The Iowa Supreme Court recently denied the Belle of Sioux City’s request to review an Iowa Court of Appeals decision upholding previous rulings ultimately causing its Argosy Sioux City riverboat casino to close on July 30, 2014. Belle, owned by Penn National Gaming, had sued the IRGC over not allowing it to renew its license, instead awarding it to the Hard Rock Hotel & Casino which opened in downtown Sioux City on August 1, 2014.
However, other legal issues rose from Belle’s long-running conflict with its former nonprofit partner, Missouri River Historical Development, which shared Woodbury County’s gambling license with Belle. Open cases include Penn National’s 2012 lawsuit against MRHD, claiming MRHD planned to replace the Argosy with another operator even before their 20-year contract expired in July 2012. MRHD and Penn National disagreed over a long-term contract extension that would have included a land-based casino with Penn National. As a result, the IRGC, in an unprecedented move, made the county license available and accepted proposals for a land-based casino.
MRHD denied the charges and countersued, claiming Penn National sent letters threatening legal action against any operators who might have considered partnering with MRHD. The nonprofit also claimed Penn National’s actions kept it from negotiating a more lucrative land-based casino agreement. Both sides are asking for damages in their claims.
Also to be determined is what to do with the nearly $1.8 million in revenue-sharing payments Belle withheld from MRHD in the casino’s last year of operation, starting in June 2013—following the IRGC’s 3-2 vote to award the land-based license to MRHD and its new partner, the Hard Rock operator SCE Partners. Iowa law requires casino operators to partner with licensed gaming nonprofit organizations like MRHD which collect and distribute 3 percent of the casino’s adjusted gross revenues to charitable groups. IRGC Administrator Brian Ohorilko said, “Those payments weren’t made. I think it’s something the commission really needs to talk to our attorney about and try to determine if the state will try to recoup that money.”
In November 2013 a Polk County District Court judge denied Penn National’s motion to appoint a third-party receiver to collect and distribute the funds until its breach-of-contract lawsuit against MRHD was settled. The IRGC also denied Penn National’s request to redirect the funds to a new local nonprofit.
MRHD board president Mark Monson said $1.8 million is a significant amount that is owed to the community, but that it’s not MRHD’s job to pursue it. “It’s my opinion that that is the responsibility of the Iowa Racing and Gaming (Commission),” Monson said. The earliest the IRGC could publicly discuss the matter is at its July meeting.
Meanwhile the riverboat casino was sold and has been removed from the Sioux City riverfront.
