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Argosy Casino leaves Sioux City

The former Argosy riverboat casino travels down the Missouri River after leaving its Sioux City dock on Oct. 7, 2014. After being docked in Illinois for four years, it has been sent to western India to be used as a substitute casino boat when two others are sent to dry-dock for repairs. 

DES MOINES | The Iowa Court of Appeals on Wednesday upheld a series of rulings that led to the closure of the former Argosy Sioux City riverboat casino.

In its ruling, the court said that the Argosy's incomplete gambling license renewal applications in 2012 and 2013 did not trigger protections spelled out in Iowa law and that state regulators' subsequent actions to deny the Argosy's Iowa-based operator, Belle of Sioux City, a gaming license and award a license to another applicant did not violate the Belle's right to due process.

"Neither Belle's 2012-2013 renewal application nor its 2013-2014 application for a license for the Argosy was 'sufficient,' and as a result, neither triggered the protection of (Iowa law)," Judge Amanda Potterfield wrote in the court's 25-page ruling.

Mark Monson, board president for Missouri River Historical Development, the state-licensed nonprofit gaming group that had held Woodbury County's gambling license with Argosy, said he was happy to a see a decision that brings a long-running legal battle closer to its end.

"We are pleased with the ruling," Monson said. "We went through a process that was quite difficult, and we could have lost our license."

Wednesday's ruling does not necessarily bring the case to a close. Belle of Sioux City could petition the Iowa Supreme Court to review the lower court's ruling. The company's attorney, Mark Weinhardt, of Des Moines, said no decision has been made on the next step in the case.

"We disagree with and are extremely disappointed by today's ruling. We are studying our options for further action," Weinhardt said in a written statement.

Belle, a subsidiary of Wyomissing, Pa.-based Penn National Gaming Co., the nation's largest gaming operator, had challenged the Iowa Racing and Gaming Commission's actions when granting a state gaming license in 2013 to the Hard Rock Hotel & Casino Sioux City and MRHD, its local nonprofit partner, as well as subsequent judicial rulings that upheld those actions.

During a Feb. 23 hearing before a three-judge panel of the court, Weinhardt had argued that the IRGC had given Argosy officials inconsistent messages throughout the license-renewal process.

"Although the IRGC may have acted inconsistently, Belle has not established that its substantial rights were prejudiced, so no relief is warranted," the court said in its ruling.

The ruling was a welcomed affirmation of the IRGC's actions during the licensing process, IRGC administrator Brian Ohorilko said Wednesday.

"We were very careful and very deliberately made sure we were following Iowa law," Ohorilko said. "It was a very unique set of circumstances and we're hopeful this is never repeated at one of the other properties in Iowa."

In December 2014, Belle appealed District Judge Eliza Ovrum's Nov. 7, 2014, ruling in Polk County District Court that the IRGC had acted within its authority when it granted the gaming license to Hard Rock and MRHD.

That case was a result of a lengthy contract dispute between Argosy and MRHD that led to the IRGC's decision in April 2013 to accept bids for Woodbury County's first land-based casino.

Belle claims the IRGC's actions were "unreasonable, arbitrary and capricious" and violated state law and the company's rights of due process.

The Court of Appeals on Wednesday dismissed that argument, saying that the IRGC followed state law when it announced and voted on whether to consider new parties for a land casino in Woodbury County. Belle representatives were at those meetings and had the opportunity to make statements. The company also was able to make its own license applications.

"Although Belle disagrees with the IRGC's decision to award licenses to conduct and operate games at the Hard Rock casino, Belle has not shown that the decision violated Belle's right to due process," the court said in its ruling.

The IRGC ordered the casino to close in July 2014 because it was in violation of a state law that requires casinos to partner with licensed nonprofit groups. The Argosy's license lapsed after MRHD, its then-nonprofit sponsor, refused to sign off on a license renewal application.

Ovrum upheld that IRGC decision, and the floating casino was closed July 30, 2014, two days before the $128 million Hard Rock opened in downtown Sioux City.

The Argosy boat and accompanying structures on shore have since been removed from the Missouri riverfront. The boat was sold to an Illinois shipyard.

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