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Argosy Casino-Sioux City

The Argosy Casino-Sioux City, shown in 2011, closed in July 2014. The former casino's owners and Missouri River Historical Development have agreed to dismiss the remaining lawsuit involving the former casino, bringing nearly six years of litigation to an end.

DES MOINES -- The dismissal of a lawsuit involving the former Argosy Sioux City riverboat casino owner and its local nonprofit partner has ended years of litigation that lingered long after the casino was sent floating down the Missouri River.

Missouri River Historical Development, the Belle of Sioux City, which operated the Argosy, and its parent company, Penn National Gaming Inc., on July 31 filed a joint dismissal of a lawsuit and counter lawsuit in Polk County District Court in Des Moines. Each side will pay for its own legal expenses.

The ongoing litigation hadn't hampered MRHD's ability to distribute gambling revenues from Sioux City's Hard Rock Hotel & Casino to local charitable and nonprofit organizations, MRHD president Dakin Schultz said, but now that it's settled, it will be one less distraction for board members.

"We are pleased to see that this matter has come to an end," Schultz said.

In September 2012, in the midst of a bitter dispute, Belle of Sioux City sued MRHD, the state-licensed nonprofit gaming group that had held Woodbury County's gambling license with Belle, for breach of contract. Belle had claimed that MRHD schemed to replace the Argosy with another operator before their 20-year contract expired in July 2012.

MRHD and the casino operator had been unable to come up with a long-term contract extension that would have included a land-based casino, and the Iowa Racing and Gaming Commission took the unprecedented step of putting Woodbury County's license up for grabs and began accepting proposals for a new casino.

MRHD denied Belle's charges and countersued, claiming that Penn National interfered with MRHD's prospective relationships with other potential operators by sending letters threatening legal action against them. MRHD also claimed that Penn's actions prevented or delayed it from negotiating a more lucrative land-based casino agreement.

The IRGC in June 2013 awarded a gambling license to MRDH and the Hard Rock's owner, SCE Partners, for the $130 million casino complex, which opened in August 2014 in downtown Sioux City.

The lawsuits had been scheduled to go to trial next month, but a judge's ruling in May decided two issues at the core of the Belle's suit and MRHD's countersuit.

District Judge David May ruled that MRHD had the right to begin searching for a new casino operator prior to the expiration of its agreement with Belle so that it could have a new deal in place once its contract with Belle expired. May said MRHD was not in breach of contract, effectively dismissing Belle and Penn's claim that they had the exclusive rights to negotiate a new agreement with MRHD.

May also dismissed MRHD's counterclaim that Penn and Belle interfered with their search for casino operators after ruling that the letters sent to those potential operators by Penn were not improper and did not constitute interference.

Mark Weinhardt, a Des Moines attorney who represented Belle and Penn, did not immediately return messages seeking comment.

The dismissal is the last in a series of rulings and settlements that have occurred since the riverboat casino was closed in July 2014 and later sold and floated away to an Illinois salvage company.

The Iowa Supreme Court in May 2016 ended a separate legal battle when it denied the Belle's request to review an Iowa Court of Appeals ruling that upheld previous rulings that led to the casino's closure.

In March, Belle and Penn agreed to pay $1.5 million to the Community Action Agency of Siouxland to settle another lawsuit in which the Sioux City nonprofit had sought unpaid revenue-sharing funds from the gambling companies. Iowa casino operators are required to partner with licensed gaming nonprofit organizations such as MRHD, which collect and distribute a portion of gambling profits to charitable and civic organizations. The Belle had withheld several months of payments to MRHD after filing its breach of contract lawsuit.

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