The standoff between the Seneca Indian Nation and the state of New York over casino revenue-sharing payments is now in its third month, and with no breakthrough in sight, cash-strapped city governments depending on that money are getting nervous.
Niagara Falls Mayor Paul Dyster says his municipality is looking at a number of plans to cut costs. These could include sharing services with Niagara County by consolidating departments. The administration is also weighing whether to implement a recommendation from Albany that the city cut police staff and charge city employees more for health care.
“Obviously casino revenues are very significant for the city of Niagara Falls,” Dyster said. “It’s the position of the city and the state that these funds are in fact owed to the state and then the state owes funds to the city of Niagara Falls.”
The Senecas beg to differ. They say their contractual obligation to kick back to Albany a percentage of the slot machine revenues from their three casinos in Niagara Falls, Buffalo and Salamanca?a portion of which the state shares with the three host cities?ended in 2016 under the terms of a federally mandated agreement that allowed the tribe to operate casinos in the first place.
That deal, which dates back to 2002, has netted the state more than $1.5 billion over 14 years. Niagara Falls, Buffalo and Salamanca have been banking roughly $110 million a year. The three cities were looking to split around $28 million this month, but that was before the Senecas suspended quarterly payments at the end of March.
Buffalo City Councilman Andrew Touma has said the issue is the “Number 1 question” he gets asked from his constituents.
The tribe says it is merely adhering to the letter of the 2002 compact.
“The Seneca Nation had a 14-year obligation to share a portion of its slot revenues with New York state,” a spokesman said. “That obligation has been faithfully fulfilled and has now ended.”
Others, however, say the tribe is irked by the introduction of commercial casinos via a state constitutional amendment approved in 2013. Three such casinos have opened in the last year, a competitive factor that didn’t exist in 2002, when the tribe was granted exclusive rights to operate Las Vegas-style gaming west of a line running along State Highway 14 from Lake Ontario in the north to Elmira in the south.
Publicly, the Senecas have not addressed the exclusivity issue in the context of the suspended payments, but the tribe has indicated its displeasure with the location of one of the new casinos, the $440 million del Lago, which opened in February in the Finger Lakes region in a town just seven miles east of the Route 14 line.
Nor is it the first time the Senecas have pushed back against a competitive threat. In 2009, they halted revenue-sharing payments after the state authorized video gaming machines at racetracks, including at least one within the tribe’s exclusivity area. That impasse lasted four years, ending in 2013 with the state admitting fault and slashing $200 million from the tribe’s obligation.
“Obviously, the concern is there’s a history there,” Touma said. “The city can’t afford to be in that situation again.”
The state maintains the revenue-sharing is still in force under the terms of the 2002 compact and the 2013 agreement that ended the racino dispute.
“Discussions are ongoing,” said a spokesman for the state Gaming Commission. “The state has made its position clear that payments must continue.”
The tribe, however, contends the two sides aren’t talking at all and haven’t since the dispute came to a head three months ago.
Their spokesman said, “When the nation made its final payment in March, (Seneca) President (Todd) Gates agreed to accept Gov. (Andrew) Cuomo’s request to meet. Since then, the nation has heard nothing from the Governor’s Office regarding a specific meeting date.”
The Senecas say they remain “committed to being good neighbors” and are willing to work with the three municipalities “to ensure the long term viability of our casino properties and the thousands of local jobs they support”.
But so far that isn’t giving local officials anything they can balance their books on.
“I don’t think that we are at the point where we’re cancelling capital projects as a result of this situation,” Mayor Dyster said, “but we’re looking at all of our expenses, both capital expenses and operational expenses, and we’re trying to be certain that a dollar doesn’t go out the door that doesn’t absolutely have to.”
