Polk County, Iowa District Judge Eliza Ovrom recently ruled Penn National Gaming’s Argosy Sioux City riverboat casino can remain open until she rules on Argosy’s appeal to the Iowa Racing and Gaming Commission’s decision to close the casino, originally set for July 1. Late last month, Ovrom granted the casino a 10-day stay to remain open past that deadline. The day before that ruling, the IRGC denied Argosy’s request to remain open at least until August 1, when the new Hard Rock Hotel & Casino Sioux City is scheduled to open. Ovrom said she hoped to issue a ruling early next week. Argosy employs 260 people.
Mark Monson, president of Hard Rock’s nonprofit partner, Missouri River Historical Development, said the extension “doesn’t affect us. We’re looking forward to August 1 and our new partnership with Hard Rock. We’re looking forward to getting and distributing funds.” MRHD previously had been Argosy’s nonprofit partner, but refused to sign off on an application for a license renewal after the contract between it and Argosy expired in July 2012. The following April MRHD was granted a gaming license with Hard Rock developers SCE Partners.
Because Argosy no longer had a nonprofit partner, the IRGC on April 17 ordered the riverboat to close. Iowa gaming law requires casino operators to partner with licensed nonprofit groups and to share with those groups a percentage of casino revenues to be distributed to charities. Argosy teamed with a new nonprofit group when it attempted to win the land-based casino gaming license that was granted to MRHD and SCE Partners. Argosy stopped making payments of 3 percent of its gambling revenues to MRHD.
Guy Cook, a Des Moines attorney representing SCE Partners, said, “Argosy’s failure to pay 3 percent is a very revealing fact. They lost their operating agreement with the charity, with MRHD. Once that was lost, they could never, ever continue as a casino. They’ve continued on the good graces of the IRGC. The IRGC has decided they don’t have an operating agreement, and they must close. They don’t have an agreement. Their license has expired. They should and must close. We think it’s the right thing to do. It’s the right thing for Sioux City, and it’s the right thing for the boat. They’ve lost at every turn, and it’s time for them to shut their doors.”
Penn National lawyers said Argosy should remain open under operation of law. Penn National attorney Mark Weinhardt of Des Moines said, “We did not need to submit an application to renew. MRHD’s license is operational under operation of law even if MRHD believed it didn’t have one. We believe that we have an operating agreement with MRHD. We believe that that agreement is effective until 2015. We’re just looking for the courtroom in which we can fully litigate that question and prove that we’re right,” Weinhardt said.
If Ovrom rules against Argosy, the casino will close. However, Weinhardt said Argosy would appeal to the Iowa Supreme Court. If Ovrom rules in Argosy’s favor, the stay on the casino’s closure would remain until resolution of the Penn National’s lawsuit against the IRGC, in which Penn National has asked the court overturn or vacate numerous actions by the IRGC that led to MRHD and SCE Partners receiving the gaming license for land-based Sioux City casino. Penn and another applicant also had submitted proposals. Final arguments in that case will be heard September 26 in Des Moines.
Also in Iowa, the Rhythm City Casino reopened at 7 a.m. after being closed for two weeks due to Mississippi River flooding. The sixth-highest flood in the history of the Quad Cities forced the riverboat casino to shut down operations 6 p.m., Monday, June 30.
General Manager Mo Hyder said, “The floodwaters have receded, allowing clean and safe access to our property for guests and employees. We greatly appreciate the hard work of our team members, as well as all the city employees who have made an extraordinary effort to protect not only our facility, but all of the buildings and businesses located downtown.”
