Teller County/Cripple Creek hits jackpot in legal battle

Teller County/Cripple Creek hits jackpot in legal battle

Rick Langenberg

Although there are no guarantees about a final legal conclusion regarding the allocation of gaming tax revenue in Colorado, Teller County and Cripple Creek have emerged as the undisputed winners in the latest battle with Gilpin County and Black Hawk.

In a recent decision by the Denver District Court, Judge Bruce Jones squashed the continued bid by Gilpin, which claims they should receive a higher take of the gambling revenue since they house the state’s biggest casinos that pay the most taxes. This interpretation, though, could result in considerably less revenue for Teller County, Cripple Creek and Central City. Gilpin’s claim is also supported by Black Hawk.

In essence, the judge reiterated the argument of Teller and Cripple Creek officials in that: The law is the law and Gilpin’s efforts to snag more money were previously addressed by the gaming commission. In fact, Gilpin’s contention that they deserve a higher take of gambling funds has previously been rejected by the gaming division staff, the gambling commissioners, a Colorado high court, the Denver District Court and even by state lawmakers. But Gilpin officials have refused to throw in the towel, citing a violation of the state constitution in the way the funds are allocated. They disagree with the current interpretation of “gaming revenue.”

But the judge hurled out some tough words for Gilpin, referring to their legal bid as “an intentional effort to mislead the court” and of “creative drafting (in their legal arguments) to conceal the fact that this issue has been previously addressed by the (gaming) commission.”

He also accused Gilpin officials of filing a ridiculous claim against the state treasurer. Gilpin accused the treasurer of falsely distributing gaming revenue, based on erroneous rules crafted by the Division of Gaming. Gilpin tried to argue that these rules violated the state constitution.

However, the judge strongly rejected this argument and contended that Gilpin officials are fighting the same battle they have already lost before, and accused them of presenting inconsistent arguments.

“This is very good news,” said Teller County Commissioner Norm Steen, when briefed about the latest decision at last week’s regular meeting. Both Teller and Cripple Creek face high stakes in this legal fight. If they lose this case, the local governments easily could lose more than $2.5 million collectively per year.

In the wake of the latest decision, the commissioners asked County Attorney Chris Brandt about the prospects of recouping some of the thousands of dollars that have gone into this fight over the last five years. “This is taxpayer money,” said Commissioner Dave Paul, in describing the amount of time and costs invested into fighting Gilpin’s claim.

Brandt stated that the attorneys that represent the impacted local governments are reviewing this idea.

However, Brandt couldn’t promise the commissioners what they really wanted to hear the most: That the latest decision would mean no more lawsuits by Gilpin County over this issue. In fact, Jones, in his decision, remained somewhat ambiguous about this point. “It is not necessary for the court to address whether the individual plaintiffs (Gilpin County and Black Hawk) have exhausted available administrative remedies,” stated the judge. Gilpin has another month or so to decide if it wants to appeal this verdict.

Nevertheless, elected leaders hope this decision could put an end to this issue. At the very least, they believe this would make it clear that Gilpin faces an extremely uphill battle, if it wants to change the gaming revenue allocation system legally, with the latest decision serving as a key “reference point” and acting as a “deterrent” for pursuing further legal action.

Gilpin and Black Hawk could still try to change the distribution formula through the state legislature or by proposing a new law or amendment. However, with the recent changes in the state Senate and House lineup, they face tougher obstacles. Former Democratic Senator Jeanne Nicholson, a big supporter of Black Hawk and Gilpin County, and who had mulled legislation to amend this distribution system, received the boot in the last election.