July 16 2014 Motion

" ..
BEFORE THE IOWA SUPREME COURT
BELLE OF SIOUX CITY, L.P., ) Supreme Court . JUL 1 6 2014

)
Petitioner/Appellant, ClERK SUPREME COURT
)
) Polk County Case No.
V.
) CVCV047791
)
IOWA RACING AND GAMING ) APPLICATION FOR STAY
COMMISSION, SCE PARTNERS, ) PENDING APPEAL AND
LLC AND MISSOURI RIVER ) MOTION FOR IMMEDIATE
HISTORICAL DEVELOPMENT, ) RELIEF
INC. )
)
Respondents/Appellees. )
IMMEDIATE RELIEF REQUESTED: EMERGENCY STAY

OF THE IOWA RACING AND GAMING COMMISSION'S ORDER,
AS AFFIRMED BY THE DISTRICT COURT, REQUIRING BELLE TO
CLOSE THE ARGOSY CASINO ON JULY 22,2014
COMES NOW the Petitioner/Appellant, Belle of Sioux City, L.P. ("Belle"),
and applies to this Court for a stay of the July 14, 2014 order of the District Court
for Polk County, Iowa which affirmed, on judicial review, an April17, 2014 order
1
of Respondent/Appellee, the Iowa Racing and Gaming Commission ("IRGC").
The IRGC's order, as affirmed by the district court, requires Belle to close its
Argosy Casino in Sioux City effective July 22, 2014, if Belle does not obtain a stay
of closure from this Court by July 21, 2014. Pursuant to Iowa R. App. P.
1
The district court's July 14, 2014 order is attached to this application as
Exhibit A. The IRGC's April17, 2014 order is attached as Exhibit B.
03375.23641/6121163.1 {0202539l.DOC} 1
6.1002(4), Belle seeks an immediate, emergency stay ofthe district court's order
pending this Court's consideration of the instant application for stay. Pursuant to
Iowa R. App. P. 6.601(1), Belle also seeks a brief stay of the district court's order
to keep the Argosy Casino operational during the pendency of Belle's appeal.
As discussed below, without a stay, Belle's long-standing, multi-million
casino will be permanently and irrevocably closed down effective July 22, 2014,
and the jobs of more than 250 employees will be lost. Belle is entitled to a stay not
only because of the irreparable harm it would suffer without one, but also because
it has a strong likelihood of prevailing on appeal given that the district court's
order, like the IRGC ruling it affirmed, is based on errors of law and is not
supported by substantial evidence.
PROCEDURAL BACKGROUND
The action of the IRGC challenged here was the IRGC's decision, at its
meeting on August 15, 2013, to deny what the IRGC considered a December 2012
"application" by Belle for the renewal of its license to operate the Argosy Casino.
On August 27, 2013, the IRGC gave Belle a required written notice of that
decision and notified Belle of its right to contested case review. 2 Belle exercised
that right, and a contested case hearing was held before the IRGC on March 5 and
6, 2014. On April17, 2014, the IRGC issued its order deeming Belle ineligible for
2
The August 27, 2013 notice is attached to this application as Exhibit C.
03375.23641/6121163.1 {0202539I.DOC} 2
renewal of its license and requiring Belle to close the Argosy Casino by July 1,
2014. See Exhibit B.
Belle sought judicial review ofthe IRGC's order. In advance of July 1,
2014, Belle sought a stay of the IRGC's order in the district court to keep the
Argosy Casino open pending judicial review. The district court granted the stay
and held a hearing on the merits ofthejudicial review petition on July 10,2014.
On July 14, 2014, the district court issued its order affirming the IRGC' s order and
lifting the stay effective July 22, 2014. See Exhibit A. Belle filed its notice of
appeal in the district court on July 16, 2014.
FACTUAL BACKGROUND
In December 2011, Belle and its non-profit "QSO" partner, Missouri River
Historical Development Inc. ("MRHD"), jointly submitted an annual application
for renewal of the licenses they had held for the Argosy Casino for two decades.
At the time, the operating agreement between them was scheduled to expire at
mid-year 2012. In the summer of2012, the parties executed an extension of their
operating agreement through March 2015. Almost immediately, MRHD disputed
the effectiveness of that extension, contending it was ineffective; Belle consistently
has contended the extension is legally binding. (The validity of that operating
agreement has yet to be litigated and is the subject of a separate breach of contract
lawsuit between MRHD and Belle.)
03375.23641/6121163.1 {0202539l.DOC} 3
The IRGC did not reject the Belle/MRHD December 2011 renewal
application on the grounds it was not ~~'sufficient" in light of the pending expiration
of the operating agreement. Instead, the IRGC granted that application outright for
part of the renewal period and granted it subject to conditions for the remainder of
the licensing period. Indeed, the IRGC argued below that it "in no way limited or
restricted Belle's or MRHD's full use of their respective licenses" pursuant to their
December 2011 application, nor did it "ever vote to revoke or otherwise deny
renewal of Belle's and MRHD's licenses" for the licensing period covered by that
application.
Although the IRGC now contends that it never officially denied Belle's and
MRHD's December 2011 renewal application, the IRGC at its August 2012
regular meeting did state that because of the purported expiration in July 2012 of
Belle's operating agreement with MRHD (which was and remains a disputed
issue), it could not formally renew their licenses any further. However, the
presiding commissioner and the IRGC's chief administrator stated at that meeting
that Belle and MRHD would remain licensed by operation of law under Iowa Code
§ 17A.18(2) until the IRGC held proceedings to address the status of their licenses.
As the IRGC admits, it has never scheduled those proceedings or taken any further
action on the Belle/MRHD December 2011 renewal application.
03375.23641/6121163.1 {02025391.DOC} 4
In the meantime, based on the purported uncertainty of the gaming situation
in Sioux City, and in disregard of various alternative proposals Belle had made to
address the disputed status of the operating agreement, the IRGC opened a land-
based casino license in Woodbury County up for bids from all interested parties.
Belle submitted two different applications with a QSO other than MRHD; an
unrelated third party also applied; and a newly formed gaming company called
Sioux City Entertainment ("SCE") submitted an application with MRHD. The
IRGC approved the SCE/MRHD application, and SCE set about building a casino
in downtown Sioux City under the Hard Rock brand name. SCE asserts that its
\
new casino will open August 1, 2014. 3
In December 2012, the usual annual deadline for renewal applications for all
casino licenses was impending. Through both its administrator and its counsel, the
IRGC notified Belle that, consistent with its statements in August 2012, Belle and
MRHD remained licensed by operation of law under section 17A.l8(2). Thus,
Belle and MRHD were told they did not need to submit-and that the IRGC would
not accept-a license "renewal application" from them. Instead, after further
consultations with the IRGC, Belle used an application form from previous years
and a written submission of its own creation (because the IRGC would give Belle
3
The course of events by which the IRGC decided to take bids for a land-
based casino and chose SCE/MRHD's bid is the subject of a separate judicial
review action in the district court for Polk County that has not yet been heard on
the merits. That hearing is scheduled for September 26, 2014.
03375.23641/6121163.1 {0202539l.DOC} 5
no renewal application) to provide the IRGC with information it said it needed to
continue to regulate the Argosy Casino for the coming year. The IRGC did not
require any such information from MRHD, which does not participate in the
Argosy Casino's operation, and MRHD therefore did not submit anything to the
IRGC. MRHD did not view its decision not to submit a renewal application as a
decision to abandon its license, however, because, as MRHD's president testified
in the contested case hearing, all parties understood that MRHD (like Belle) did
not need to submit a renewal application at the time to retain its license.
After Belle submitted information to the IRGC in December 2012 and
MRHD submitted nothing, no one from the IRGC ever told Belle or MRHD that
their licenses would "expire" as a result of their December 2012 actions. To the
contrary, the IRGC continued to treat MRHD as a licensed entity and MRHD
continued to act as though it were licensed.
Many months later, at its August 2013 meeting, the IRGC reversed course
and, for the first time, treated Belle's December 2012 submission as a formal
"renewal application," which it then denied. (Although, as a matter of course,
renewal applications are taken up at the IRGC's March meetings each year, no
mention was made of Belle's purported "renewal application" five months earlier
in March 2013.) The reason given for the denial was the same one proffered by the
IRGC a year earlier: It did not believe Belle had an effective operating agreement
03375.23641/6121163.1 {0202539l.DOC} 6
with MRHD. (Nearly a year earlier, though, the IRGC had considered that
"deficiency" as a reason why no renewal application was needed-and why Belle
and MRHD would continue to be licensed under operation of law-not as a reason
to require and then reject a renewal application.) On August 27, 2013, the IRGC
gave Belle formal written notice of its decision and the opportunity to seek a
contested case hearing. See Exhibit C. Notably, the IRGC stated in this notice
letter that "MRHD is the QSO licensed to conduct gambling games at the Argosy
Casino in Sioux City."
In the following months, the IRGC scheduled the contested case hearing for
March 5-6, 2014. Despite its earlier focus on the expiration ofthe Belle/MRHD
operating agreement as the basis for its non-renewal of Belle's license, the IRGC
now proclaimed, repeatedly, that the only issue the contested case hearing would
address was whether Belle's purported December 2012 renewal application was
deficient because MRHD did not join in that application, leaving Belle without a
QSO partner. Given the lengthy dispute regarding the status of the Belle/MRHD
operating agreement, Belle repeatedly sought confirmation that the status of that
operating agreement would not be addressed at the contested case hearing, and the
IRGC repeatedly gave such confirmation. Accordingly, the contested case hearing,
and the IRGC's April 17 ruling following it, turned entirely on whether Belle's
03375.23641/6121 163. I {0202539l.DOC} 7

alleged December 2012 application was deficient in the absence ofMRHD's
joinder. 4
ARGUMENT
Iowa Code § 17A.19( 5)(c) requires the balancing of the following factors to
determine the propriety of a stay: (1) the extent of Belle's likelihood of success on
judicial review; (2) the extent of irreparable harm Belle will suffer in the absence
of a stay; (3) whether a stay would substantially harm other parties to the
proceedings; and (4) whether the public interest relied upon by the agency justifies
a stay. Iowa Code§ 17A.19(5)(c)(l)-(4). No requisite showing is required for any
given factor. A minimal showing of one or more factors may suffice, depending
on the Court's assessment of the other factors. Grinnell Col!. v. Osborn, 751
4
Notwithstanding the clear and undisputed record showing that the IRGC
expressly determined not to evaluate the sufficiency of Belle's license based on the
status of the Belle/MRHD operating agreement, the district court's order is
peppered with references to the disputed status of that operating agreement. The
status of that operating agreement is the very issue Belle was told would not and
could not be litigated as part of the contested case. To the extent the district
court's ruling affirming the IRGC's April17 order is in any way predicated on
Belle's purported lack of an operating agreement with MRHD, the ruling is
erroneous and must be reversed because the operating agreement was not the basis
for the IRGC's ruling, and Belle has not been given any administrative process
regarding that issue. See, e.g., SECv. Chenery Corp., 318 U.S. 80,95 (1943)
(courts may not affirm administrative orders on grounds other than those relied on
by the agency); Burton v. Hilltop Care Center, 813 N.W.2d 250,256 (Iowa 2012)
(judicial "review is limited to the findings that were actually made by the agency
and not other findings that the agency could have made").
03375.23641/6121163.1 {0202539I.DOC} 8
N.W.2d 396, 402 (Iowa 2008). "In other words, more of one factor excuses less of
another factor." !d.
I. BELLE IS LIKELY TO SUCCEED ON THE MERITS OF THIS

APPEAL.
Contrary to the holding of the district court, this factor favors entry of a stay
because Belle is substantially likely to prevail on the merits of its appeal. The
IRGC's order is contrary to law and based on grounds that the record below makes
clear are pretextual and unsupported by substantial evidence.
A. The District Court Erred By Failing To Apply Section 17A.18(2).
The IRGC and the district court each committed an error of law by
misconstruing Iowa Code § 17A.l8(2). See Iowa Code § 17A.l9( 10)( c) (judicial
review petitioner entitled to relief when agency action is "[b]ased upon an
erroneous interpretation of a provision of law whose interpretation has not clearly
been vested by a provision of law in the discretion of the agency"). Section
17A.18(2) provides:
When a licensee has made timely and sufficient application for the
renewal of a license or a new license with reference to any activity of
a continuing nature, the existing license does not expire until the
application has been finally determined by the agency, and, in case the
application is denied or the terms of the new license limited, until the
last day for seeking judicial review of the agency order or a later date
fixed by order of the agency or the reviewing court.
Iowa Code § 17A.18(2) (emphasis added).
03375.2364116121163.1 {0202539l.DOC} 9
There is no plausible reading of this statute that supports the IRGC's
conclusion that Belle and MRHD were required to submit a renewal application in
December 2012. Under section 17A.8(2), Belle's and MRHD's licenses had not
"expired" as of that time, and would not expire for the foreseeable future because
the IRGC had yet to even schedule, let alone hold, a hearing on the status of their
licenses. This is precisely why, at the time, the IRGC repeatedly notified Belle that
it did not need to submit a renewal application to retain its license, and MRHD
understood that it did not need to submit anything at all.
Lacking any basis to reconcile its closure order with section 17A.18(2), the
IRGC suggested in its April 17 order (in a transparent attempt to avoid the plain
language of the statute) that it "may have erred in allowing gambling to continue at
the Argosy Casino" under section 17A.l8(2) because MRHD's and Belle's
December 2011 application "was arguably insufficient to trigger" that statute in
the absence of an "operating agreement for the entire term of the licensing year."
See Exhibit B at 10 (emphasis added). The IRGC had never asserted this before,
including at any time before or during the contested case hearing itself, and it did
not argue it in the judicial review proceedings below. Nevertheless, the district
court seized on this suggestion by the IRGC to conclude that the IRGC "is correct
when it concludes the 2011 application was not 'sufficient' under 17A.18(2)
because of the lack of an approved operating agreement that extended throughout
03375.23641/6121 163. I {02025391.DOC} 10

the entire licensing year." See Exhibit A at 19-20. The district court similarly
faulted Belle for not having "proven this is an erroneous interpretation of law, [or]
that it is wholly irrational." !d. at 19.
The district court erred by holding that section 17A.18(2) did not apply to
Belle's and MRHD's licenses. By its plain terms, the statute applied because Belle
and MRHD submitted a "timely and sufficient" application in December 2011 that
was not only accepted by the IRGC, but in fact granted by the IRGC in part and
never rejected for being "insufficient" or otherwise. As quoted above, the IRGC
admitted below that it did not take any adverse action against the Belle or MRHD
licenses based on their December 2011 application. 5 See supra at p.4. The district
court's sua sponte conclusion that the IRGC "mistakenly" applied section
17A.l8 (2), such that the effect of that statute should be disregarded entire! y, is thus
contrary to the plain language of the statute, contrary to the IRGC's actions and
conduct at all relevant times, and inconsistent with the IRGC's own arguments on
5
The district court's conclusion that section 17A.18(2) did not apply to the
December 2011 application because it was "deficient" in light of the lack of an
operating agreement that covered the full term is likewise inconsistent with the
IRGC's argument below that section 17A.l8(2) "truly" applied after Belle's
submission of its purported December 2012 application. According to the IRGC,
the December 2012 application was facially deficient because it was not signed by
MRHD. If section 17A.18(2) applies even to what the IRGC considers to be a
facially deficient application, then it surely must apply to Belle's and MRHD's
December 2011 application which, according to the IRGC, was never found to be
insufficient or lacking in any respect.
03375.23641/6121163.1 {02025391 .DOC} 11

judicial review. 6 It is manifestly prejudicial to Belle for the district court to rule
against it on the ground that it failed to prove that an argument the IRGC never
raised-and about which it in fact took a contrary position before, during, and
after the contested case hearing-is "erroneous" or "wholly irrational."
The district court also concluded that "Belle has not proven it was
prejudiced by an erroneous interpretation" of section 17A.l8(2). This conclusion,
too, is not only unfair to Belle (because the IRGC did not even argue below that it
had made an "erroneous interpretation" of that statute), it is wrong. Regardless of
whether section 17A.18(2) should have applied, all parties conducted themselves
during the critical December 2012 time period as though it actually did apply.
Thus, in December 2012, the IRGC told Belle not to submit a renewal application,
Belle did not submit a renewal application (but instead provided information that
the IRGC requested about its operations), and MRHD submitted nothing, believing
that doing so would have no effect on the status of its license. Contrary to the
district court's conclusion that the IRGC's purportedly "mistaken" application of
section 17A.l8(2) was "harmless," it is highly prejudicial to Belle to evaluate the
conduct of the parties as though section 17A.18(2) never applied when all parties
6
The district court's ruling that section 17A.l8(2) did not apply to Belle's
and MRHD' s licenses is also contrary to the conclusion of the bankruptcy court
that carefully examined this issue and concluded that section 17A.18(2) is
applicable to Belle's and MRHD's December 2011 renewal application and that, in
light of the IRGC 's express application of that statute, any argument that section
17A.18(2) did not or should not have applied had been waived.
03375.23641/6121163.1 {0202539l.DOC} 12
understood and acted as though it did apply. Indeed, in essence, the district court
is punishing Belle-to the tune of taking away its entire business and hundreds of
jobs-simply because it took the IRGC' s words at face value and did precisely
what it was told to do.
Accordingly, section 17A.18(2) applied both by its own terms and pursuant
to the IRGC's own actions and statements. Because the IRGC's ruling cannot be
squared with section 17A.18(2), the order should be reversed.
B. The District Court Erred By Concluding That MRHD's License

"Expired."
The district court erred not only by concluding that Belle and MRHD were
required to submit a renewal application in December 2012, but also by concluding
that MRHD's license expired on Aprill, 2013 as a result of its failure to submit a
renewal application, thus leaving Belle without a QSO partner. Whether that
conclusion is (as Belle argued) a finding of fact or (as the district court concluded)
a conclusion of law, it is wrong under any standard.
First, As a matter of law, MRHD's license could not have "expired" on
April 1, 2013 as a result of its failure to submit a renewal application in December
2012 because that license was extended by operation of law under section
17A.18(2). As shown above, the district court's conclusion that section 17A.18(2)
did not apply to MRHD's license is erroneous, and, therefore, so is its conclusion
that MRHD's license expired on April1, 2013.
03375.2364116121 163. I {0202539I.DOC} 13

Second, as a matter of fact, there is simply no evidence, much less
substantial evidence, that MRHD's license expired on Aprill, 2013 as a result of
its failure to submit a renewal application in December 20 12-and this, of course,
is consistent with the legal conclusion that no renewal application was needed at
the time. At best, the district court cites testimony by MRHD' s president that
MRHD decided not to join Belle's renewal application in December 2012. But the
district court fails to address the same witness's testimony that MRHD understood
at the time (in accord with the IRGC's statements to Belle) that its own license,
too, was continued by operation of law, and MRHD did not need to submit renewal
papers to maintain its license and its claim to collect revenues from the Argosy
Casino.
The district court also failed to address overwhelming evidence showing
that after MRHD purportedly allowed its license to "expire" on April 1, 2013,
MRHD continued to assert-in letters, emails, court filings and elsewhere-that it
remained the licensed QSO for the Argosy Casino. For example:
• On April22, 2013, three weeks after MRHD's license purportedly expired,

MRHD's lawyer wrote to Belle-copying the IRGC's administrator-
demanding that Belle continue to make monthly revenue payments to
MRHD under their "ongoing license arrangement." MRHD asserted those
payments were due because the IRGC had "reaffirm[ ed]" its "decision
concerning the extension of the Belle of Sioux City I MRHD license by
operation of law," and that MRHD was required to accept statutory
payments from Belle "in order to maintain our license."
03375.2364116121163.1 {0202539l.DOC} 14
• Two months later, in a separate district court lawsuit, MRHD continued to
assert its alleged right to collect revenues from the Argosy Casino based
upon its license status, arguing that "MRHD and Belle ... are now
conducting their business 'under operation of law," and that, (([t]o date, the
[Commission} has not taken any action to discontinue Belle's use of
MRHD's license under operation of law since the August 23,2012
meeting," such that "Belle has continued to utilize MRHD 's license to
conduct gambling games on its excursion boat."
Further, the district court completely overlooked (as did the IRGC) that the
IRGC itself acted at all relevant times as though MRHD remained licensed at the
Argosy Casino after April1, 2013. For example:
• At the IRGC's August 15, 2013 meeting, the IRGC's Administrator stated
that Belle does "not have an operating agreement with the qualified
sponsoring organization licensed to conduct gambling games" at the Argosy
Casino-clearly indicating that there is such a licensee.
• In its August 27, 2013 notice of nonrenewal, the IRGC stated outright that
"MRHD is the QSO licensed to conduct gambling games at the Argosy
Casino." Exhibit Cat 1. In other words, the very document in which the
IRGC notified Belle that its license would not be renewed contradicts the
factual basis of its order of non-renewal.
• At all relevant times (indeed through today), the IRGC's website, which is
updated regularly, has stated that both MRHD and Belle are the "licensed"
entities for the Argosy Casino in Sioux City.
Neither the IRGC nor the district court addressed any of this evidence
showing that MRHD's license did not expire as a result of its decision not to sign a
renewal application. Even if some limited evidence in the record could be
construed otherwise, evidence is not "substantial" for judicial review purposes
merely because some evidence favors the finding of the agency. To the contrary,
"'[s}ubstantial evidence' means the quantity and quality of evidence that would be
03375.23641/6121163.1 {0202539I.DOC} 15
deemed sufficient by a neutral, detached, and reasonable person, to establish the
fact at issue when the consequences resulting from the establishment of that fact or
understood to be serious and of great importance." Iowa Code§ 17A.l9(10)(t)(1)
(emphasis in original); see Ringland Johnson, Inc. v. Hunecke, 585 N.W.2d 269,
272 (Iowa 1998) (holding that notwithstanding evidence in the record supporting
the agency's conclusion, the contrary evidence was "so compelling that a
reasonable mind would find the evidence inadequate to reach the same conclusion
as the agency"). Any finding by the IRGC that MRHD's license expired on April
1, 2013 is far from supported by substantial evidence under these standards.
In sum, the IRGC' s order, as affirmed by the district court, is contrary to
clear law and belied by clear and undisputed evidence. Belle's petition for judicial
review is therefore likely to succeed. This factor favors a stay.
II. A FAILURE TO STAY THE ORDERS BELOW WILL RESULT IN

IRREPARABLE HARM TO BELLE.
As noted, the Argosy Casino is a large and long-standing business in Sioux
City, representing a nine-figure investment by Belle, employing hundreds of
people, and generating substantial civic benefits. Moreover, evidence produced in
the record below, and which was never seriously controverted, shows that if
gaming is halted at the Argosy Casino, it would be virtually impossible to restart.
Employees, many of whom have worked at the Argosy Casino for decades, would
scatter. Customer continuity would be lost. Regulated equipment would need to
03375.23641/6121163.1 {02025391.DOC} 16
be removed. And, if gaming is not ongoing at the Argosy Casino's riverboat site,
Belle will lose its riverside lease with the City of Sioux City. Witnesses with
knowledge of the facts and expertise in the industry have testified without
contradiction that if the Argosy Casino closes, even briefly, its business will be
lost. Legally Belle has no recourse for damages against the IRGC in that event.
The Argosy Casino's looming shutdown is the essence of irreparable harm. The
district court correctly held that this factor favors Belle but did not give it the
weight to which it is entitled.
III. NO ONE WILL SUFFER ANY LEGALLY COGNIZABLE HARM IF

THE ARGOSY CASINO REMAINS OPEN DURING THE
PENDENCY OF THIS APPEAL.
Evidence produced in stay proceedings before the district court shows that
once SCE's new Hard Rock Casino opens, it will get the "lion's share" of the
gaming revenue in Woodbury County, but the Argosy Casino, if it remains open
too, would be profitable. The Argosy Casino also would continue to contribute tax
revenue to the State and localities. Indeed, Sioux City's mayor testified in a
deposition that was admitted in the district court that the City would be better off
financially with two casinos operational instead of one. 7
7
As Belle informed the district court during the stay proceedings there, if
the Argosy Casino remains open while the Hard Rock is operational, Belle will pay
MRHD its QSO fee from the Argosy Casino's revenues such that MRHD, like the
City, will likely benefit financially from both casinos being open.
03375.23641/6121163.1 {0202539l.DOC} 17
The only entity standing even potentially to lose from the Argosy Casino's
continued operation is SCE. No Iowa law, however, entitles SCE to a monopoly
on gaming in Woodbury County. To the contrary, the IRGC's own regulations
impose on licensees such as SCE acceptance of the risk of financial loss. 491 lAC
5.1 SCE's chief executive testified that SCE has been well aware of Belle's
numerous legal challenges to the IRGC's actions in Sioux City and that SCE made
a conscious decision to move forward with its new casino, accepting the risk of
those challenges. SCE has no interest that needs protection from this Court. This
factor favors a stay.
IV. THE PUBLIC INTEREST WILL BENEFIT FROM A STAY.
The public interest factor also favors a stay. Public interest lies in an
orderly and legal licensing process: The IRGC has provided neither. In contrast,
the public interest is harmed when, as here, a long-standing business is closed
without due process and under false pretenses.
The public interest also lies in a consistent stream of gaming revenue. A
stay from this Court will ensure that the flow of gaming revenue to Woodbury
County is not disrupted. Even after the Hard Rock is operational, the County, and
thus the public interest, would benefit from two sources of such revenue if the
Order is stayed. The public would also benefit, and certainly would not be harmed,
from two options for gaming in Woodbury County.
03375.23641/6121 163. I {0202539l.DOC} 18

V. THIS COURT SHOULD NOT REQUIRE A SUPERSEDEAS BOND
EXCEPT AS NECESSARY TO ASSURE PAYMENT OF COURT
COSTS.
This Court is authorized to stay a district court's order without the
requirement of a supersedeas bond. Iowa R. App. P. 6.601(1). That is what should
occur here. Of course, there is no award of money damages in this case that must
be secured. The only source of pecuniary loss to anyone from the Argosy Casino
remaining open is an arguable diminution of revenues at SCE's Hard Rock Casino.
As just noted, that is not a legally protectable interest. This Court accordingly
should forego the imposition of a bond except to assure payment of costs.
CONCLUSION
For the reasons stated above, this Court should grant an emergency stay of
the district court's order pending its resolution of the instant application. The
application for stay pending determination of Belle's appeal should be set for
submission on such terms as the Court may prescribe. Upon such submission,
Belle respectfully requests that this Court stay the district court's order during the
pendency of Belle's appeal.
03375.2364116121163.1 {0202539l.DOC} 19
WEINHARDT & LOGAN, P.C.
By~~
Mark E. Weinhardt AT0008280
Holly M. Logan AT0004710
Danielle M. Shelton AT0007184
2600 Grand Avenue, Suite 450
Des Moines, Iowa 50312
(515) 244-3100
mweinhardt@weinhardtlogan.com
hlogan@weinhardtlogan.com
dshelton@weinhardtlo gan.com
BELIN McCORMICK, P.C.
By: fvV/wv/( cb11MUc ~rnr

Mark McCormick A 0005111
666 Walnut, Suite 2000
Des Moines, IA 50309
Telephone: (515) 243-7100
Fax: (515) 558-0615
Email : mmccormick@belinmccormick.com
OF COUNSEL:
QUINN EMANUEL URQUHART &

SULLIVAN, LLP
Christopher Tayback
Daniel Posner
865 S. Figueroa Street, 1Oth Floor
Los Angeles, CA 900 17
(213) 443-3000
christayback@quinnemanuel.com
danposner@quinnemanuel.com
ATTORNEYS FOR PLAINTIFF BELLE OF

SIOUX CITY, L.P.
03375.23641/6121163.1 {02025391.DOC} 20
PROOF OF SERVICE
The undersigned certifies that the foregoing
instrument was served upon the parties to this
action by s.erving a copy u~geach; of the. j_
attorneys hsted below on _A~ / ¥ ,
2014 by
0 U.S. Mail 0 FAX
o Hand Delivered )( Electronic Mail
0 FedE:x/ D
Overnight EDMS
Carrier
Jeffrey C. Peterzalek Douglas L. Phillips Guy Cook

John R. Lundquist Ryland Deinert Joseph F. Moser
Assistant Attorney General KlassLaw Firm Shannon L. Sole
Hoover Building, Second 4280 Sergeant Road Patrick J. McNulty
Floor Mayfair Center, Suite Grefe & Sidney, P.L.C.
Des Moines, IA 50319 290 500 East Court Avenue,
J effrey.Peterzalek@iowa.gov Sioux City, IA 51106 Suite 200
J ohn.Lundquist@iowa.gov phillips@klasslaw. com P. 0. Box 10434
deinert@klasslawfirm. Des Moines, IA 50306
com gcook@grefesidney.com
jmoser@grefesidney.com
ssole@grefesidney.com
pmcnulty@grefesidney
03375.23641/6121163.1 {0202539I.DOC} 21
E-FILED 2014 JUL 14 1:23PM POLK- CLERK OF DISTRICT COURT
IN THE IOWA DISTRICT COURT IN AND FOR POLK COUNTY
BELLE OF SIOUX CITY, L.P.,

Case No.: CVCV047791
Petitioner,
RULING ON PETITION FOR JUDICIAL
v. REVIEW AND ON EMERGENCY
MOTION FOR STAY
IOWA RACING AND GAMING

COMMISSION,
Respondent
Hearing on petitioner, Belle of Sioux City, L.P.'s, motion for emergency stay was held
June 26, 2014. The court granted a short-term stay to allow the parties time to brief and argue
the merits of the judicial review petition. The court also allowed Missouri River Historical
Development, Inc. ("MRHD") and SCE Partners, L.P. to intervene in this action.
Argument on the merits of the petition for judicial review was held July 10, 2014. This
ruling addresses the merits of the judicial review petition, as well as the request for a temporary
stay of agency action.
The court concludes that the petition for judicial review should be dismissed, and that
petitioner is not entitled to a stay.
Introduction
This is a judicial review action of a final contested case decision of the Iowa Racing and
Gaming Commission which denied Belle's application for renewal of a casino gambling license.
(Ex. 6, C.R. 412). The application sought to renew a riverboat gambling license for the Argosy
Casino in Sioux City for the period April 1, 2013 to March 31, 2014. The license application
was denied by the Commission at a meeting on August 15, 2013. (C.R. 25).
EXHIBIT
I A
Belle sought a contested case hearing of the Commission's decision. (C.R. 29).
Following the hearing, the Commission held that "Belle is statutorily ineligible to hold a license
to conduct gambling games and cannot be granted a license to operate the excursion boat in
absence of an operating agreement with a [Qualified Sponsoring Organization] licensed to
conduct games at this location." (C.R. 1219). The Commission ordered that gambling at the
Argosy Casino cease on or before July 1, 2014. (!d.).
MRHD is a nonprofit entity that has been licensed as the qualified sponsoring
organization, or QSO, for the Argosy Casino since it opened. Iowa law requires every casino to
have a QSO licensed by the Iowa Racing and Gaming Commission, which dispenses a portion of
the profits to civic and charitable causes. Since 2004, MRHD and Belle were licensed by the
Iowa Racing and Gaming Commission to conduct and operate gambling at the Argosy Casino.
In 2012 the Commission expressed an interest in having a new land-based casino in Woodbury
County. MRHD and Belle had a falling-out during this time. Belle and MRHD each partnered
with a different organization and applied to obtain the licenses for the new casino. The Racing
and Gaming Commission made it clear since at least June of 2012 that before the new casino
opened, the Argosy would have to close - i.e. that there would be only one casino in Woodbury
County. In April 2013, the Commission awarded a license to MRHD and SCE Partners for a
new Hard Rock Casino to be built in downtown Sioux City. The Hard Rock Casino is scheduled
to open August 1, 2014.
Belle argues that the Commission's decision to deny its license renewal because MRHD
is no longer licensed to conduct gambling at the Argosy riverboat casino, is not supported by
substantial evidence and is arbitrary and capricious, that the Commission failed to give adequate
notice to Belle of the issue to be determined at the contested case hearing, that the Commission
unfairly limited the issues at the contested case hearing, and that the Commission's interpretation
of law is erroneous.
2
Statement of the Case
Belle submitted a license renewal application to operate the Argosy Casino in December
2012. This was for the period of April 1, 2013 -March 31, 2014.
The Commission denied the license application at its regular meeting August 15, 2013.
(C.R. 25). IRGC Administrator Brian Ohorilko notified Belle of the denial in a letter dated
August 27, 2013. This letter states, in part, that Iowa law requires an operator of a casino (such
as Belle) to partner with a Qualified Sponsoring Organization (QSO) licensed by the
Commission to conduct gambling games at an excursion gambling boat. (C.R. 25). It notes that
MRHD is the QSO licensed to conduct gambling games at Argosy Casino, and that the operating
agreement between MRHD and Belle expired as of July 6, 2012. !d. The letter also states that
Belle submitted an application in December 2012 for an operator's license, but because the
operating agreement with MRHD had expired, "Belle is no longer statutorily eligible to operate
the Argosy Casino." (C.R. 25).
Belle requested an evidentiary contested case hearing on the Commission's decision "to
deny the Belle's December 31, 2012 request for renewal of its operator's license for the
operation of Argosy Casino in Sioux City." (C.R. 29). The notice of hearing issued by the
IRGC states, "The hearing shall address the following issues cited by the Commission for the
denial of the Belle of Sioux City, L.P.'s ("Applicant") application for renewal of its operator's
license for the Argosy Casino in Sioux City:
Whether the Applicant's lack of an operator's agreement with a qualified

sponsoring organization that is presently licensed to conduct gambling games at
the Argosy Casino in Sioux City, Iowa, precludes renewal of the Applicant's
license to operate the Argosy Casino. See Iowa Code§ § 99F.3, 99F.4, 99F.5(1),
99F.6(1), 99F.7; 491 Iowa Admin Code§§ 1.7. 5.1, 5.4."
(C.R. 62).
A contested case hearing was held before the Commission on March 5-6, 2014, with
assistance of Administrative Law Judge Christie Sease. On April 17, 2014, the Commission
3
issued its contested case ruling, which denies Bell's license renewal application submitted in
December 2012, and orders the casino to close by July 1, 2014. (C.R. 1209-1219). The
Commission held that Belle did not have a qualified sponsoring organization because MRHD
was no longer licensed to conduct gambling at the Argosy Casino.
Belle requested a rehearing before the Commission, which was denied by operation of
law on May 12, 2014. Belle then filed a bankruptcy proceeding in Pennsylvania, where its
parent corporation is headquartered, seeking protection of the automatic stay. The bankruptcy
judge held that the litigation in Iowa district was not subject to the automatic stay.
Belle filed the present judicial review action June 12, 2014. Belle also requested an
administrative stay from the Commission. The Commission held a special meeting to consider
the stay request on June 25, 2014. The Commission denied the request for stay. This court held
a hearing on the request for temporary stay on June 26. The court issued a short-term stay until it
could hear arguments and rule on the merits of the judicial review petition. The parties agreed to
an expedited briefing schedule, and argument on the judicial review petition was held July 10,
2014.
Belle has previously filed four judicial review cases in Polk County District Court. These
four actions were not appeals from contested case decisions, but rather they challenge a series of
actions by the IRGC in 2012-2013 which Jed to the disapproval of the operating agreement
between Belle and MRHD in 2012, and the issuance of the new license for a land-based Hard
Rock Casino. The prior four actions have been consolidated under one Polk County case
number, CVCV009254. In a separate case Belle is suing MRHD for damages for breach of
contract. (Polk County Case No. LACL126161.) In February 2014, following a remand from
the Iowa Supreme Court, this court denied a motion for temporary stay of the issuance and
4
effectiveness of the new license issued for the Hard Rock Casino. The current motion for
emergency stay presents a different but related issue -whether the Argosy should be allowed to
remain open pending the final decision in this case.
The IRGC allowed the Argosy Casino to remain open while the new casino is under
construction. IRGC, MRHD, and SCE Partners resist the application for emergency stay.
Background
An overview of Iowa's gambling statute and regulations is helpful to provide a backdrop
to the issues in this motion.
Gambling in Iowa is regulated by the IRGC. See Iowa Code Chapter 99F. Since the
mid-1980s, the legislature has incrementally expanded the types and scope of gambling allowed
in the state. Gambling has gone from betting on horse and dog races to excursion riverboats with
a $200 per day limit, to slot machines at racetracks, to moored boats, and finally, to land-based
structures that are not associated with racetracks or boats. (See Chronology of the Iowa Racing
and Gaming Commission, C.R. 592). The last major expansion of gambling occurred in 2007,
when the legislature allowed land-based casino gambling at structures outside of boats, moored
barges, or racetracks. See 2007 Iowa Acts, Chapter 188 (Senate File 263 ).
Each gambling venue in Iowa must have a licensed "Qualified Sponsoring Organization"
or QS0. 1 Iowa Code§ 99F.5. "Qualified Sponsoring Organization" is defined as a tax-exempt
nonprofit corporation. Iowa Code § 99F.1(20). The Qualified Sponsoring Organization must
donate the profits it receives to educational, civic, public, charitable, patriotic, or religious uses.
Iowa Code§ 99F.6(4)(a)(2). A QSO may directly operate the riverboat or casino, or it may use a
professional operator. See Iowa Code Section 99F.5. If an operator is used, the operator must
1
In the other judicial review actions, Belle challenges that the statute requires a QSO. At the July I 0, 2014 hearing,
Belle's attorneys stated they have not abandoned that argument, but do not believe they need to assert the argument
in this action.
5
also be licensed by the IRGC. Id. Under such an arrangement, the Qualified Sponsoring
Organization receives a minimum of three percent of adjusted gross receipts. Iowa Code §
99F.5. MRHD was the licensed QSO for the Argosy riverboat casino. Belle was the licensed
operator.
IRGC interprets Chapter 99F to state that a Qualified Sponsoring Organization holds a
license to "conduct" gambling, and an operator holds a license to "operate." This interpretation
is supported by Iowa Code Section 99F.5(1). That section states a QSO may apply for a license
to "conduct" gambling games, and a person may apply for a license to "operate" gambling. Thus
MRHD held the license to conduct riverboat gambling in Woodbury County, and Belle held the
license to operate riverboat gambling in that county. (Belle agreed with this interpretation in its
December 2011 license renewal application. (C.R. 393)).
Facts
The court incorporates the findings of fact set forth in the contested case decision at
pages 121 0-15 of the Certified Record. The court has reviewed the entire Certified Record, and
the agency's fact findings are thorough and accurate (and, save one matter, are not challenged by
petitioner). The court sets forth the following facts, which are of particular importance to this
ruling:
1) MRHD was licensed to conduct gambling as QSO for the Argosy Casino since 1994.
(Ex. 2, C.R. 377). During the early years there was a different operator.
2) In 2004 Belle obtained the license to operate the Argosy Casino, and Belle and
MRHD entered into an operating agreement. (Ex. 2, Am. to Operating Agreement,
C.R. pp. 388-89). Belle is a subsidiary of Penn National Gaming, a large national
organization that operates casinos in several states.
6
3) Belle and MRHD extended their operating agreement several times. The final
extension was to July 6, 2012. (Ex. 2, C.R. 391).
4) After the initial three years, a casino license must be renewed annually. Applications
are filed in December for the license period of April 1 to March 31 of the coming
year. Belle and MRHD filed a joint application in December 2011 for the license
period of April1, 2012 to March 31,2013.
5) The cover page of the joint 2011 gambling license application states:
Although this license renewal application covers the entirety of the time period from
April I, 2012 to March 31, 2013, the co-licensee/co-applicants, Missouri River
Historical Development, Inc. (qualified sponsoring organization) and Belle of Sioux
City, L.P (operator) acknowledge that they currently have an operating agreement in
effect through July 6, 2012 as provided herein and that renewal or extension of an
operating agreement pursuant to Iowa code Chapter 99F through the applicable time
period of the requested license is necessary. Missouri River Historical Development,
Inc. and Belle of Sioux City, L.P. represent to the Iowa Racing and Gaming
Commission (Commission) that negotiations to complete the terms of that
agreement/extension are ongoing and they have reason to believe that the same will
be finalized on or before the meeting of the Iowa Racing and Gaming Commission on
March 8, 2012 when the matter of this license renewal application will come before
the Commission for action. The Commission will be kept advised of the progress of
the parties and a copy of the renewal/new operating agreement will be provided to the
Commission as soon as possible.
(Ex. 4, C.R. 393).
6) At the March 2012 Commission meeting, MRHD and Belle reported that they had not
finalized an operating agreement. The process was slowed by both Belle's and
MRHD's desire to build a new, land-based casino in Woodbury County. The
Commission approved a license renewal for MRHD and Belle for the Argosy Casino,
conditioned upon the parties submitting a new operating agreement by June 7, 20 12
(the Commission's meeting date for that month). (Ex. U, C.R. 654).
7) MRHD had signed off on an extension to the operating agreement with Belle by the
time of the June 7, 2012 Commission meeting, but Belle refused to sign the extension
7
to the agreement. (See Ex. A, C.R. 499). This document is titled "Extension
Agreement," and states that it extends the operating agreement to March 31, 20 15.
ld. It further states it is "subject to approval of the Iowa Racing and Gaming
Commission." (Ex. A, C.R. 499). The Commission has never approved this
extension. (See C.R. 495-96, 498, 624-26).
8) At the June 7, 2012 meeting, Belle's attorney told the Commission that Penn has
spent hundreds of thousands of dollars exploring a new downtown site for a casino.
(C.R. 492). He said Belle wanted to seek approval to renew the Argosy's gambling
license with a new non-profit organization, and MRHD had a plan to replace Belle as
operator. (Ex. 13, C.R. 493). It was noted that MRHD had sued Belle in federal
court. After considerable discussion from the Commission and comments from the
parties concerning a new land-based casino, the Commission voted to open up an
application process for a new land-based casino in Woodbury County that would be
open to all. (C.R. 496).
9) At the June 7, 2012, meeting, the Commission also voted to extend the license for the
Argosy Casino to March 31, 2013, on the condition that the parties agree to extend
the operating agreement to that date. C.R. 496-97. It was stated at that meeting, and
at subsequent meetings, that the Argosy's license would not be valid after the new
casino opened. (See C.R. 496).
10)After the June 7, 2012 meeting, Belle signed the operating agreement extension (to
2015) it had refused to sign prior to the Commission meeting. (See Ex. A, C.R. 499.)
At several subsequent meetings, Belle asked the Commission to approve the
operating agreement extension. At the August 24, 2012, Commission meeting,
8
Belle's attorney asked for an extension to 2015 "as the parties continue to work
through a transition to what everyone wants, which is land-based gaming in Sioux
City." (C.R. 514). However, at this same meeting, MRHD's representative told the
Commission there was not a signed, agreed-upon extension agreement as far as
MRHD was concerned. (C.R. 517). Belle's one-sided request for the Commission to
consider an extension of the operating agreement failed for lack of a motion. See Id.
II) At the August 2012 meeting, the Commission's vice chair told Belle that there was no
agreed-upon operating agreement, and that the casino could not operate without one.
(C.R. 517). He stated they were in uncharted territory, but that he believed the
license would continue by operation of law pursuant to Iowa Code § 17A.18(2).
(C.R. 518). IRGC Administrator Ohorilko agreed with this statement. (C.R. 519).
12)As the end of 2012 approached, Belle's legal counsel contacted the IRGC staff to
inquire about submitting a license application for 2013-14. Administrator Ohorilko
advised Belle's counsel it was not necessary to file a renewal application, as the
casino was operating "by operation of law" under Section 17A.18. (All the parties
were preparing proposals for the new land-based casino during this time.)
13) Nevertheless, Belle submitted a license renewal application in December 2012. (Ex.
6, C.R. 412). The cover page of this license application states:
Although the Iowa Racing and Gaming Commission (IRGC) has not provided a
renewal application form to Belle of Sioux City, L.P. (Belle), the following renewal
items are submitted by Belle for the April 1, 2013 to March 31, 2014 licensing year.
The documents requested in Section VI(F) with regard to the qualified
sponsoring organization are not included in this submission; however, the
Commission is referred to the license renewal application for April I, 2012 to March
31, 2013. Furthermore, the information in Section VI(C) reflects Belle's
contention and position with regard to the status and expiration date of the
management agreement although it acknowledges that the same are in
controversy.
9
(Ex. 6, C.R. 412) (emphasis added). This application is signed only by Belle. MRHD
did not sign off on it, and MRHD refused to sign the December 2012 license renewal
application for the Argosy Casino. (Ex. 6, C.R. 430; C.R. 856-57, 902 (Monson
testimony)).
14) MRHD is the only licensed QSO approved by the Iowa Racing and Gaming
Commission for Woodbury County.
15) Belle continued to operate the Argosy riverboat casino after the August 2012
Commission meeting. It also submitted two applications to operate a land-based
casino in Woodbury County. These were submitted with a different nonprofit agency
which sought licensure as the QSO. MRHD submitted an application to conduct
gambling at a new land-based casino with SCE Partners as operator. A fourth
application was received from Ho Chunk/Warrior Entertainment and another
nonprofit entity. The Commission voted 3-2 at its April 2013 meeting to grant the
new license for Woodbury County to MRHD and SCE for a Hard Rock Casino to be
located in downtown Sioux City.
16) Belle did not seek a contested case hearing before the Commission concerning any of
the Commission's actions described above. Rather it filed a series of judicial review
actions in Polk County District Court:
a) On July 6, 2012, Belle filed a judicial review action challenging the Commission's
June 7, 2012, decision to accept new applications to build a land-based casino in
Woodbury County, and all other adverse actions taken regarding Belle's license.
(Polk County No. CVCV009254).
10
b) On August 10, 2012, Belle filed a judicial review action challenging the
Commission's July 12, 2012 refusal to grant formal approval of an extension of the
operating agreement between Belle and MRHD to 2015, and an appeal from the
setting of procedures and deadlines for interested parties to submit plans to build and
operate a new land-based casino in Woodbury County (Polk County No.
CVCV009316);
c) On September 21, 2012, Belle filed a third judicial review action challenging
Commission's August 23, 2012, refusal to grant formal approval of the operating
agreement extension between Belle and MRHD to March 31, 2015, an appeal from
IRGC's establishing a time frame for procedures to hold a show cause hearing on
denying Belle's license to operate a riverboat casino, and all other adverse actions
taken regarding Belle's license (Polk County No. CVCV009383).
d) On October 9, 2012, Belle filed a fourth judicial review action challenging the
Commission's April 18, 2013, decision to grant the Woodbury County gaming
license to SCE and MRHD for the Hard Rock Casino, and also challenging the
decision that the Belle riverboat casino would close upon the opening of the new
land-based Hard Rock Casino (Polk County No. CVCV045760). This petition asserts
the Commission's actions were a de facto revocation of its license.
f) The four actions are consolidated under Polk County case number CVCV009254.
Evidentiary hearing and oral argument are scheduled for September 26, 2014.
17) Also on September 21, 2012, Belle sued MRHD in Polk County District Court for
declaratory relief, injunctive relief, and damages arising out of an alleged breach of
the operating agreement between Belle and MRHD. (Polk County No.
LACL126161). MRHD has counterclaimed for interference with prospective
II
business advantage. Trial in that matter has been continued indefinitely, at the
request of both parties.
18)At a meeting on August 15, 2013, the Commission took up the matter of Belle's
December 2012 license renewal request. (Ex. N, C.R. 564 et seq). The Administrator
noted that Belle does not have an operating agreement with a qualified sponsoring
organization licensed to conduct gambling games at the Argosy location, as required
by the Code of Iowa. (C.R. 565). He opined that Belle is not statutorily able to hold
an operator's license in the state of Iowa. (C.R. 565). Mr. Ohorilko stated that the
recent application process showed MRHD has no present intention to re-affiliate with
Belle. (C.R. 566-67). Belle's legal counsel addressed the Commission. (C.R. 569-
74). He stated that the lack of a QSO was a pretext to non-renew or revoke Belle's
license. (C.R. 572). He called MRHD a "pass through entity." C.R. 572. He
acknowledged that MRHD apparently does not want to partner with Belle as a QSO,
and stated that Belle has another nonprofit group that could be a potential QSO.
(C.R. 573-74).
19) At the August 15, 2013 meeting, the Commission passed a motion "to deny Belle of
Sioux City, L.P. 's application to renew its operator's license for the Argosy Casino in
Sioux City based on the fact that Belle is statutorily ineligible to hold a license in the
absence of an operator's agreement with a qualified sponsoring organization." (C.R.
442, 443). Belle requested a contested case hearing. The notice of hearing issued
November 27, 2013 , states the issue for hearing is, "Whether the Applicant's lack of
an operator's agreement with a qualified sponsoring organization that is presently
licensed to conduct gambling games at the Argosy Casino in Sioux City, Iowa,
12
precludes renewal of the Applicant's license to operate the Argosy Casino." (C.R.
62).
20) Prior to hearing, Belle filed a motion to stay the hearing because the status of the
operating agreement with MRHD was in litigation. (C.R. 70). Belle argued the issue
of the validity of the operating agreement was not ripe. (Id., See also Belle's Motion
to Continue Hearing, C.R. 164). On January 31, 2014, the ALJ denied the motion to
stay the contested case hearing, stating the issue to be determined at hearing was not
the status of the operating agreement, but whether MRHD was a QSO presently
licensed to conduct gambling at the Argosy Casino. (C.R. 122-25).
21) The contested case hearing was held March 5-6, 2014. The Commission issued its
order April 17, 2014. The Commission denied Belle's license renewal application
and ordered the Argosy Casino to close by July 1, 2014.
Additional facts will be set forth in the discussion below.
Standard of Review
This is a judicial review action of a contested case decision pursuant to Iowa Code
Chapter 17A. The court shall reverse, modify, or grant appropriate relief from agency action if it
determines that substantial rights of the person seeking judicial relief have been prejudiced
because the agency action violates any of the provisions of Iowa Code Section 17A.l9(1 0).
Belle argues that the agency's findings of fact are not supported by substantial evidence in the
record; that the agency's contested case decision is based upon an erroneous interpretation of a
provision of law whose interpretation has not clearly been vested by a provision of law in the
discretion of the agency; that the Commission's decision is the product of reasoning that it so
13
illogical as to render it wholly irrational; and that the Commission's action is unconstitutional, in
violation of Iowa Code Sections 19A.19(1 O)(f), (c), (i), and (a).
Administrative agencies may be granted the authority to interpret statutes or terms within
statutes by the General Assembly. Renda v. Iowa Civil Rights Com 'n, 784 N.W.2d 8, 11 (Iowa
201 0). Agency interpretations made under these grants of authority are entitled to deference
from courts. !d. However, when an agency is not granted authority to interpret a statute, a court
may substitute its interpretation or judgment for that of the agency if it concludes that the agency
erred in its legal interpretation. Iowa Code § 17A.l9(1 0)(c); Renda, 784 N. W .2d at 14-15.
Substantial evidence means the quantity and quality of evidence that would be deemed
sufficient by a neutral, detached, and reasonable person, to establish the fact at issue when the
consequences resulting from the establishment of that fact are understood to be serious and of
great importance. IOWA CODE§ 17A.19(10)(f)(l). The adequacy ofthe evidence in the record
to support a particular finding of fact must be judged in light of all the relevant evidence in the
record that detracts from the finding as well as the evidence that supports it, including any
determinations of veracity by the presiding officer who personally observed the demeanor of the
witnesses and the agency's explanation of why the relevant evidence in the record supports its
material findings of fact. IOWA CODE § 17A.l9(10)(f)(3). The determinative factor is not
whether evidence supports a different finding, but whether the evidence supports the finding
actually made. IBP v. Al-Gharib, 604 N.W.2d 621, 632 (Iowa 2000). Evidence is not
insubstantial merely because it would have supported a contrary inference. !d.
Belle asserts that the Commission's ruling violates Iowa Code Sections 17A.19(10)(i),
(j), (m), and (n) (reasoning that is so illogical as to render it wholly irrational; the product of a
decision-making process in which the agency did not consider a relevant and important matter
14
relating to the propriety or desirability of the action in question that a rational decision maker in
similar circumstances would have considered; unreasonable, arbitrary and capricious; or an
irrational, illogical, or wholly unjustifiable application of law to fact). These subsections are
specifications of actions that have been found to be arbitrary, capricious, or an abuse of
discretion. Bonfield, "Amendments to Iowa Administrative Procedure Act, Report on Selected
Provisions to Iowa State Bar Association and Iowa State Government," p. 69 (1998). An
agency's action is arbitrary and capricious "when it is taken without regard to the law or facts of
the case." Dico, Inc. v. Iowa Employment Appeal Board, 576 N.W.2d 352, 355 (Iowa 1998).
Agency action is unreasonable when it is "clearly against reason and evidence." !d. An agency
abuses its discretion when its decision "involves [a] lack of rationality," and is "clearly against
reason and evidence." !d.
When a party raises constitutional issues in an administrative agency proceeding under
Section 17A.l9(1 0)( a), judicial review is de novo. ABC Disposal Systems, Inc. v. Dep 't of
Natural Resources, 681 N.W.2d 596, 605 (Iowa 2004).
I. JUDICIAL REVIEW PETITION
Belle's arguments in support of its petition for judicial review are addressed below.
Substantial Evidence. Belle asserts a fact finding of the Commission is not supported by
substantial evidence. In its brief on the motion for emergency stay, Belle challenged only one
statement in the Commission's order as not supported by substantial evidence, "IRGC's
erroneous factual determination that MRHD let its license to conduct gambling games at the
Argosy Casino expire on April1, 2013. (Order at 10 [C.R.l218])." (Belle's Stay Br. p. 8). In
its brief on the merits, Belle challenges the following language in the Commission's order as not
supported by substantial evidence: "MRHD made a conscious decision not to apply for renewal
15
of its license to conduct games at the Argosy Casino" and "the license for MRHD for that
location has expired." (Belle's Br. on Jud. Rev, p. 29, citing C.R. at 1215, 1218).
One problem with this argument is that the statement at C.R. 1218 that MRHD's license
has expired is not a finding of fact, but rather is a conclusion of law. This statement is not
contained in the five pages of fact findings in the order, but near the end in the conclusions of
law. (C.R. 1218). The substantial evidence test is not applicable to this statement.
Moreover, Belle mischaracterizes the Commission's conclusion by saying MRHD "let its
license" expire. The actual language in the Commission order states, "MRHD chose not to seek
renewal of its license to conduct gambling games at the Argosy Casino for the 2013-2014
licensing year and the license MRHD held for that location expired." (C.R. 1218). Insofar as it
contains a factual statement - that MRHD chose not to seek renewal of its license for the
Argosy for the 2013-2014 license period- it is supported by substantial evidence in the record.
(See Ex. 6, C.R. 412-436; Monson testimony at C.R. 855-56; 902). MRHD president Mike
Monson testified that Belle asked MRHD to sign the December 2012 renewal application, but
MRHD refused to sign. (C.R. 855-56, 902). The court has considered evidence to the contrary,
but concludes Belle has not proven that this statement is not supported by substantial evidence
when the record is viewed as a whole.
Belle also argues that if this statement is a conclusion of law, it violates Iowa Code
Sections 17A.19(1 O)(i), (j), (m), and (n). (Belle's Br., p. 29, n 8). These are the provisions
providing relief from agency action that is arbitrary and capricious, or an abuse of discretion.
Because casino licenses must be renewed annually, and because MRHD's president testified
MRHD chose not to seek renewal of its license for the Argosy Casino for the 2013-14 license
year, it is not irrational for the Commission to conclude that MRHD's license to conduct
gambling games at the Argosy Casino had expired. In December 2012, Belle submitted a license
16
renewal application without a licensed QSO. Belle asked MRHD to sign off on the December
2
2012 license renewal application, and MRHD refused to do so. Petitioner has not proven a
violation of Sections 17A.19(1 O)(i), G), (m), or (n).
The court addresses whether MRHD's license to conduct gambling at the Argosy Casino
continued by operation of law under Iowa Code Section 17A.18(2) in the next section of this
ruling.
Section 17A.J8(2). Belle argues the Commission erred in its interpretation oflowa Code
Section 17A.l8(2). Belle argues the Commission's decision should be reversed because it is
based on an erroneous interpretation of a provision of law whose interpretation has not clearly
been vested by a provision of law in the discretion of the agency, in violation of Iowa Code
Section 17A.19(1 0)( c), and is the product of reasoning that is so illogical as to render it wholly
irrational, in violation oflowa Code § 17A.19(1 O)(i). Section 17A.l8(2) allows a license issued
by an administrative agency to continue by operation of law under certain circumstances.
Section 17A.18 is not a statute whose interpretation is vested by a provision of law with the Iowa
Racing and Gaming Commission, therefore the Commission's interpretation ofthis statute is not
entitled to deference. See Iowa Code § 17A.l9(11 ); Renda v. Iowa Civil Rights Com 'n., 784
N.W.2d 8, 13-14 (Iowa 201 0).
Belle argues that it was not required to submit the renewal application for 2013-14,
because its license continued by operation of law under Section 17A.l8(2). It also argues
MRHD's license to conduct gambling at the Argosy Casino continues by operation of law;
therefore MRHD did not need to sign off on the December 2012 license renewal application.
Section 17A.18(2) states:
2
MRHD appears in this case, and asserts that it does not hold a license to conduct gambling at the Argosy Casino.
17
2. When a licensee has made timely and sufficient application for the renewal of a
license or a new license with reference to any activity of a continuing nature, the
existing license does not expire until the application has been finally determined
by the agency, and, in case the application is denied or the terms of the new
license limited, until the last day for seeking judicial review of the agency order
or a later date fixed by order of the agency or the reviewing court.
Iowa Code § 17A.l8(2).
Belle points out that the IRGC informed Belle and MRHD in 20 12 that their licenses
would continue by operation of law under Section 17A.l8(2); that the IRGC staff informed Belle
it need not apply for a renewal license in December 2012 because the joint license would
continue by operation of law; that Assistant Attorney General Jeff Peterzalek told Belle to
remove references to "renewal application" in its draft letter submitted in December 2012; and
that Belle was never informed that MRHD' s license would expire on March 3 I, 2013.
The Commission acknowledges in its ruling that Commission members and IRGC staff
informed MRHD and Belle that their licenses for the Argosy Casino would continue by
operation of law through the 2013-2014 licensing year. (C.R. 1213, 1214, 1218). The
Commission's ruling, however, concludes that this advice was apparently incorrect because the
prior year's application- submitted in December 2011 -did not contain an operating agreement
for the full licensing year; therefore the license application submitted in December 20 II was not
a "sufficient" application within the meaning of Section 17A.l8(2). (C.R. 1218-1219). The
Commission reasoned that if the December 2011 application was not "sufficient," it would not
trigger the stay provision of Section 17A.18(2).
The Commission contested case ruling states:
Given that the 2012-2013 renewal application submitted by MRHD and Belle did
not include an operating agreement for the entire term of the licensing year, that
application was arguably insufficient to trigger continuation of the prior licenses
by operation of law under section 17A.l8(2). In August of 2012 and during the
months that followed, the Commission and the parties assumed that the Argosy
Casino licenses remained in effect by operation of law under this section. The
Commission may have erred in allowing gambling to continue at the Argosy
Casino, but if so, the error was harmless: employees of the casino continued
18
working; patrons continued to frequent the excursion boat; three percent of the
adjusted receipts continued to be distributed for educational charitable purposes;
and Belle and Penn National Gaming continued to generate profits.
(C.R. 1218-2019).
Belle has not proven this is an erroneous interpretation of law, nor that it is wholly
irrational. Section 17A.18(2) states that when "sufficient" application has been made, a license
may continue until final determination by the agency. The Commission's contested case ruling
states the 2012-2013 application was not sufficient because of the lack of an operating agreement
for the entire term of the licensing year. (C.R.1218). This interpretation is not erroneous.
Iowa Code Section 99F.5 states that a QSO may apply for a license to conduct
gambling games, and a person may apply to the commission for a license to operate a gambling
facility. It goes on to state, "An operating agreement entered into on or after May 6, 2004,
between a qualified sponsoring organization and an operator of an excursion gambling boat or
gambling structure shall provide for a minimum distribution by the [QSO] for educational, civic .
. . uses ... that averages at least three percent of the adjusted gross receipts for each license year.
The application shall ... be in a form and contain information as the commission prescribes."
Iowa Code§ 99F.5(1). Implicit in this Code section is a requirement that a Qualified Sponsoring
Organization and an operator will have an operating agreement. The Code section also gives
IRGC broad discretion to determine what information should be in an application for a gambling
license. IRGC rules require approval of all agreements between QSOs and operators. 491 I.A.C.
§ 5 .4(8). In addition, Belle admits in the 2011 license application that an operating agreement is
a requirement for a license. (C.R. 393). The court concludes that the IRGC is correct in
interpreting the law to require an operating agreement between a QSO and an operator for the
entire term of a licensing year. Thus the Commission is also correct when it concludes the 20 11
19
application was not "sufficient" under 17A.18(2) because of the lack of an approved operating
agreement that extended throughout the entire licensing year.
At the time the parties applied for licenses for 2012-2013, their operating agreement
was set to expire in July 2012. The Commission conditionally approved licenses for the Argosy,
with the requirement MRHD and Belle submit a new operating agreement by the June 7, 2012
Commission meeting. MRHD signed off on an operating agreement prior to the meeting. Belle
did not.
At this point, the Commission opened up an application process for a new land-based
casino in Woodbury County. The Commission stated its intention that the Argosy riverboat
would close when the new facility opened. Belle partnered with a new QSO and submitted two
proposals. MRHD partnered with SCE and submitted a proposal. In April2013 the Commission
selected the MRHD/SCE proposal. However, it allowed the Argosy to continue to operate until
the new casino opened.
IRGC Administrator Ohorilko described the license application process for the Argosy
as "unprecedented." (C.R. 955). The court agrees the situation was unusual. The Commission
told Belle not to submit a license renewal for 2013-2014, because its license would continue by
operation of law. Belle nevertheless submitted a license renewal application. MRHD had
completely withdrawn from the process. MRHD did not co-sign the application submitted for
2013-2014. It did not seek renewal of its license to conduct gambling at the Argosy. The
Commission denied Belle's application because of the lack of a licensed QSO for the Argosy.
Following the contested case hearing, the Commission determined it apparently erred in
informing Belle the casino could operate under Section 17A.18(2). Although unusual, the
Commission's interpretation of Section 17A.l8(2) is correct.
20
The Commission stated that if it had decided in 2012 that the Argosy's application for
2012-2013 was not "sufficient" under Section 17A.l8(2), the result would have been an order to
close the casino earlier. Belle was not harmed by this interpretation. If there was error it was
harmless. In a judicial review action, the court may grant relief from agency action if it
determines "that substantial rights of the person seeking judicial review have been prejudiced."
Iowa Code § 17A.l9(10). Belle has not proven it was prejudiced by an erroneous interpretation
of law, or by wholly irrational reasoning, because the result of the allegedly erroneous
interpretation was to allow it to continue to operate longer than it should have.
For the reasons set forth above, the court rejects this argument.
Section 99F. Belle argues the Commission's order conflicts with Section 99F.3. Belle
argues the Commission's decision should be reversed because it is based on an erroneous
interpretation of a provision of law whose interpretation has not clearly been vested by a
provision of law in the discretion of the agency, in violation of Iowa Code Section
17A.l9( I 0)(c), and is the product of reasoning that is so illogical as to render it wholly irrational,
in violation oflowa Code § 17A.l9(1 O)(i).
Iowa Code Section 99F.3 states, "[t]he system of wagering on a gambling game as
provided by this chapter is legal, when conducted on an excursion gambling boat, gambling
structure, or racetrack enclosure at authorized locations by a licensee as provided in this
chapter." Belle argues the Commission's interpretation of Section 17A.l8(2) is in conflict with
this section, in that it would allow gambling to continue at a facility that did not have a valid
QSO licensed to conduct gambling therein.
21
This is similar to the argument presented in the preceding section. Again, if the
Commission erroneously allowed Belle to remain open longer than it should have, Belle's rights
were not prejudiced, and it has not shown a violation of Iowa Code Section I 7A.19(1 0).
Alleged Violation of Constitutional Rights. Belle next argues that the agency action is
an unconstitutional violation of its due process rights. Iowa Code Section 17A.19(1 O)(a).
Belle argues it was denied a meaningful opportunity to be heard concerning the closing
of the Argosy Casino. The fundamental requirement of due process is the opportunity to be
heard at a meaningful time and in a meaningful manner. Silva v. Employment Appeal Board, 54 7
N.W.2d 232, 234 (Iowa Ct. App. I 996). The central requirements are notice and an opportunity
to be heard. !d. These principles apply to contested case proceedings. !d. The
Administrative Procedures Act requires parties to a contested case shall be given notice of
hearing, with a reference to the particular sections of statutes and rules implicated and a short
and plain statement of the matters asserted. Iowa Code § 17A.l2(2).
Concerning the actions of the Iowa Racing and Gaming Commission in 2012-2013,
Belle requested a contested case hearing only on the Commission's August 15, 2013 decision to
deny its gambling operator license for the 2013-2014 year. (C.R. 29). (Belle earlier sought
judicial review of the Commission's actions in 2012 and early 2013 that found its December
2011 application was insufficient, and that granted a new casino license to MRHD and SCE.
(See CVCV009254)). Belle's letter requesting a contested case hearing states, "[W]e write on
behalf of Belle of Sioux City, L.P. d/b/a Argosy Casino (the "Belle') to request a contested case
proceeding and evidentiary hearing on the decision of the Iowa Racing and Gaming Commission
(the "Commission"), as stated orally at the Commission meeting on August I 5, 2013 and in
writing in Mr. Ohorilko's August 27 letter, to deny the Belle's December 31, 2012 request for
22
renewal of its operator's license for the operation of Argosy Casino in Sioux City." C.R. 29
(emphasis added).
The notice of hearing in this contested case stated that the issue before the commission
was:

sponsoring organization that is presently licensed to conduct gambling games at
the Argosy Casino in Sioux City, Iowa, precludes renewal of the Applicant's
license to operate the Argosy Casino. See Iowa Code § § 99F.3, 99F.4, 99F.5(1),
99F.6(1), 99F.7; 491 Iowa Admin Code§§ 1.7. 5.1, 5.4.
(C.R. 62).
Now Belle argues it was denied due process because the Commission only considered the
denial of the application submitted in December 2012 for the 2013-2014 license. However,
Belle only requested a contested case hearing on the denial of its application submitted in
December 2012. The Commission cannot be faulted for not granting a hearing on a request that
was not submitted to it. There was no denial of due process in limiting the hearing to matter
raised by the applicant.
In reviewing the contested case record, the court concludes that Belle was not denied due
process. Holding a casino gambling license is a privilege, and the burden of proof to renew a
license is on the applicant. 491 I.A.C. § 5.1. At the contested case hearing Belle submitted
exhibits, but did not call any witnesses. The State called three witnesses, who were subject to
cross-examination by Belle's counsel. Belle was given the opportunity to present exhibits, to
call witnesses, and to cross-examine witnesses. The notice of hearing contained a fair
description of the issues to be heard. Belle received a fair hearing.
Belle also argues it was not aware that the status of MRHD's license for the Argosy
Casino would be the focus of the contested case hearing. Belle argues that it believed the issue
23
would be whether there was a valid operating agreement with MRHD, and that it received
insufficient notice that MRHD's licensure for the Argosy would be at issue. The court rejects
this argument. At the August 15, 2013 meeting, Belle's counsel argued that a QSO is a mere
"pass through entity," and that the lack of a QSO was a pretext to non-renew or revoke Belle's
license. (C.R. 572). He also acknowledged that MRHD apparently does not want to partner with
Belle as a QSO, and stated that Belle has another nonprofit group able to act as its QSO. (C.R.
573-74). This indicates Belle understood that the lack of a licensed QSO was an issue.
The notice of hearing for the contested case was issued November 27, 2013. It states that
the issue for hearing is: "Whether the Applicant's lack of an operator's agreement with a
qualified sponsoring organization that is presently licensed to conduct gambling games at the
Argosy Casino in Sioux City, Iowa, precludes renewal of the Applicant's license to operate the
Argosy Casino." (C.R. 62). This clearly sets forth the issue whether MRHD is presently
licensed to conduct gambling games at the Argosy Casino.
In December 2013, Belle moved to stay the contested case hearing until after resolution
of the pending litigation concerning the validity of the operating agreement with MRHD. (C.R.
70). Belle argued the Commission should not address the issue whether a valid operating
agreement existed between Belle and MRHD while that issue was in litigation in the courts. The
State resisted the motion on January 6, 2013, arguing that MRHD had allowed its QSO license
for the Argosy to lapse when it did not join in the December 2012 license renewal application,
that the casino could not operate without a licensed QSO, and therefore the Commission would
not need to reach the issue of the existence of an operating agreement between Belle and MRHD.
(C.R. 92). The administrative law judge denied the motion for stay on January 31, 2014. (C.R.
122). That ruling states the Commission could determine the issue whether there was a qualified
24
sponsoring organization that is presently licensed to conduct gambling games at the Argosy
Casino "without addressing the validity of the operating agreements between Belle and MRHD
or Belle and GSIA." (C.R. 125). The ALJ reasoned that the issues concerning the operating
agreement pending in district court in the other litigation need not be addressed by the
Commission. (C.R. 124-25). Thus the reason that the issue of the operating agreement was not
litigated to the Commission was based on Belle's argument that the Commission should not
address the matter while it was in litigation. This and several other pretrial motions made it clear
that the IRGC staff, as represented by the attorney general's office, intended to focus on
MRHD's license status at the contested case hearing. (See C.R. 122-24; 346).
At the contested case hearing, the State focused its case on whether MRHD was currently
licensed to conduct gambling games at the Argosy Casino. Belle argues it was denied due
process because the attorneys for the State shifted their argument away from whether there was a
valid operating agreement with MRHD, to whether MRHD was currently licensed. It is true that
the State's attorneys focused on the licensing status of MRHD. (See State's closing argument,
C.R. 1170). However, this is well within the issue set forth in the notice of hearing. The
attorneys for the State appear to have been trying to avoid an issue in litigation in the courts. See
Christiansen v. Iowa Bd of Educational Examiners, 831 N. W .2d 179, 190 (Iowa 2013)
(ordinarily filing a petition for judicial review with the district court divests an agency of
jurisdiction until the court remands the case). They focused on an issue within the notice of
hearing, as did the Commission in its ruling. Belle had ample notice that this would be the
position of the State at the contested case hearing. It has not proven a violation of due process.
The Commission's ultimate decision was that Belle's December 2012 license renewal
application for 2013-2014 was deficient, in that no QSO joined Belle in submitting the
25
application, and that Belle is not eligible to hold a license to conduct gambling at the Argosy
casino without a licensed QSO. (C.R. 1219). Belle had fair notice and opportunity to be heard
on this issue. It has not proven a denial of due process.
For the reasons set forth above, the petition for judicial review should be denied.
II. STAY APPLICATION
Belle seeks a temporary stay of the Commission's order. The court may grant a stay of
agency action only after considering and balancing the following factors:
1) Applicant's likelihood of success on the merits.
2) The extent to which applicant will suffer irreparable injury if relief is not granted.
3) The extent to which granting a stay will substantially harm other parties.
4) The extent to which the public interest justifies the agency's actions.
See Iowa Code § I 7A.l9( 5)(c). The applicant for a stay of agency action has the burden to show
the requirements for a stay, and must present evidence of the relevant statutory factors. Grinnell
College v. Osborn, 751 N.W.2d 396,403 (Iowa 2008).
As to the first factor, the court incorporates its ruling on the merits of the petition for
judicial review, and concludes Belle has not shown likelihood of success on the merits.
Therefore the court turns to the remaining elements of the request for temporary stay.
A. Irreparable Harm
The next factor is the extent to which Belle will suffer irreparable injury if a stay is not
granted. Iowa Code§ 17A.l9(5)(c). The loss of revenue, even if substantial, does not generally
amount to irreparable injury to support a stay of administrative agency action. Grinnell College
v. Osborn, 751 N. W.2d at 402. However, extreme circumstances of financial loss, even if
recoverable, can amount to irreparable injury. Id. This court previously found that Belle would
26
suffer irreparable harm if the casino were to close down. (See Polk County Case No.
CVCV009254, Ruling Following Limited Remand, p. 22-23, filed 2/24114). This is an instance
of extreme financial loss. While Belle has sued MRHD for breach of contract in another Polk
County Case (No. LACL 126161), even if successful, its opportunity to recover damages from
the nonprofit MRHD would be limited. Moreover, the casino will be closed, which is the
ultimate in extreme financial loss. Belle has shown irreparable injury.
B. The Extent to Which a Stay will Harm Other Parties
The third factor for a stay of agency action is the extent to which a stay will harm other
parties to the action. The Iowa Racing and Gaming Commission would be affected by a stay, in
that it would have to continue to regulate the Argosy Casino, and its decision to have one
licensed casino in Woodbury County will be in a state of flux. Gambling is a highly regulated
industry. See Iowa Code Chapter 99F. The Commission has a strong interest in seeing that its
licensing decisions are followed.
MRHD will be affected. Belle has stopped paying it the statutorily require three percent
of gaming profits. In addition, MRHD's agreement with SCE requires payment of 4.25 percent
of profits. If SCE's profits are diminished because another casino is operating nearby, the
percentage it pays to MRHD will be lower.
SCE will be harmed because it will have a competitor, and its profits will undoubtedly be
less than if it were the only casino in Woodbury County.
This factor weighs against granting a stay.
27
C. Public Interest
The court must next consider the extent to which the public interest justifies the agency's
action. There is a public interest in requiring gambling facilities to comply with the licensing
laws. This interest would be adversely affected if a stay is entered.
Belle's 260 employees will lose their jobs if the Argosy Casino closes. While it is
possible that many of them could be hired at the new Hard Rock Casino, which expects to hire
500 people, there will be an adverse effect on Belle's employees. By the same token, there is a
public interest in creating the 500 new projected jobs at the Hard Rock Casino. There is also a
danger that if the Argosy remains open after the Hard Rock is finished hiring new employees, the
Argosy employees will lose out on their ability to be hired by Hard Rock.
This factor does not weigh heavily in favor of either granting or denying a stay.
Conclusion
In conclusion, the court finds that Belle has not proven likelihood of success on the
merits of this case, or that the public interest favors granting a stay. Allowing the Argosy Casino
to remain open would be prolonging the inevitable. The court is aware of the effect this ruling
will have on the Argosy Casino and its current employees and patrons. However, in balancing
all the factors for a stay, the court concludes Belle has not proven it is entitled to a stay of the
Commission's contested case decision pending resolution of this litigation.
IT IS THEREFORE ORDERED that the petition for judicial review is dismissed, with
costs taxed to petitioner.
IT IS FURTHER ORDERED that petitioner's application for temporary stay is denied.
However, a stay will remain in effect for seven days after this ruling to allow petitioner time to
28
seek relief from the Iowa Supreme Court. If a new stay is not granted by the Supreme Court by
July 21, 2014, the Commission's order will go into effect as of July 22, 2014.
Dated July 14, 2014.
29
State of Iowa Courts
Type: OTHER ORDER
Case Number Case Title

CVCV047791 BELLE OF SIOUX CITY, L.P. V. IOWA RACING AND GAMIN
So Ordered
ak.~
Fifth judicial District of Iowa
Electronically signed on 2014-07-14 13:23:04 page 30 of 30

Before the Iowa Racing and Gaming Commission
Capitol Medical Office Building
1300 Des Moines, Street, Suite 100
Des Moines, lA 50309-5508
IN THE MATTER OF: )

) DIA Docket No. 13IRGC020
Belle of Sioux City, L.P. )
d/b/a Argosy Casino Sioux City )
100 Larsen Park Road ) Findings of Fact,
Sioux City, lA 51101 ) Conclusions of Law,
) Decision and Order
Applicant. )
)
Statement of the Case
Procedural background: Belle of Sioux City, L.P. (Belle), dfbfa Argosy Casino Sioux City,
filed a License Renewal Application with the Iowa Racing and Gaming Commission (IRGC)
on December 31, 2012, seeking renewal of its license for operation of Argosy Casino in
Sioux City for the period from April1, 2013 to March 31, 2014.
This application was taken up for action by the IRGC at the regular meeting of the
Commission on August 15, 2013. The IRGC unanimously passed a motion to deny Belle's
application for renewal of its operator's license for the Argosy Casino "based upon the fact
that Belle is statutorily ineligible to hold a license in the absence of an operator's
agreement with a qualified sponsoring organization." Written notice of the decision was
issued to Belle by IRGC Administrator Brian Ohorilko on August 27, 2013.
By letter filed with the IRGC on September 26, 2013, Belle requested a contested case
proceeding and evidentiary hearing on the decision to deny Belle's December 31, 2012
application for renewal of its license for the operation of the Argosy Casino. Notice issued
on November 27, 2013, scheduling a contested case hearing before the IRGC to commence
on March 5, 2014.
On December 10, 2013, Belle filed a request for appointment of an administrative law judge
employed by the Department of Inspections and Appeals to preside over the contested case
and render a proposed decision. This request was denied by Order issued by the IRGC
Administrator on December 27, 2013.
Administrative Law Judge Christie Sease was assigned, at the request of the IRGC, to render
initial rulings on prehearing matters, conduct a prehearing conference, and assist the
Commission at hearing and in drafting a written decision for the Commission. See 481
Iowa Admin. Code [lAC] 10.26. Subsequent prehearing motions were presented to and
ruled upon by ALJ Sease.
EXHIBIT
I B
Docket No. 13IRGC020
Page2
Hearing was held on March 5 and 6, 2014. The full Commission: Jeff Lamberti, Chair;
Richard Arnold; Carl Heinrich; Kristine Kramer; and Dolores Mertz; presided at the hearing.
Attorneys Daniel Posner, Christopher Tayback, Danielle Shelton, and Mark Weinhardt
appeared for the Applicant. Assistant Attorneys General John Lundquist and Jeffrey
Peterzalek represented the state. ALJ Sease assisted the Commission in conducting the
hearing.
At the start of hearing the Applicant renewed its request for an administrative law judge,
rather than the Commission, to serve as presiding officer for the hearing. The Commission
voted unanimously to deny the request, for the reasons set forth in the Order issued by
Administrator Ohorilko on December 27, 2013.
At the close of hearing the Commission convened in closed executive session to deliberate.
See Iowa Code§ 21.5(1)(t). Following deliberations, the Commission reconvened in open
session and directed the administrative law judge to prepare the decision in accordance
with its deliberations.
Issue Presented
The Notice of Hearing limited the scope of the hearing to a single issue:

sponsoring organization that is presently licensed to conduct gambling
games at the Argosy Casino in Sioux City, Iowa, precludes renewal of the
Applicant's license to operate the Argosy Casino. See Iowa Code§§ 99F.3,
99F.4, 99F.5(1), 99F.6(1), 99F.7; 491 Iowa Admin. Code§§ 1.7, 5.1, 5.4.
The Record
The following three witnesses testified at hearing: Lance George, Vice President and
General Manager of the Argosy Casino; Mark Monson, President of Missouri River
Historical Development, Inc.; and Brian Ohorilko, Administrator of the IRGC.
State's exhibits 1 - 13 were offered and admitted. Applicant's exhibits A, 8, C, D, H, I, J, K, L,
M, N, 0, P, Q, S, T, U, and Y were offered and admitted. Additional exhibits referenced
during testimony were not offered into evidence (Appellant's exhibit G) or were offered
and ruled inadmissible (Appellant's exhibit F), as detailed in the hearing transcript.
Findim~s of Fact
/RGC Licensing Process: The Iowa Racing and Gaming Commission is responsible for
licensing all gambling operations on excursion gambling boats in the state. Iowa Code
§ 99F.4 (2013). The authority of the IRGC includes the power to license a qualified
Page 3
sponsoring organization [QSO] to conduct gambling games on an excursion gambling boat

and to license any person to operate an excursion gambling boat. See Iowa Code§§
99F.1(2); 99F.4(2).
The IRGC has always viewed the license to conduct gambling games and the license to.
operate as two distinct licenses. Only a QSO may apply for a license to conduct gamblmg
games on an excursion gambling boat, which authorizes the QSO to directly operate the
excursion gambling boat or to contract with another entity to operate the boat. Any
person may apply for a license to operate an excursion boat, which authorizes the holder to
conduct all day-to-day operations of the excursion gambling boat on behalf of a QSO. Each
license to conduct gambling games and license to operate a gambling facility is issued for a
specific location and, historically, a single certificate of license to conduct gambling games
and operate the gambling facility has been issued by the IRGC. (Ohorilko testimony)
Initial licenses to conduct and operate gambling games are typically issued for a three-year
period. The licenses must be renewed annually thereafter. Renewal applications are due
on or before December 31st of each year, for a 12-month license-year beginning ApriJ1st of
the following year. The IRGC typically takes action on renewal applications at the March
Commission meeting. The IRGC Excursion Gambling Boat and Gambling Structure Renewal
License Application form in use for the 2012-13 and 2013-14licensing years was a joint
application form to be completed by the Applicant QSO and Applicant Operator, if a non-
QSO operator is being used. (Ohorilko testimony)
Background: Missouri River Historical Development, Inc. (MRHD) is an Iowa nonprofit

corporation and QSO, which may be licensed to conduct gambling games under Iowa Code
chapter 99F. In May of 1992, MRHD and Sioux City Riverboat Corp., Inc. executed a
Management and Operation Agreement under which Sioux City Riverboat Corp. was to
manage and operate gambling games on an excursion boat on the Missouri River in
Woodbury County for a ten-year term, with the option of extension for two additional five-
year periods. (Exhibit 2, at pp. 1-11)
In July of 1992, the IRGC granted MRHD a license to conduct and Sioux City Riverboat Corp.,
Inc. a license to operate gambling games on a riverboat located at 100 Larsen Park Road in
Sioux City, Iowa, now known as the Argosy Casino. Operation of the boat began on January
29, 1993. (Exhibit 0, at p. 3) MRHD remained the QSO licensed to conduct games at this
location for two decades. In late 1994, the Sioux City Riverboat Corp. ceased operation and
Belle, the Applicant in this case, assumed operation of the excursion boat under the terms
of the~ 992 operating ~greeme~t. (Exhibit 0, at p. 4) Belle exercised both renewal options,
extendmg the term of 1ts operatmg agreement with MRHD through July 7, 2012. (Exhibit 2,
at pp. 14-15)
MRHD and Belle executed an amendment to their operation agreement in December of

2004. The amendment revised terms of the agreement requiring distribution of admission
Page4
fees to MRHD and Woodbury County. Through preliminary recitals, the parties
acknowledged that: MRHD was a QSO and holder of a license to conduct gambling games
on an excursion gambling boat; Belle was the operator of the excursion gambling boat; and
MRHD permitted Belle to use MRHD's license to conduct gambling games, pursuant to the
terms of the Management and Operation Agreement. (Exhibit 2, at pp. 12-13)
Penn National Gaming, Inc. acquired ownership of the Sioux City excursion gambling boat
from Argosy Gaming in 2005. Belle continued its operation of the Argosy Casino without
interruption, pursuant to the Management and Operation Agreement with MRHD, as a
subsidiary of Penn National. MRHD and Belle maintained licenses to conduct gambling
games and operate the Argosy Casino through the 2011-2012licensing year. (Exhibit 3 &
Ohorilko testimony)
Renewal Application for the 2012-2013 licensing-year: On December 29, 2011, MRHD and
Belle jointly submitted a License Renewal Application for the upcoming licensing year-
April!, 2012 through March 31, 2013. (Exhibit 4) The applicants included the following
statement regarding the status of their operating agreement on the cover page of the
application:
Although this license renewal application covers the entirety of the time
period from April!, 2012 to March 31, 2013, the co-licensees/co-applicants,
Missouri River Historical Development, Inc. (qualified sponsoring
organization) and Belle of Sioux City, L.P. (operator) acknowledge that they
currently have an operating agreement in effect through July 6, 2012 as
provided herein and that renewal or extension of an operating agreement
pursuant to Iowa Code Chapter 99F through the applicable time period of the
requested license is necessary. Missouri River Historical Development, Inc.
and Belle of Sioux City, L.P. represent to the Iowa Racing and Gaming
Commission (Commission) that negotiations to complete the terms of that
agreement/extension are ongoing and they have reason to believe that the
same will be finalized on or before the meeting of the Iowa Racing and
Gaming Commission on March 8, 2012 when the matter of this license
renewal application will come before the Commission for action. The
Commission will be kept advised of the progress of the parties and a copy of
the renewal/new operating agreement will be provided to the Commission
as soon as possible.
(Exhibit 4, at p. 1)
Representatives for MRHD and Belle appeared at the March 8, 2012 IRGC meeting and
reported that their negotiations were ongoing, but they had not agreed upon terms for
extension ~r c,onti~uation ~ftheir operating agreement. The process was slowed, in part,
by the parties desire to bmld a new land-based facility and difficulties with locating a site,
Docket No. 131RGC020
PageS
securing capital, facility design, and negotiations with MRHD and Sioux City. The
Belle/Penn National representative said they hoped to have a definitive agreement for
continued operation of the Argosy Casino in place by the June IRGC meeting- prior to
expiration of the current operating agreement. The Commission unanimously approved a
motion to approve the pending MRHD and Belle license renewal application "conditioned
upon the parties negotiating and submitting a new operating agreement by June 7, 2012."
(Exhibit U, at pp. 14-17) A certificate of licensure for the period from April1, 2012 to June
7, 2012 was issued by the IRGC. (Exhibit 5)
MRHD and Belle/Penn National representatives again appeared at the June 7, 2012, IRGC
meeting. Negotiations between MRHD and Belle had deteriorated. A proposed downtown
Sioux City casino site was no longer available; MRHD had filed a lawsuit against Belle; and
MRHD had rejected a proposal from Belle/Penn National to participate in mediation of
ongoing disputes. Despite these difficulties, MRHD prepared an agreement for extension of
the MRHD/Belle operating agreement through March 31, 2015, so that the Argosy Casino
could continue operating. MRHD presented a copy of the proposed extension agreement to
the Commission at the June 7th meeting. Belle/Penn National had not approved the
extension at that time because MRHD had not agreed to dismiss its lawsuit against Penn
National.l Given the operator's inability to come to terms with MRHD, Belle/Penn National
asked the Commission to extend its license from June to July and then renew the license for
the remainder of the license year with a new QSO - Friends of Woodbury County- that
shared Belle/Penn National's vision for a land-based facility in downtown Sioux City.
Two actions affecting the gambling in Woodbury County were taken on unanimous vote of
the Commission at the June 7, 2012 meeting, after hearing from the QSO and operator. First
the Commission approved a motion to open the Woodbury County license for new
applications to build and operate a land-based facility in the county, with the process open
to all interested parties. Second, the Commission approved a motion to approve the license
for Belle/Penn National and MRHD through March 31, 2013 pending the agreement of the
parties to extend the operating agreement through that date and beyond. (Exhibit 13, at
pp. 3-8 & Ohorilko testimony)
During the months that followed, Belle asked the IRGC to reconsider the actions taken on
June 7th and to grant approval of the MRHD/Belle agreement for extension of their
operating agreement through March 31, 2015. The requests generated no motions and the
Commission took no further action concerning the pending MRHD/Belle license renewal
application. The IRGC also took no action to halt operation of the Argosy Casino. Rather,
during the IRGC meeting in August of 2012, Commission Vice-Chairman Seyfer advised a
Belle/Penn National representative that its license would continue under operation of law,
1
A fully executed version of the extension agreement appears in the record as Applicant's Exhibit A.
The extension agreement was signed by Mark Monson for MRHD on May 24, 2012. A representative
for Belle signed the extension on June 7, 2012, after the Commission meeting. (Monson testimony).
Page 6
pursuant to Iowa Code section 17A.18, and Belle continued to operate the Argosy Casino
without interruption. (Exhibit H, at pp. 8-10 & Ohorilko testimony)
Renewal Application for the 2013-2014 licensing-vear: During the fall of 2012, MRHD and
Belle each entered into operating agreements with other parties and independently
submitted responses to the IRGC's request for proposals for a land-based casino in
Woodbury County.z Although IRGC staff typically sends renewal forms to licensed QSOs
and operators, Administrator Ohorilko decided not to send a renewal form to MRHD and
Belle because he knew they were no longer working together and he did not believe a
renewal application would be necessary for the Argosy Casino to remain open by operation
of law. Counsel for Belle had frequent communication with Ohorilko by email and phone
during December of 2012 to ensure they provided sufficient information to the IRGC to
allow operation of the Argosy Casino to continue. (Exhibits J- L & Ohorilko testimony)
On December 31, 2012, Belle submitted a License Renewal Application for its license to
operate the Argosy Casino for the upcoming licensing year- April1, 2013 through March
31, 2014, using the form provided for the prior year. (Exhibit 6) The applicant included
the following statement regarding the status of its operating agreement with MRHD on the
cover page of the application:
Although the Iowa Racing and Gaming Commission (lRGC) has not provided a
renewal application form to Belle of Sioux City, L.P. (Belle), the following
renewal items are submitted by Belle for the Aprill, 2013 to March 31, 2014
licensing year. The documents requested in Section VI (F) with regard to the
qualified sponsoring organization are not included in this submission;
however, the Commission is referred to the license renewal application for
April1, 2012 to March 31, 2013. Furthermore, the information in Section
Vl(C) reflects Belle's contention and position with regard to the status of and
expiration date of the management agreement although it acknowledges that
the same are in controversy. (Exhibit 6, at p. 1)
The attached Form for Section Vl{C) indicated that the operating agreement between Belle
and MRHD, per 99F.S for the right to conduct gambling games on a licensed excursion
gambling boat, originated on May 27, 1992 and would expire March 31, 2015. (Exhibit 6, at
p. 19) Two pages of the renewal application form include signature lines for the
"Applicant-Operator" and the "Applicant-Qualified Sponsoring Organization"- the
Statement of Application and the attachment for section VI(C), requesting details about the
operating agreement. A notarized certification of the truthfulness of the contents of the
application is requested from each applicant.
2 MRHD submitted an application to conduct gambling games at a downtown Sioux City location,
applying for an operator's license with Sioux City Entertainment, Inc. Belle submitted two
applications with QSO Greater Siouxland Improvement Association, one for a Sioux City location and
one for another Woodbury County location.
Page 7
Belle's December 31, 2012, renewal application was signed and certified by Vice President
and General Manager Lance George for Belle. The application was not signed or certified
correct by a representative agent for MRHD. (Exhibit 6, at pp. 3, 19, 25) In a cover letter to
Administrator Ohorilko, Lorraine May as counsel for Belle stated the intent to submit
needed information to allow the ongoing operation of the Argosy Casino. (Exhibit 13) Ms.
May also clearly informed IRGC staff that MRHD was contending there was no contract
between MRHD and Belle and the application form from the prior year "had been updated
from Belle's perspective only with signatures and attachments applicable to Belle only."
(Exhibit 7)
Belle approached MRHD regarding the renewal application for the Argosy Casino for the
2013-2014licensing year and the QSO refused to join the application. As noted above,
MRHD and operator Sioux City Entertainment, Inc. submitted a land-based casino
application. MRHD made a conscious decision not to apply for renewal of its license to
conduct games at the Argosy Casino. (Monson testimony)
The IRGC received four applications for a land-based casino in Woodbury County. During
early 2013 the Commission reviewed the applications and solicited public input regarding
the proposals. At a meeting on April18, 2013 the Commission granted a license to conduct
gambling games at a gambling structure located at 3rd and Pearl in downtown Sioux City to
MRHD and granted a license to operate the facility to Sioux City Entertainment, Inc.
(Monson & Ohorilko testimony)
The IRGC did not act on Belle's 2013-2014 renewal application until August 15, 2013. At
that meeting Administrator Ohorilko presented the Commission with a staff
recommendation regarding the application. Ohorilko noted that although Belle had a good
regulatory record up to that point, they did not have an operating agreement in place with
a QSO licensed to conduct gambling games at the Argosy Casino location and, in the staffs
view, was not statutorily able to operate the casino absent an agreement with a QSO license
to operate the casino. The Commission agreed, unanimously passing a motion to deny
Belle's application for renewal of its operator's license for the Argosy Casino "based upon
the fact that Belle is statutorily ineligible to hold a license in the absence of an operator's
agreement with a qualified sponsoring organization." (Exhibit 8, pp. 2-5 & Exhibit N, pp.
26-37)
Arguments advanced at hearing: Belle requested this contested case proceeding to

challenge the IRGC's August 15,2013 decision to deny its application for renewal of its
license to operate the Argosy Casino during the 2013-2014licensing period. As noted
above, the notice of hearing limited the scope of the proceeding to review of the August 15,
2013 decision and the question of whether the Belle's lack of an operator's agreement with
a QSO that is presently licensed to conduct gambling games at the Argosy Casino in Sioux
City, Iowa, precludes renewal of the Applicant's license to operate the Argosy Casino.
PageS
At hearing, the State focused on the status of the MRHD license, arguing that Belle could not
be licensed to operate the Argosy Casino during the 2013-2014licensing year, even if Belle
had an enforceable operating agreement with MRHD, because MRHD did not apply for and
did not have a license to conduct gambling games at the Argosy Casino during the 2013-
2014licensing year. Belle asserted that MRHD's failure to apply for renewal of its license
to conduct games at the Argosy Casino during the 2013-2014licensing year is immaterial,
because pursuant to Iowa Code section 17A.18(2), MRHD had authority to continue
functioning by operation oflaw under the prior license and the timely application
submitted for licensing year 2012-2013. Assuming the existence of an enforceable
operating agreement between MRHD and Belle, Belle argued its operating license should be
renewed. Alternatively, Belle requests a hearing on what it perceives to be the true reason
for the Commission's decision to deny the renewal application- the absence of an
operating agreement between MRHD and Belle.
Conclusions of Law
Iowa Code chapter 99F legalizes a system of wagering on gambling games when conducted
on an excursion gambling boat, gambling structure, or racetrack enclosure- at authorized
locations- by a licensee. Iowa Code§ 99F.3. This Commission is vested with exclusive
jurisdiction and authority to supervise all gambling operations at racetracks, gambling
structures, and excursion gambling boats in the state. Iowa Code§ 99F.4 (2013). The
Commission's authority includes the power to license a nonprofit qualified sponsoring
organization [QSO] to conduct gambling games on an excursion gambling boat and to
license any person to operate an excursion gambling boat. See Iowa Code§§ 99F.1(2);
99F.1(20); and 99F.4(2).
The Commission firmly believes that each excursion gambling boat operating in Iowa must
have an associated QSO, licensed to conduct gambling games on the boat.
Only a QSO may apply for a license to conduct gambling games on an excursion gambling
boat. Iowa Code§ 99F.S(1). A license to conduct gambling games authorizes a QSO to
directly operate the excursion gambling boat or to contract with another entity to operate
the boat. See 491 Iowa Admin. Code (lAC) 1.5(1) (application fee must be paid by the
"qualified nonprofit corporation and the boat operator, if different than the qualified
nonprofit corporation"). Any "person"- including a for profit corporation- may apply for a
license to operate an excursion boat. /d.; see Iowa Code§ 4.1(20) (defining term "person,"
as used in Iowa statutes). A license to operate authorizes the holder to manage all day-to-
day operations of the excursion gambling boat on behalf of a QSO.
A QSO that directly operates an excursion gambling boat "shall distribute the receipts of all
gambling games, less reasonable expenses, charges, taxes, fees, and deductions allowed
Page9
under [chapter 99F], as winnings to players or participants or shall distribute the receipts
for educational, civic, public, charitable, patriotic, or religious uses:· .." Iowa Code.
§ 99F.6(4)(a)(2). At least three percent of the adjusted gros~ receipt~ ~rom gamblmg must
be distributed to educational, civic, public, charitable, patriotic, or rehgwus uses. !d.
When a QSO uses an operator, the terms of the relationship between the QSO and the
operator are typically set forth within a written "operating agreement." The QSO and .
operator are free to negotiate nearly all terms of their agreement. Howeve~, the operatmg
agreement must provide for a minimum distribution of three percent of adjusted ?r~ss
receipts each license year by the QSO for educational, civic public, charitable, ~atrrotic or
religious uses. Iowa Code§§ 99F.5(1); 99F.6(4)(a)(2). Whether or not committed to .
writing, operating agreements are subject to approval by the IRGC, as are nearly all wntten
and verbal contracts and business arrangements affecting facility operation. See Iowa Code
§ 99F.7(3)(a) (licensee shall not by arrangement of any kind grant, assign, or turn over
operation of an excursion gambling boat to any person, absent "a management contract
approved by the commission"); 491 lAC 5.4(8)(a)(1).
The operating agreement between the QSO and the operator is among the required
elements of the renewal application for an excursion gambling boat. 491 lAC 1.5(3). Belle
and MRHD acknowledged this when they jointly applied for renewal of their licenses for
the 2012-2013 licensing year in December of 2011. The applicants knew that their existing
license would expire during the upcoming year and that a new agreement or extension of
the existing requirement would be required and they assured the Commission that they
intended to meet this requirement by the time the IRGC acted on the application at its
meeting on March 8, 2012.
Negotiations did not go smoothly and the applicants were unable to present a finalized
extension of the operating agreement at the March 8th IRGC meeting. Despite this, the
Commission conditionally approved the MRHD/Belle renewal application, subject to the
parties completing negotiation of a new operating agreement by June 7, 2012- for
consideration at last scheduled meeting before the existing agreement expired. When
MRHD/Belle were unable to meet June 7th deadline, the Commission again approved the
rene.wal appl~cation through ~arch 31, 2013- the end of the licensing year- subject to the
parties agreemg to extend their operating agreement through that date. The Commission
also t~ok the unprecedented action of o~ening the Woodbury County for new applications
to build and operate a land-based gambling structure in the county.
The Commission took no further action on the MRHD/Belle 2012-2013 renewal

~pplication. Th.e Iowa Ad.mi~istrative Procedures Act includes a provision allowing a
hcen~ee to contmue functionmg under a prior license while a renewal application is
pend mg.
Page 10
When a licensee has made timely and sufficient application for the renewal of
a license or a new license with reference to any activity of a continuing
nature, the existing license does not expire until the application has been
finally determined by the agency, and, in case the application is denied or the
terms of the new license limited, until the last day for seeking judicial review
of the agency order or a later date fixed by order of the agency or the
reviewing court.
Iowa Code§ 17A.18(2). The Commission informed MRHD and Belle that section 17A.18
would allow ongoing operation of the Argosy Casino and Belle continued to operate the
excursion boat for the remainder of the 2012-2013 licensing year and through the 2013-
2014 licensing year.
During the fall of2012, MRHD and Belle each engaged new partners and independently
responded to the Commission's request for proposals for a land-based facility. On
December 31, 2012, Belle independently filed an application for renewal of its operating
license for the Argosy Casino. Neither MRHD nor any other QSO joined the application. On
April18, 2013, the Commission granted MRHD and a different operator- Sioux City
Entertainment, Inc., licenses to conduct gambling games at and operate a new gambling
structure in downtown Sioux City.
Despite MRHD's refusal to join Belle in applying for renewal of the Argosy Casino licenses
for the 2013-20141icensing year and the Commission's grant of a license to MRHD to
conduct gambling at a different facility, Belle argues that its application for renewal of the
Argosy Casino operating license should be approved.
The holding of a gambling license in this state is a privilege, not a vested right. Licenses
must be renewed annually and the burden of proving qualifications for the privilege to
receive a license is on the licensee, or applicant, at all times. 4911AC 5.1. MRHD chose not
to seck renewal of its license to conduct gambling games at the Argosy Casino for the 2013-
20141icensing year and the license MRIID held for that location expired. No other QSO
applied for a license to conduct gambling at the Argosy Casino. Belle argues that MRHD's
failure to apply for renewal of its license to conduct games at the Argosy Casino during the
2013-2014liccnsing year is immaterial, because under Iowa Code section 17A.18(2) the
timely application submitted for licensing year 2012-2013 authorized MRHD to continue
functioning by operation of Jaw under the license granted for the prior year.
Given that the 2012-2013 renewal application submitted by MRHD and Belle did not
include an operating agreement for the entire term of the licensing year, that application
was arguably insufficient to trigger continuation of the prior licenses by operation of law
under section 17A.18(2). In August of 2012 and during the months that followed, the
Commission and the parties assumed that the Argosy Casino licenses remained in effect by
operation of law under this section. The Commission may have erred in allowing gambling
Page 11
to continue at the Argosy Casino, but if so, the error was harmless: employees ofthe casino
continued working; patrons continued to frequent the excursion boat; three percent of the
adjusted receipts continued to be distributed for educatwnal and charitable purposes; and
Belle and Penn National continued to generate profits.
The Commission cannot, however, Ignore deficiencies in the Belle's application for renewal
of its license to operate the Argosy Casino for the 2013·2014licensing year. No QSO joined
Belle in submitting this application. Belle is statutorily ineligible to hold a license to
conduct gambling games and cannot be granted a license to operate the excursion boat in
absence of an operating agreement with a QSO licensed to conduct games at this location.
Therefore, the Belle's 2013·2014 renewal application must be denied.
Decision and Order
The 2013-2014 License Renewal ApplicatiOn submitted by Belle of Sioux City, L.P., for the
Argosy Casino· Sioux City IS DENIED.
Pursuant to Iowa Code section 17A.18(2), this final Commission action on the application
sets in motion an end to operation of the Argosy Casino by operation of law. The conduct of
gambling games at the Argosy Casmo ·Sioux City shall cease on or before july 1, 2014 .
.~1JJ
Dated this~ day of April, 2014.
"l
cing and Gaming Commission
Copies to:
ATTORNEYS FOR APPLICANT- Mark E. Weinhart

Holly M. Logan
Danicllc M. Shelton
Christopher Tayback
Daniel Posner
ATTORNEYS FOR THE STATE- John R. Lundquist, Assistant Attorney General

Jeffrey C. Petcrzalek, Assistant Attorney General
IRGC ADMINISTRATOR- Brian J. Ohorilko

....}'\lit~
Fields of Opportunities STATE OF IOWA

TERRY E. BRANSTAD, GOVERNOR RACING AND GAMING COMMISSION
KIM REYNOLDS, LT. GOVERNOR BRIAN J. OHORILKO, ADMINISTRATOR
August 27, 20 13
Lance George
Belle of Sioux City, L.P.
100 Larsen Park Road
Sioux City, IA 51101
Via Certified Mail, Restricted Delivery
Dear 1\1r. George:
In December of 20 11, Belle of Sioux City, L.P. (Belle) made application to the
Iowa Racing and Gaming Commission (Commission) for renewal of its operator's
license to operate the Argosy Casino in Sioux City, Iow~ on behalf of qualified
sponsoring organization Missouri River Historical Development, Inc. (J\1RHD).
At the time of Belle's renewal application, its operating agreement with 1v.lRHD
for the Argosy Casino was nearing expiration. The Commission subsequently
renewed Belle's operator's license conditioned upon Belle and 1v1RHD negotiating
and submitting a new operating agreement to the Commission by June 7, 2012.
After Belle was unable to negotiate an acceptable extension with 1v.1RHD, the
operating agreement between Belle and lvfRHD for the Argosy Casino expired on
July 6, 2012. The Argosy Casino has been able to remain open since only by
operation oflaw. See Iowa Code§ 17A.18(2). Without consent from MRHD, the
Belle, again, made application to the Commission on December 31, 2012, for an
operator's license for the Argosy Casino.
Iowa law requires that an operator of a casino in the state of Iowa partner with a
qualified sponsoring organization (QSO) that is licensed by the Commission to
conduct gambling games at an excursion gambling boat or other gambling
structure. See Iowa Code§§ 99F.4, 99F.5(1), 99F.7; 491 Iowa Admin. Code§
1.7. MRHD is the QSO licensed to conduct gambling games at the Argosy Casino
in Sioux City. Due to the expiration of the operating agreement between Belle and
MRHD, Belle is no longer statutorily eligible to operate the Argosy Casino. For
this reason, the Commission voted at its August 15, 2013 meeting to deny Belle's
1300 DES MOJNES STREET, SUITE 100, I DES MOJNES, IOWA 50309-5502 EXHIBIT
PHONE: 515-281-73521 FAX: 515-242-6560 I \VEB SITE www.iowa.rz.ov/irgc/
j G
December 31, 2012 application for renewal of its operator's license for the Argosy
Casino.
Belle has the right to request an evidentiary hearing before the Commission at
which Belle may contest the denial of its application for renewal of its operator's
license for the Argosy Casino. See Iowa Code § 17A.18(3); 491 Iowa Admin.
Code§ 4.20. This evidentiary hearing would constitute a contested case
proceeding under the Iowa Administrative Procedure Act, Iowa Code chapter 17A.
I d.
To receive an evidentiary hearing, Belle must file a written request for a hearing
with the Commission's offices, located at 1300 Des Moines Street, Suite 100, Des
Moines, IA 50309-5508, within thirty (30) days ofBelle's receipt of this letter.
Belle may continue operating the Argosy Casino pending the conduct of an
evidentiary hearing and the Commission's issuance of a fmal decision on Belle's
license renewal application. See Iowa Code§ 17A.18(2); see also 491 Iowa
Admin. Code§ 4.45 (Stays of commission actions).
The Commission's decision to deny Belle's application for renewal of its

operator's license for the Argosy Casino shall become final and Belle's right
to seek judicial review of that decision shall be waived if a timely request for
an evidentiary hearing is not made.
Please contact the Commission's legal counsel, Assistant Attorney General

Jeff Peterzalek, at (515) 281-4213, should you have any questions concerning this
matter.
Sincerely,
Brian J. Ohorilko
Administrator
cc:~ark Weinhardt
Weinhardt & Logan
2600 Grand Avenue, Ste. 450
Des Moines, Iowa 50312

July 16 2014 Motion

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July 16 2014 Motion

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" ..

BEFORE THE IOWA SUPREME COURT

BELLE OF SIOUX CITY, L.P., ) Supreme Court . JUL 1 6 2014

IMMEDIATE RELIEF REQUESTED: EMERGENCY STAY

COMES NOW the Petitioner/Appellant, Belle of Sioux City, L.P. ("Belle"),

As discussed below, without a stay, Belle's long-standing, multi-million

supported by substantial evidence.

2014. See Exhibit B.

Belle sought judicial review ofthe IRGC's order. In advance of July 1,

appeal in the district court on July 16, 2014.

Historical Development Inc. ("MRHD"), jointly submitted an annual application

operating agreement through March 2015. Almost immediately, MRHD disputed

the effectiveness of that extension, contending it was ineffective; Belle consistently

lawsuit between MRHD and Belle.)

action on the Belle/MRHD December 2011 renewal application.

Sioux City Entertainment ("SCE") submitted an application with MRHD. The

new casino will open August 1, 2014. 3

MRHD remained licensed by operation of law under section 17A.l8(2). Thus,

decision to abandon its license, however, because, as MRHD's president testified

After Belle submitted information to the IRGC in December 2012 and

continued to act as though it were licensed.

"renewal application," which it then denied. (Although, as a matter of course,

"deficiency" as a reason why no renewal application was needed-and why Belle

and MRHD would continue to be licensed under operation of law-not as a reason

Casino in Sioux City."

03375.23641/6121 163. I {0202539l.DOC} 7

a stay. Iowa Code§ 17A.19(5)(c)(l)-(4). No requisite showing is required for any

another factor." !d.

I. BELLE IS LIKELY TO SUCCEED ON THE MERITS OF THIS

clear are pretextual and unsupported by substantial evidence.

A. The District Court Erred By Failing To Apply Section 17A.18(2).

review petitioner entitled to relief when agency action is "[b]ased upon an

erroneous interpretation of a provision of law whose interpretation has not clearly

been vested by a provision of law in the discretion of the agency"). Section

Iowa Code § 17A.18(2) (emphasis added).

understood that it did not need to submit anything at all.

December 2011 application "was arguably insufficient to trigger" that statute in

because of the lack of an approved operating agreement that extended throughout

03375.23641/6121 163. I {02025391.DOC} 10

that it is wholly irrational." !d. at 19.

03375.23641/6121163.1 {02025391 .DOC} 11

after the contested case hearing-is "erroneous" or "wholly irrational."

prejudiced by an erroneous interpretation" of section 17A.l8(2). This conclusion,

had made an "erroneous interpretation" of that statute), it is wrong. Regardless of

district court's conclusion that the IRGC's purportedly "mistaken" application of

section 17A.l8(2) was "harmless," it is highly prejudicial to Belle to evaluate the

what it was told to do.

squared with section 17A.18(2), the order should be reversed.

B. The District Court Erred By Concluding That MRHD's License

required to submit a renewal application in December 2012, but also by concluding

a conclusion of law, it is wrong under any standard.

First, As a matter of law, MRHD's license could not have "expired" on

April 1, 2013 as a result of its failure to submit a renewal application in December

that MRHD's license expired on April1, 2013.

03375.2364116121 163. I {0202539I.DOC} 13

substantial evidence, that MRHD's license expired on Aprill, 2013 as a result of

its failure to submit a renewal application in December 20 12-and this, of course,

The district court also failed to address overwhelming evidence showing

MRHD continued to assert-in letters, emails, court filings and elsewhere-that it

• On April22, 2013, three weeks after MRHD's license purportedly expired,

Argosy Casino after April1, 2013. For example:

renewal application. Even if some limited evidence in the record could be

construed otherwise, evidence is not "substantial" for judicial review purposes

understood to be serious and of great importance." Iowa Code§ 17A.l9(10)(t)(1)