Arkansas Judge Rejects Cherokee Nation's Request to Halt New Casino Law

On November 5, Arkansas voters decisively ed Issue 2, a ballot initiative that prevents Cherokee Nation Businesses (CNB) from developing a casino in Pope County. ing by a margin of 56% to 44%, the initiative not only stripped CNB of its previously awarded casino license but also mandated that any future casino development proposals undergo voter approval before advancing.

This measure officially took effect on November 13, despite a last-minute legal challenge from CNB.

Following the election result, CNB promptly filed a lawsuit on November 8 in federal court, alleging constitutional violations. The suit argued that Issue 2 infringed on CNB’s constitutional protections under the Fifth and Fourteenth Amendments, which prohibit government seizure of property without due process. The complaint also invoked the U.S. Constitution’s Contract Clause, contending that the measure improperly interferes with CNB’s contractual rights. CNB sought an emergency restraining order and preliminary injunction to prevent the measure from taking effect. However, the case faced a setback when U.S. District Court Judge D.P. Marshall Jr. declined the request for an injunction in a ruling issued on November 13.

Legal Battle Over Pope County Casino License Continues

The lawsuit, which remains active despite the denial of an injunction, will proceed to trial. Judge Marshall’s order scheduled filings through the end of the month, with a trial date expected to be set thereafter. Importantly, CNB’s amended complaint, filed the day before the court hearing, had included Arkansas Governor Sarah Huckabee Sanders and the Arkansas Racing Commission (ARC) as defendants.

However, Marshall dismissed these parties from the suit, noting that Sanders opposed Issue 2 and that the ARC had unanimously awarded the casino license to CNB in June.

The Cherokee Nation had planned to establish the Pope County casino near Russellville, one of four locations allowed to house casinos under a 2018 state amendment legalizing gambling at specific sites. Casinos have already opened in three other designated areas. This revocation would be the first such instance following Arkansas’s limited legalization of casino gambling six years ago.

In the lead-up to the November 13 court hearing, Local Voters in Charge (LVC), a group funded by the Choctaw Nation of Oklahoma, filed a motion to intervene in of Issue 2. LVC, the primary proponent of Issue 2, received substantial financial backing from the Choctaw Nation, which invested millions in campaigning for the initiative. The Choctaw Nation operates multiple casinos in Oklahoma and voiced concerns that a Pope County casino would siphon business from their existing facilities near the Arkansas border.

Representing LVC, attorney Elizabeth Robben Murray argued that CNB accepted the license fully aware of the state’s rules on revocability. According to Murray, “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.” This statement reflects the regulatory framework in Arkansas, where licenses are classified as privileges rather than guaranteed rights.

Costly Campaign and Legal Implications

The Cherokee and Choctaw Nations invested significant resources into opposing and ing Issue 2, respectively. Combined, the two tribal nations contributed over $30 million to their campaigns, making it one of the most expensive ballot measure battles in Arkansas’s history. Last month, the Arkansas Supreme Court rejected an earlier attempt by the Cherokee Nation to have Issue 2 disqualified before the election, allowing the measure to proceed to a public vote.

Despite the setback, CNB remains committed to its legal battle against the measure, with spokesperson Allison Burum stating,“We look forward to presenting the merits of our case to the court as the legal process moves forward.” Meanwhile, Arkansas Attorney General Tim Griffin expressed his for the judge’s decision, emphasizing the state’s commitment to upholding the will of the voters. In his statement, Griffin remarked, “We appreciate the ruling and will continue to vigorously defend the state in this case.”

As Issue 2 officially took effect on November 13 under the new designation of Amendment 104, the debate over its constitutionality is far from over. LVC expressed confidence in the amendment, asserting in a statement, “As Issue 2 took full effect today as Amendment 104, we trust in the validity of Amendment 104, and in the judicial process for a fair outcome for the voters of Arkansas.”

Judge Marshall is expected to determine a trial date in an order, signaling a continued legal examination of Issue 2 and its implications for CNB’s casino plans in Arkansas.

Source:

”Federal hearing held over Arkansas amendment that revoked casino license”, CDC Gaming. November 12, 2024.

”Arkansas’ Issue 2 takes effect after unsuccessful legal challenge”, iGamingBusiness. November 14, 2024.