Federal Court Upholds Arkansas Referendum, Impacting Future Casino Licensing Opportunities in Russellville

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Another court decision has gone against a casino in Pope County.
A federal judge says an Arkansas referendum in 2024 was legitimate.
The Cherokee Nation could appeal the ruling.

A recent ruling by a federal judge confirmed that a statewide amendment to the Arkansas Constitution, approved by voters last November, is legally binding. This change effectively bars a commercial gaming company from claiming rights under the United States Constitution, particularly in relation to the Legends Casino project in Russellville.

Image by succo from Pixabay

In November, Arkansas voters overwhelmingly supported “Issue 2” with a 56% majority. This amendment mandated that the Arkansas Racing Commission (ARC) may only consider casino licenses in counties that passed local referendums allowing for gambling activities—including slot machines, table games, and sports betting. The amendment also cancelled the gaming license previously granted to Cherokee Nation Entertainment for the Legends Resort & Casino.

In response to the amendment, Cherokee Nation Entertainment, a subsidiary of the Cherokee Nation of Oklahoma, lodged a lawsuit against the state and ARC, arguing that the amendment infringed upon their constitutional rights. The company had initially planned a substantial $325 million investment in Russellville.

In late August, Judge D.P. Marshall Jr. of Arkansas’ Eastern District Court sided with the state’s position, dismissing the claims made by the Cherokee Nation. The judge stated that “Issue 2 does not violate the Cherokee Nation’s rights, nor does it harm any agreements previously made regarding local economic development.

The judgement reiterated that the amendment did not specifically target any individual or group, asserting that it merely defined the permitee nature for casino licenses in counties based on community support. Marshall noted that Issue 2’s provisions did not amount to punitive action against any party, including the Cherokees.

Background to the Ruling

The push for casino gambling in Arkansas is not a recent development. During the 2018 elections, voters sanctioned a casino presence across several counties: Pope, Crittenden, Garland, and Jefferson. However, it’s notable that Pope County was among the few that did not receive majority support for casino initiatives.

For reference, Jefferson County collaborated with the Quapaw Nation of Oklahoma to establish the Saracen Casino Resort in Pine Bluff, while the Crittenden and Garland County racetracks transformed into full-scale casinos—Southland and Oaklawn—respectively.

The competitive landscape in Pope County was further complicated by a bid from the Gulfside Casino Partnership, which sought approval from a biased ARC commissioner concerning casino proposals. Despite the emerging complexities, the Arkansas Attorney General’s office ultimately validated the Cherokee Nation’s bid, which had backing from local government leaders. The ongoing legal disputes between the Cherokee and rival factions, notably the Choctaw Nation, have highlighted the contentious and competitive dynamics underpinning the casino licensing process.

Financial Stakes

The Cherokee Nation has reportedly invested around $60 million in the legal battles surrounding casino rights, encompassing two failed referendum campaigns. Despite recent setbacks, officials have expressed a determination to reassess their legal standing and possible paths forward.

“We are reviewing all aspects of the judge’s ruling and considering next steps in the legal process,” said a spokesperson for Cherokee Nation Businesses.

This decision emphasizes the ongoing evolution of casino legislation in Arkansas and sets a precedent for future gaming license considerations, particularly in terms of community involvement and constitutional guidelines. For residents of Russellville and surrounding areas, the future of the casino initiative remains uncertain as further appeals and legal adjustments unfold.

Summary

The recent federal court decision affirming the validity of Arkansas’ Issue 2 highlights the complex interplay between local voting, community sentiments, and state-level gambling laws. It underscores the growing challenges that casinos face in securing licenses amidst evolving legal landscapes and competing interests. The Cherokee Nation’s journey in this context not only reflects their efforts to establish a foothold in the gambling market but also emphasizes the significance of public opinion in shaping legal outcomes.

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