The fight over whether the land-based casino in Sioux City should be allowed to go ahead continued in Polk County District Court Thursday. The district court ruled in favor of the operators of the Belle of Sioux City riverboat casino blocking the new license, but the Iowa Supreme stayed that stay on the license and ordered the district court to make a decision on the issue now.
Attorney Guy Cook represents Sioux City Entertainment, which is building a Hard Rock Casino near the downtown area. Cook told the judge Belle officials gave up their chance to run the casino when they couldn’t get a new agreement with their nonprofit group. “We are here because of the breakdown in the relationship between the charity — the qualified sponsor organization — and the casino operator of the Belle,” Cook says.
The Iowa Racing and Gaming Association opened up the competition for the land-based casino license after the Belle operators couldn’t reach and agreement with the non-profit Missouri River Historical Development (MHHRD). “Belle of course was unhappy with the expiration of their agreement with the charity and unhappy that the IRGC did not choose them in the open competitive bidding process. And so they challenged in district court by filing what is called a petition for judicial review, agency action,” Cook says.
He says Sioux City Entertainment went ahead with their plans because they were legally granted a license for the land-based casino. Cook says if the judge agrees to uphold the stay on the license, SCE faces irreparable harm. “If the stay was entered here — or put another way not dissolved, the lender could call the default on the loan agreement, pull the funding. There’s not money to pay the contractors, people are out of work the financing is gone, the project collapses,” according to Cook.
Mark Weinhardt represented the Bell operators. He says SCE was aware that the Belle believed the license process was not legal and decided to take the risk. “They know when they are putting in the application that we have three times over challenged the legality of the very process by which they are able to participate,” Weinhardt says. “They decide not withstanding those challenges to participate in the process, so the go through the process.”
Weinhardt says SCE continued to work on the agreements to move the new casino forward even as the legal actions continued. “We’re frankly flummoxed that they would take any of those actions, but for a long time those actions are on paper, they are reversible. Until August when they start to do something of substance that would appear to be irreversible — which is they start to break ground,” according to Weinhardt.
He says the building on the new casino continued even after the original ruling stayed the license. Weinhardt says that was SCE’s strategy. “Interesting that we’re here talking about the gaming industry because they made a gamble, and here it is — that if they could start building and build as fast as they possibly could — they could show the judges pictures of what they’d built. And those pictures would cause that judge or judges to say ‘that’s a lot of work, I’d better not mess with that,” Weinhardt says.
The arguments before judge Eliza Ovrum took over three hours. The lawyers have to file written information on those arguments by February fifth. The Iowa Supreme Court has given Overum until February 15th to rule on whether to stay the license until the issue is worked out in court, or allow SCE to continue work.