Magazine October 2019

Pope County Casino Plans Mired in Legal Woes

Pope

by Jeremy Peppas

A proposed casino in Pope County has caught the attention of Gov. Asa Hutchinson and lawyers, lots of them, as local political leaders maneuver to bring gambling to the Arkansas River Valley.

The first step was Aug. 13 when the quorum court voted to allow Legends Resort and Casino to operate in the county. Cherokee Nation Businesses immediately rolled out a splashy website, plans for property just outside city limits off Hob Nob Road near Interstate 40 and held a Chamber of Commerce ribbon-cutting for office space in downtown Russellville on Sept. 5.

Legends is the conglomerate founded by Jerry Jones, formerly of Little Rock, and now better known as the multi-billionaire owner of the Dallas Cowboys. Jones, of course, also has a significant connection to the River Valley in his wife Gene, who is the daughter of the late John Ed Chambers of Danville. One of the most influential families in Arkansas, the Chamberses have an eponymous bank with 18 branches across the western half of the state along with other real estate holdings and investments. John Ed Chambers III, Gene’s brother, serves as the bank’s CEO. The family has also made several philanthropic moves. Among them is Danville’s John Ed Chambers Memorial Hospital.

So, perhaps, it wasn’t a surprise that Legends was first out of the gate with a casino plan.

Being first also meant catching legal attention, as Russellville’s James Knight filed a lawsuit mere days later on Aug. 16 against the Arkansas Racing Commission, the organization that approves casinos in the state, to block the Pope County move, alleging illegal public meetings between quorum court members to solidify support for Legends.

A hearing is set for late September, as competing casino interests also contend they have been wronged. Pope County Judge Ben Cross is hopeful the legal wrangling will come to a close.

“To those in support of a casino resort, the facts are clear, an economic benefit to the community and region will be realized and forever change the dynamic of the River Valley,” Cross wrote in an email. “Between job creation, tax revenue and the influx of supporting businesses (hotels, sports complexes, restaurants, etc.), there will be opportunities for every spectrum of entrepreneurship to thrive.”

Cross added that Legends is estimating the project will mean, “over $10 billion dollars in economic development over the next 20 years in the geographical area surrounding their proposed resort casino.”

It would also mean a significant influx to the tax rolls.

“The actual tax revenues to local government are projected to be approximately $4 to $6 million a year in new revenue,” Cross added.

With numbers like that, and with legal challenges to the quorum court’s moves, it wasn’t a surprise Russellville’s city council jumped into the fray.

The body proposed annexing the property that Legends is considering for its location and also forming a committee to evaluate casino applications from other operators, namely Choctaw Nation and Warner Gaming.

The council would then be able to approve a casino application, forwarding it to the racing commission for final approval from the state.

That’s when the governor’s office got involved and Hutchinson issued a statement about the amendment passed last year that legalized the casinos. It said essentially: Not so fast, my friends.

“I understand Russellville is considering opening up the application process further. In my view, this approach is consistent with Amendment 100,” Hutchinson said in the statement. “But any new applicant within Russellville will have to ultimately have the approval of the county quorum court or county judge.”

Hutchinson added, “The window for applications to be submitted to the racing commission remains open, and the commission rules will guide the final selection of a license for Pope County.”

“The county is the gatekeeper of the process, so I think all the city council is trying to do here is demonstrate to the citizens that there has been an open, transparent process in vetting these applications.” — Mayor Richard Harris

The governor’s announcement drew an immediate reaction from Russellville Mayor Richard Harris.

“The county is the gatekeeper of the process, so I think all the city council is trying to do here is demonstrate to the citizens that there has been an open, transparent process in vetting these applications,” Harris told Russellville’s The Courier. “If the vetting process comes out and shows that another operator can offer the community more than what’s currently provided, then it’ll be up to the citizens of the community whether they want to challenge the court and the judge to consider this alternative if another alternative is selected. But at the end of the day, it is up to the quorum court and the county judge. If they choose to ignore the results, assuming they come out differently than what they chose, they certainly have a right to do so. But the citizens also have a right to ask why.”

Described as temporary, the Community Gaming Evaluation Committee was formed on Sept. 5 and almost immediately sprung into action with its first meeting on Sept. 12, at which it began the process to issue a request for proposals requesting that casino operators run future applications for a license through it.

Committee members include: former state legislator Nathan George, Russellville schools superintendent Mark Gotcher, Arkansas Tech University’s Mary Gunter, businessman Bart Langley, quorum court member Bill Sparks and city council member Eric Westcott. One position on the committee remains vacant.

The committee’s deadline to provide a report to the city council is Nov. 5 while the racing commission has a Nov. 18 deadline for new casino applications.

While that is ongoing, the proposed annexation of proposed casino property was tabled at its Sept. 19 meeting. If annexation is to go forward, it would almost certainly bring another legal challenge. But the council did pass a resolution prohibiting the use of nondisclosure agreements in the application process.

“Pope County did not have a say in being selected for a casino, but the constitution now allows for such, and we are just trying to make the best of a difficult position,” Cross tells Arkansas Money & Politics. “I would have to compare it to the medical marijuana amendment, which just as with the casino amendment, Pope County voters soundly rejected as well. However, the state has issued a license for a marijuana dispensary in our community, and as much as we don’t like the thought of selling federally illegal controlled substances, it is constitutionally allowed now and is a reality.”

He adds, “I like to compare the fact that at least the issue of marijuana has federal law to back up the premise of it being illegal, while the casino amendment allows factually, a legal basis to operate as any other business in Arkansas.”

And while a business, the proposed casino would be a big business, as the resort is expected to cost $225 million to build and would include a 10,000 square feet of conference center space, 50,000 square feet for gambling that would include 32 tables for games and 1,200 slot machines, a 200-room hotel, along with a sports book and multiple restaurants on the inside.

Outside would be a water park, a music venue with some 5,000 seats and an RV park with 100 slots for RVs.

Once approved, Legends estimates the project would take 18 months to build.

“Once all litigation has been settled, and the racing commission has issued a license to operate to a vendor,” Cross says, “you will see construction within 90 days and business operations begin within 24 months.”

Cross was a little less optimistic, but if opened, the Pope County casino would be the state’s fourth and join Pine Bluff’s new casino (for which ground has been broken) and new full-fledged casinos and expansions at the race tracks in Hot Springs and West Memphis. With new construction and renovation to existing buildings, the three casinos come with a price tag of $700 million.