The Ottumwa Courier

AP Iowa

June 23, 2013

Legal costs soar for Sioux City casino nonprofit

SIOUX CITY, Iowa (AP) — Documents show that legal costs for Missouri River Historical Development soared last year as the local nonprofit group and its former casino partner battled in court over their disintegrated contractual relationship.

The Sioux City Journal reported (http://bit.ly/11Upb4o ) that the nonprofit group spent $324,769 in legal fees in 2012, according to figures the organization released to the Journal last week. That's more than six times the $50,795 reported in 2011. A year before that, the nonprofit's fees were $11,641.

The nonprofit and Argosy Sioux City riverboat casino operator Penn National Gaming Co. have been locked in a legal battle over their contract for more than a year.

Penn National Gaming sued the nonprofit in September, claiming the group breached exclusivity in their operating agreement by negotiating with other casino operators.

That followed a lawsuit the nonprofit filed against Penn in an effort to block the riverboat casino operator from threatening legal action against other gambling operators that tried to talk to the nonprofit. A federal judge dismissed the case.

"I don't think the cost of litigation is going to hamper us in any way," Missouri River Historical Development President Mark Monson told the Journal. "It's unfortunate we have to spend it."

Penn spokeswoman Karen Bailey declined to comment to the newspaper for the story.

The nonprofit's operating agreement with Penn expired in July. After months of stalled talks on a contract extension that would have included a land casino, the Iowa Racing and Gaming Commission took the unprecedented step of putting the Woodbury County license up for bid.

In April, the new land license was awarded to Missouri River Historical Development and its new partner, Sioux City Entertainment, the developer of the Hard Rock Hotel & Casino planned for downtown Sioux City.

Penn, one of two other applicants for the land license, had proposed a Hollywood-themed casino in downtown Sioux City or rural Woodbury County.

Iowa law requires casino operators to share the state license with qualified nonprofit organizations, which also collect and distribute a portion of casino profits for charitable and civic purposes.

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Information from: Sioux City Journal, http://www.siouxcityjournal.com

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