Anti-casino amendment in Arkansas: Federal judge not to delay its implementation

Known as Issue 2, a majority of voters statewide approved a proposed constitutional amendment to repeal a Pope County casino license and require countywide elections for future casinos in the state. A majority of voters in seven counties rejected the amendment, including those in Pope County, according to complete but unofficial election results.

According to online court filings, U.S. District Judge D. P. Marshall Jr. denied Cherokee Nation Entertainment’s request for a temporary restraining order after a hearing Tuesday. A formal order was issued Wednesday afternoon, and the case will continue as the judge has called for briefs through November. The amendment was scheduled to take effect Nov. 13.

Cherokee Nation Entertainment, which was awarded the Pope County casino license in June by the Arkansas Racing Commission, sued the state of Arkansas last week after voters approved Issue 2.

The complaint filed Friday afternoon 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.

Cherokee Nation Businesses and Jennifer McGill, a registered voter in Pope County, are also listed as plaintiffs. The parties also challenged the constitutional amendment in court before the election, and the state Supreme Court ruled that votes cast on Issue 2 would count just days before early voting in the state began.

Plaintiffs filed an amended complaint on Tuesday, which added Gov. Sarah Huckabee Sanders and the seven members of the Arkansas Racing Commission in their official capacities as defendants. The ARC includes Alex Lieblong, Mark Lamberth, Steve Anthony, Denny East, Michael Post, Bo Hunter and Steve Landers.

Cherokee Nation Entertainment holds one of four casino licenses in the state that were established through Amendment 100 in 2018. Approved by voters, the amendment authorized two existing casinos 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.

Issue 2 was one of two ballot initiatives Arkansans could vote on in this year’s general election. It was championed by the ballot question committee Local Voters in Charge, which filed Tuesday to be intervenors in the lawsuit.

“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,” Attorney Elizabeth Robben Murray wrote for Local Voters in Charge.

“Indeed, 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 continued. “This is the nature of the industry. CNE has no protected rights related to its license, and in turn, no legal basis to complain.”

Ryan Hale, a senior assistant attorney general for the state, filed a brief on Monday that asked the judge to dismiss Cherokee Nation Entertainment’s request for a temporary restraining order and preliminary injunction. 

Hale argued that lawsuits against the state in federal court are barred by the Eleventh Amendment of the U.S. Constitution and “plaintiffs fail to chin the bar in showing that they are likely to succeed on the merits of any of their claims” under U.S. 8th Circuit Court of Appeals precedent.

“Plaintiffs cannot show that an injunction is in the public interest,” Hale wrote. “To that end, the public has spoken on this issue. Arkansans decisively voted to revoke the Pope County casino license and return control to local voters.”