JOHNSTON, Iowa | Iowa gaming regulators denied the owner of the Argosy Sioux City's bid Thursday to redirect a portion of casino revenues to a different nonprofit group.

The unanimous vote left in limbo the 3 percent of the floating casino's gross revenues that had previously went to Argosy's former nonprofit group,  Missouri River Historical Development.

In a separate, but related decision Thursday, the Iowa Racing and Gaming Commission also denied an Argosy appeal that would have temporarily blocked construction of the Hard Rock Hotel & Casino in downtown Sioux City.  

Since May, Argosy parent Penn National Gaming Inc. has withheld more than $700,000, or 3 percent of the boat's gross revenues, from MRHD over litigation involving a contract dispute. 

At Thursday's IRGC meeting in Johnston, Penn attorney Christopher Tayback argued that "it's not MRHD's money because they don't have a contract with" Argosy.

Argosy wanted the IRGC to ratify Argosy's contract with a different nonprofit Greater Siouxland Improvement Association, making that group eligible to start taking in and distributing the funds.

But IRGC officials ruled that only nonprofits that jointly hold a casino license are eligible for the funds. MRHD continues to hold the nonprofit portion of the license for the Argosy, which the state has allowed to stay open under a provision known as "operation of law."

In an inteview after the IRGC decision, Tayback the company will have to decide what to do next. At this point, Penn have no plans to restart the monthly checks to MRHD. One option, he said, would be to have GSIA apply for the Argosy license.

Check back here for more details in this developing story. 


Our earlier story ... 

Argosy owner faces tough sell with IRGC

SIOUX CITY | With a flurry of litigation over the future of gambling in Woodbury County still unsettled, the owner of the Argosy Sioux City likely faces an uphill battle Thursday to convince Iowa regulators to redirect the portion of the floating casino's profits designated for charitable purposes.

Since May, Argosy parent Penn National Gaming Inc. has withheld the 3 percent of gross gaming revenues that had been going to its former  nonprofit partner, Missouri River Historical Development.

A week after a judge denied Penn's bid to have a third-party receiver to control the money until a breach-of-contract lawsuit against MRHD is worked out, the casino operator is now trying a different tactic to avoid sending MRHD the checks.

At a meeting in Johnston Thursday, Penn officials will ask the Iowa Racing and Gaming Commission to approve a contract with a new nonprofit, called the Greater Siouxland Improvement Association, or GSIA.

In an interview Wedneday, IRGC Chairman Jeff Lamberti expressed skepticism.

"It seems to me they're trying to get us to do what the court refused to do," said Lamberti, an Ankeny attorney. "I don't think it's the business of the commission to get in the middle of this at this point in time, particularly with all the litigation going forward."

Though a contract between the two parties expired last July, the IRGC continues to recognize MRHD as holding the nonprofit portion of the Argosy license, Lamberti said. Thus, the group is entitled to the minimum of 3 percent of gross gaming receipts that state law requires operators to distribute.

Penn officials argue that Polk County District Judge Robert Hanson's decision in the receivership question permits the company to make the payments instead to a different nonprofit licensed by the state.

"GSIA was deemed suitable by the IRGC this past spring and thus we expect no issue with the commission approving our contract with GSIA to distribute our 3 percent of revenues to community charitable groups at this time," Penn spokeswoman Karen Bailey said in a statement.

GSIA, governed by a 10-member board of tri-state leaders, was formed after contract talks between Penn and MRHD broke down last summer. After the IRGC decided to take bids for a land-based casino to replace the Argosy, Penn and GSIA jointly applied, offering a choice of two sites for a Hollywood-themed casino.

In a split decision April 18, the commission awarded the license to MRHD and its new partner, the developer of the Hard Rock Hotel & Casino.

In a separate but related agenda item Thursday, the IRGC will hear Penn's appeal to stay the commission's April 18 vote, and halt construction of the $128.5 million project in the Battery Building in downtown Sioux City until its judicial appeal of the IRGC actions is resolved.

Online

Visit siouxcityjournal.com for a live blog of the Iowa Racing Gaming Commission meeting in Johnston, Iowa, on Thursday, beginning at 8:30 a.m.

Join Journal Business Editor Dave Dreeszen as he reports from the meeting, where the owner of the Argosy Sioux City will ask to send the portion of casino revenues designated for charitable purposes to a new nonprofit group, instead of its former partner Missouri River Historical Development.