As the revenue-sharing dispute between the Seneca Indian Nation and the state of New York drags on, communities in the west of the state that have shared in those funds are feeling the financial pinch. And they’re feeling it badly enough that one of them may demand that the state shut down the tribe’s casinos.
Last week, the Board of Supervisors of Seneca County was set to debate the motion a purely symbolic gesture, to be sure, but a pretty clear indication that local emotions are running high as the dispute enters its third year with no end and no money in sight.
Under the terms of the federally mandated gaming compact between the Senecas and New York, the tribe was to make annual payments to the state equal to 25 percent of the slot machine revenue from its three casinos in Buffalo, Niagara Falls and Salamanca. In exchange, it enjoyed a monopoly on casino gaming in a large swath of western New York.
Between 2002 and 2016, the state collected some $1.55 billion around $110 million a year as its part of the bargain. Of that, 10 percent was distributed to the casinos’ host communities and several others in the western part of the state.
Then, early in 2017, the tribe announced the obligation had expired as of the last payment in 2016, and there would be no more. The administration of Governor Andrew Cuomo disagreed, saying the provisions of the compact required the payments to continue. The agreement was set to roll over after 14 years, unless there was an objection from either party, which there wasn’t. But the tribe argues there was no specific stipulation that revenue-sharing payments continue into the second term. In the war of words that followed, the administration declared the tribe in violation of the compact. The dispute went into binding arbitration.
It’s not the first time the Senecas and the state have fallen out with each other. The legalization of racetrack gaming, which put several casino-style competitors in or near the tribe’s gaming exclusivity zone, forced a renegotiation of the original compact terms and resulted in financial compensation for the tribe.
Since then, the state has legalized four full-scale commercial casinos, and though it’s never been stated publicly, it’s likely the Senecas believe their monopoly has been infringed on again, especially since the opening of the westernmost of the four, del Lago Resort & Casino in the Finger Lakes.
In any event, earlier this year, the three-member arbitration panel ruled against the tribe and set the back payments owed to the state at $255 million and counting.
The Senecas, who have been paying the disputed funds into an escrow account, asked the U.S. Department of Interior for a second opinion. The department declined. The tribe then sued in U.S. District Court in Buffalo to have the decision vacated, arguing that it amounts to an alteration of the language of the compact, which can only be approved by Interior.
Jason Conwall, a spokesman for the governor, dismissed the suit at the time as “nothing more than another stall tactic from the Seneca Nation as they continue to move the goal posts to avoid paying their obligations under a process that they signed on to.”
Meanwhile, the communities hardest hit in the dispute are the three that host the Senecas’ casinos, especially Niagara Falls and Salamanca. Last month, the governor’s office agreed to send the latter $2.35 million to shore up its budget. And last September, the administration came to the rescue of the city of Niagara Falls with a $12.3 million loan.
Seneca County lies within a state-designated Indian gaming exclusivity zone that’s eligible for assistance under a 2013 law, the Upstate New York Gaming and Economic Development Act, and is supposed to receive additional revenue-sharing funds to offset the impacts of tribal casinos on infrastructure and services. On that basis, the resolution the Board of Supervisors is considering would require the state to step in and make up for the payments the Senecas have halted. They calculate the loss at around $13 million annually to the seven counties within their zone and more than $1 million annually to Seneca County.
Beyond that, the county has no power to force a tribal casino to close, and it’s debatable whether the state can either, since Indian gaming is regulated by federal law, and all relations with Indian tribes come under the purview of the Interior Department and ultimately, Congress.
Seneca President Rickey Armstrong Sr., aware of the bad blood the dispute has fostered in the surrounding communities, has said the tribe is open to the possibility of negotiating “a mutually agreeable resolution.”
“I am concerned,” he said, “that this litigation will continue for the foreseeable future, leaving the Seneca Nation and the local governments who benefit tremendously from our gaming operations in legal and financial limbo.”
The communities anxious for relief are still waiting.
