The Pope County casino license holder sued the state of Arkansas Friday after voters approved a statewide ballot initiative that repealed the license and requires countywide elections for future casinos in the state. 

Plaintiffs have asked a federal judge to declare the amendment unconstitutional and issue a temporary restraining order and preliminary injunction to prevent the amendment from taking effect on Nov. 13.

Arkansans supported the constitutional amendment, known as Issue 2, on Tuesday 637,110 to 505,038, according to complete but unofficial results from the secretary of state’s office. The majority of voters in seven counties, including Pope County, rejected the proposed amendment.

Cherokee Nation Entertainment, which was awarded the license in June by the Arkansas Racing Commission, filed the complaint in the U.S. District Court for the Eastern District of Arkansas against the State of Arkansas. 

Additional plaintiffs include Cherokee Nation Businesses and Jennifer McGill, a registered voter in Pope County. 

Those involved also challenged the constitutional amendment in court before the election as the Arkansas Canvassing Compliance Committee, but the state Supreme Court ruled that votes cast on Issue 2 would count just days before early voting in the state began.

Cherokee Nation Entertainment’s legal counsel, Bart Calhoun, issued a statement Friday saying plaintiffs are initiating litigation on multiple grounds and pursuing a temporary restraining order “to preserve our client’s rights and investments throughout the legal proceedings.”

“Cherokee Nation Entertainment is firmly committed to protecting its constitutional rights, defending its lawfully issued casino license, and safeguarding the substantial investments it made in good faith based on the establishment of the Pope County casino license under Amendment 100 in 2018,” Calhoun said in a statement. “Amendment 104 undermines foundational legal rights and stands to interfere with several binding contractual obligations.”

24.11.08 Cherokee Nation Entertainment Complaint

Approved by Arkansas voters in 2018, Amendment 100 authorized four casinos in the state — the two existing in Crittenden and Garland counties (Southland and Oaklawn) and two new ones in Jefferson and Pope counties. 

While the other three casinos have been operating with no issues, issuance of the Pope County casino license has been tied up in litigation for years. Most recently, Gulfside Casino Partnership, another license applicant, filed a lawsuit in July challenging the issuance of the license to CNE. That litigation is ongoing. 

The complaint filed Friday argues the new amendment “unconstitutionally violates” plaintiffs’ rights under the due process clause, the contract clause, the equal protection clause and the takings clause of the United States Constitution. 

“The Amendment and procedures by which it was approved have violated constitutional rights by failing to provide Plaintiffs and the electorate adequate notice and opportunity to be heard, improperly interfering with CNB and CNE’s contractual relationships, depriving Plaintiffs of their constitutionally protected interests, and arbitrarily treating CNB and CNE differently than all other Arkansas licenses,” the complaint states. 

Although a majority of Arkansas voters approved Issue 2 in Tuesday’s election, the complaint argues that voters were not properly informed of the effects of its passage because the proposed amendment did not disclose that it was revoking CNE’s casino gaming license.

“To put it simply, the voters had no idea, by looking at what was in front of them in the voting booth, that they were revoking CNE’s license or nullifying a government contract,” the complaints states.

CNE purchased 325 acres northeast of Russellville for the construction of Legends Resort & Casino, a 50,000-square-foot facility that will include 1,200 slot machines, a 200-room hotel, 15,000-square-foot multipurpose space and an outdoor concert venue that can seat 5,000.

The $300-million investment is expected to have a $5 billion economic impact on Arkansas during its first decade through the creation of thousands of jobs and tax revenue, according to a press release.

CNE also has a $38.8-million economic development agreement that will be distributed to Pope County. The agreement also calls for an annual $2.1 million contribution to a charitable foundation and the Russellville Economic Development Alliance, according to the release.

Arkansans support anti-casino ballot measure that repeals license, requires future elections

The passage of Issue 2 interferes with these contracts and is a violation of the Constitution’s contract clause, according to court documents.

“The amendment completely nullifies, or at the very least substantially interferes with, the [Economic Development Agreement] with Pope County, along with other contracts with vendors, contractors, architects, etc,” according to a brief in support filed Friday.

While the other casino licenses issued under Amendment 100 have remained valid through Issue 2, the brief argues that the Pope County license is being treated differently and therefore violates the equal protection clause. There is also no stated reason why the Pope County license should be revoked, while the other three can remain, the brief states.

“The amendment, if it was really about local control, could have either applied to all 75 counties or to 71. But revoking a casino license for a county that voted against the amendment, while leaving all other licenses untouched, does not serve any broad societal interest, nor can it be said that it was reasonable,” the brief states.

The legal documents further challenge the notion of “local control” stated by amendment supporters, noting that Issue 2 was backed by Local Voters in Charge, a ballot question committee that received financial support from Choctaw Nation, which operates a casino just across the state border in Pocola, Oklahoma.

Regarding the takings clause, plaintiffs’ legal counsel argues that Issue 2 illegally takes property from Cherokee Nation Entertainment by voiding its casino license. Additionally, Amendment 100, the casino license and CNE’s contract with Pope County all create property rights, according to the brief.

“The challenged portions of the amendment strip away a billion-dollar license that CNB and CNE have spent five years pursuing, obtaining and maintaining,” the brief in support states. “In reliance upon the license existing, CNB and CNE executed multimillion-dollar contracts with Pope County and other vendors and purchased substantial amounts of land in Pope County.”

Plaintiffs are requesting compensation for the taking of property and that the amendment be permanently enjoined.