Federal Court Upholds Arkansas Referendum Blocking Legends Casino in Russellville

A federal judge has ruled that a statewide amendment to the Arkansas Constitution that was enacted last November was lawful and did not infringe upon the constitutional rights of a commercial gaming firm.

The Arkansas Racing Commission (ARC) can only consider commercial casino licenses for counties where local referendums receive majority support for slot machines, table games, and sports betting, according to Issue 2, an amendment to the state constitution that voters approved last November with 56% of the vote.  The gambling license granted to Cherokee Nation Entertainment by ARC in 2024 was also revoked by Issue 2.  In Russellville, CNE had intended to construct the $325 million Legends Resort & Casino.

CNE, a division of Cherokee Nation Businesses, a commercial conglomerate owned by the Cherokee Nation of Oklahoma, filed a lawsuit against the Racing Commission and the state of Arkansas, claiming that Issue 2 infringed upon its constitutional rights.

Judge D.P. Marshall Jr. of Arkansas' Eastern District Court denied the Cherokees' arguments that Issue 2 "impermissibly" interfered with their previously signed Economic Development Agreement with Pope County, ruling in favor of the state in an order signed on August 28.  Marshall added that Issue 2 simply mentioned "any casino license issued for Pope County," not the Cherokees specifically, making CNE's argument that their "Bill of Attainder Clause" rights under the US Constitution were unfair.

“Even if [Issue 2] did single out CNE, it doesn’t punish the Cherokee under the historical test for a bill of attainder,” Marshall wrote.

Extended Backstory

Voters in Arkansas approved a casino in Pope, Crittenden, Garland, and Jefferson counties during the 2018 election.  Out of the 64 counties, Pope was one of just 11 that voted against bringing casinos to the Razorback State.

In Pine Bluff, Jefferson opened the Saracen Casino Resort in collaboration with the Quapaw Nation of Oklahoma.  Southland and Oaklawn, the racinos in Crittenden and Garland, became proper casinos.

Pope County was the only county to submit a competitive offer, as Gulfside Casino Partnership, a Mississippi-based company, applied to construct a casino in Russellville. The gaming license was shelved for years due to endless legal disputes that were started by ARC itself after it was discovered that one of the commissioners had been biased in how he graded the competing applications.

A further court challenge concerned whether the endorsement of a prior county judge for a casino held the same weight as that of the current judge, as well as how ARC qualified bids.  Judge Ben Cross of Pope County and a majority of the Pope County Quorum Court supported the Cherokees' offer, which was subsequently determined to be the sole qualified bid with the help of the Arkansas attorney general's office.

The Choctaw Nation, a rival Cherokee tribe, later provided funding for Issue 4, which revoked the Pope County license.  The Choctaws heavily depend on the northwest Arkansas market and run tribal casinos in Oklahoma, which is only across the state line.

$60 Million Loss

The Cherokees claim that the two referendum campaigns and the Arkansas casino dispute have cost them $60 million.  The Nation is not yet prepared to give up, but the investment appears to be a loser.

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