Polk County District Court Judge Eliza Ovrom recently ruled the Argosy Sioux City riverboat casino could remain open at least through July 10—although the previous day, the Iowa Racing and Gaming Commission voted unanimously to deny a stay of its order to close the Argosy on July 1.
Ovrom scheduled July 10 to hear final arguments in Argosy’s appeal of the IRGC‘s decision, dating back to April 17, requiring the gambling boat to shut down. Ovrom said the two-week delay in enforcing the IRGC order will provide a “little breathing room” to sort out the various legal issues in the case. “I don’t think there’s significant harm to any other party by this brief stay. I think this brief delay is warranted and I appreciate you being willing to expedite matters,” Ovrom told attorneys. She stated she will make her final decision before the new Hard Rock Hotel & Casino Sioux City opens on August 1.
At the hearing, Mark Weinhardt, attorney for Argosy parent Penn National Gaming, argued that allowing the riverboat to remain open and keep its 260 worker employed at least until the end of July would do no harm.
But Guy Cook, attorney for Hard Rock developer SCE Partners, argued the Argosy does not have a state-licensed nonprofit sponsor, as required by Iowa law. “They can’t win this case. That’s why they shouldn’t get a stay. The court can’t give them what they don’t have, which is an agreement with a nonprofit,” Cook said. Argosy’s license lapsed after its previous nonprofit partner, Missouri River Historical Development, refused to sign off on an application for a standard one-year renewal in December 2012.
Argosy attorney Christopher Tayback repeatedly noted the IRGC allowed the Argosy to remain open after its contract with MRHD expired under “operation of law,” and still gives the Argosy the right to operate in the state. But Iowa Assistant Attorney General John Lundquist countered, “This notion that operation of law saves the day here is just wrong.”
Following the July 10 hearing, if Ovrom rules against Argosy, Penn National could file an appeal with the Iowa Supreme Court. If Ovrom finds in Argosy’s favor, the stay likely would be extended, allowing the boat to remain open, at least until Ovrom rules in a related but separate lawsuit Penn National filed against the IRGC. Penn National seeks to overturn or vacate several IRGC actions that led to the Hard Rock developer and its nonprofit partner, Argosy’s former partner MRHD, receiving a land-based casino license. The group beat out Penn and another applicant. Final arguments in that case will begin September 26 in Des Moines.
Weinhardt told Ovrom, “We can’t simply keep the boat in mothballs while we wait for a court to rule on our earlier case. If the boat closes, it closes forever.” He said closing the boat would cause Penn National irreparable harm—specifically, losing its $100 million investment in Sioux City. But Iowa Assistant Attorney General John Lundquist asked why Argosy waited until the last minute to seek a court order to delay the boat’s scheduled closure. “If this harm was so great and apparent going forward, why weren’t we litigating this case weeks ago, rather than wait to today,” he said.
Cook said by attempting to keep the riverboat open, Argosy officials are harming their employees who will not be able to find other work. “There’ll be no jobs for these people, ” Cook said, noting Hard Rock officials said they expect to hire 500 workers by mid-July. In response, Weinhardt said Argosy workers can apply at Hard Rock whether or not the boat remains open. “I think the fact that so many of them have stayed with us to this point shows where their loyalties are,” he said.
Cook said he accepted Ovrom’s “very brief” stay. “What’s important is we believe the boat will be closed before the Hard Rock opens,” Cook said.
