Supreme Court intervenes in Sioux City casino case

Updated 9:48 am, Friday, December 20, 2013

 

DES MOINES, Iowa (AP) — An Iowa Supreme Court justice has given hope to the builders of the Hard Rock Hotel & Casino in Sioux City that they might not have to stop construction after spending $44 million on the half completed project.

 

Justice Brent Appel on Thursday granted an emergency stay of Polk County District Court Judge Robert Hanson's Dec. 10 ruling suspending the Hard Rock Hotel & Casino gambling license, the Sioux City Journal (http://bit.ly/1i7Du2E ) reported.

 

Hanson suspended the license as he ruled on a lawsuit challenging the Iowa Racing and Gaming Commission's April decision, which gave Hard Rock casino owners a gambling license instead of Penn National Gaming, the owner of the Argosy riverboat casino in Sioux City.

 

The commission decided in June 2012 to take bids for a land casino after growing frustrated when Penn National couldn't reach a long-term contract with a local nonprofit sponsor. Penn National has operated the Argosy riverboat casino since 2005 when it bought Argosy Gaming.

 

Iowa gambling laws require casino operators to contract with nonprofit organizations and share profits with local community organizations.

 

Penn Nation eventually partnered with a nonprofit and submitted a bid for a new casino project.

The commission, however, voted in April to grant a new license to the Hard Rock project instead of Penn National's proposed project.

 

Penn National sued claiming the commission violated its own rules, Iowa law and Penn's constitutional rights during the bidding process for a new casino.

 

Hanson concluded that Penn National had the "substantial possibility" it would ultimately succeed in its lawsuit and issued a ruling that suspended the license issued to the Hard Rock casino.

 

That created huge issues for SCE Partners, the Hard Rock developers because they've already spent $44 million on the casino that is scheduled to open in January 2015. The city has already paid $5.5 million in promised tax financing for the project and has borrowed $22 million for parking and other infrastructure related to the casino project.

 

The commission and Hard Rock attorneys asked the Supreme Court to intervene in the case, saying Hanson's order jeopardizes financing for the $128.5 million project and millions of dollars in future casino revenues, as well as other economic benefits for the state and local community.

 

Penn National claimed its Argosy casino employs more than 300 people and generates $56 million in revenue a year and would incur "irreparable harm" unless the license for Hard Rock isn't suspended while its legal challenges are heard.

 

In its appeal, the commission counters that the Argosy faces no immediate injury because the commission has allowed the floating casino to continue to operate while construction continues on the Hard Rock casino.

 

Appel's order gave Penn National Gaming Co. until noon Tuesday to respond to the filings by the commission and SCE Partners.

 

One or more justices will then review the case and decide how to proceed.

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Information from: Sioux City Journal, http://www.siouxcityjournal.com