed productive and cordial engagement with several members of the Pope County Quorum Court, Judge Ben Cross provided immediate and explicit clarity at our first in-person meeting on Nov. 30, 2023, that we were ‘wasting [our] time.’”

Sauer further noted that Cross indicated an unwillingness to consider any other proposals, regardless of potential benefits to Pope County.