Warrior Entertainment LLC, the development group that includes Ho-Chunk, the Winnebago Tribe’s economic development division, along with the tribe and other investors, filed a petition March 13 in Polk County, Iowa District Court to enter Argosy’s lawsuit against the Iowa Racing and Gaming Commission. The lawsuit involves the IRGC’s award of a state gaming license to Sioux City Entertainment last April to build the 8.5 million Hard Rock Hotel and Casino, now under construction in downtown Sioux City. But in court documents, the IRGC, the Hard Rock Hotel & Casino Sioux City developer, SCE Partners, and the city of Sioux City all objected to Warrior Entertainment LLC’s petition to intervene in the case.
In its motion to resist, IRGC attorneys argued that the Warrior group, after missing the deadline to file its own judicial review suit, is now attempting to “impermissibly piggyback” onto the Argosy’s suit. The Warrior’s “speculative and indirect interest” does not warrant participation in the suit, the IRGC argued. “At most, Warrior can only hope that IRGC is ordered to reconsideration of its prior licensing decisions,” IRGC attorneys said.
In a statement, Ho-Chunk President and Chief Executive Officer Lance Morgan said he understands why there were objections. “We are like an uninvited guest at a party. But we feel that we obviously have an interest in the proceeding and no one but us can adequately protect our interests,” Morgan said.
In their legal filings Monday, the IRGC and SCE Partners countered that Warrior’s “limited” interests are represented by Argosy because both companies are making similar arguments against the IRGC. In court documents, Warrior stated the IRGC violated its constitutional rights and state law, and also ignored its own rules by allowing the Hard Rock group to make “wholesale, and untimely, amendments” to its application, including its financing plans. Warrior said it was not adequately represented by any of the other parties in the IRGC suit, which includes Hard Rock developer SCE Partners LLC, its nonprofit partner, Missouri River Historical Development, and the city of Sioux City in addition to IRGC and Argosy.
The Warrior group also presented a Sioux City casino proposal, based around the historic downtown Warrior Hotel; Penn National, owner of the Argosy Sioux City riverboat, also offered two Hollywood-themed casino options. Penn filed a lawsuit against the IRGC in May.
However, Morgan said his group started rethinking its position after an Iowa district court judge granted Penn’s request to suspend the Hard Rock license last December 10, pending a resolution in the judicial review case against the IRGC. A different district court judge reversed that ruling last month after the Iowa Supreme Court ordered the lower court to reconsider the case. The new ruling allowed construction on the Hard Rock project to proceed and open later this year. “Once Penn started getting traction in their lawsuit, and it looked like they might have some chance, it occurred to me what might happen. That’s when we decided that we might need to intervene at some point,” Morgan said.
Morgan said if the courts rule against the IRGC, the request to intervene positions Warrior Development to participate in settlement talks. “If the system was flawed and Penn were to prevail, what’s Hard Rock going to do? They’re going to have to sit down and come to an arrangement. It would be very convenient for their purposes if we weren’t there. It was a three-horse race, and we need to be part of the solution,” Morgan said. He noted Ho-Chunk and the tribe invested more than $1 million to prepare a casino bid.
Judge Eliza Ovrom will hear final arguments September 6 in Des Moines. Warrior Development will be allowed to participate if Ovrom determines they may intervene. Ovrom on March 3 granted the city of Sioux City’s petition to intervene in the case. The city cited the large public investment it has made in the Hard Rock project, including borrowing $22 million to help fund parking and other infrastructure.
In the remote chance that the court finds that neither SCE nor Penn National should be awarded the license due to a “flawed” process, Warrior Development would be the “logical recipient” of the license, according to court documents. Lew Weinberg, a Sioux City businessman who was one of the Warrior Development investors, said the Warrior plan remains viable.
Also in Iowa, the House Ways and Means Committee will consider a bill that would end greyhound racing in the state and pay breeders and employees up to $70 million. The measure would end subsidies to the dog racing tracks currently paid by casinos in Council Bluffs and Dubuque, which spent $10 million last year.
The casinos would pay $70 million over six years to provide a retirement fund for dog owners, breeders and other dog racing workers. The greyhound industry employs 1,200 people in Iowa and has proposed continuing racing in the state. Lawmakers told casino and dog racing industry officials to devise a plan or accept the legislature’s solution.
