[toc]Two months ago, the Seneca tribe abruptly informed New York state lawmakers it was stopping payment on casino revenue from its three Western New York properties. Since then, representatives from the tribe and the state have yet to meet to discuss any sort of resolution.
With no payments coming in from the tribe’s casino revenues, local and count governments in places like Buffalo and Niagara Falls are trying to make budgets which accounted for casino payments work without them.
Seneca Nation claims legal obligation to pay stopped in March
The crux of the disagreement between the tribe and the state is when the compact stipulates payments stop. Seneca argues the 2002 deal with the state required 14 years of payments. Governor Andrew Cuomo’s office contends the payments last through the duration of the compact. The current compact expires in 2023.
The specific language of the contract included a 14-year initial agreement. After that, if both parties were satisfied, the compact could be extended seven more years. Neither New York nor Seneca expressed any issues, so the agreement extended to 2023 last year.
Seneca spokespeople say the language in the agreement did not specifically state payment would continue with the extension. For that reason, the March 2017 payment was the tribe’s last contribution to New York.
New York casino competition could be a bargaining chip
Another stipulation of the contract is exclusive casino rights for the tribe in a specific area of Western New York. Recent commercial casino expansion upstate does not cross those geographic boundaries. Nonetheless, the tribe is not pleased with the addition of four upstate NY casinos.
The del Lago Casino Resort is just seven miles from the edge of Seneca’s gaming territory. It is not clear yet the financial impact the new casino will have on the tribal properties. Del Lago and Rivers Casino in Schenectady both only opened earlier this year.
The Seneca Nation operates three New York casinos in Niagara Falls, Buffalo, and Salamanca. The tribal payments to the state for the casinos amounted to more than $100 million annually.
Tribe open to maintaing a relationship with the state
Though the tribe ceased payments, it is still open to reaching a financial agreement with the states. When the tribe stopped payments, Seneca President Todd Gates told The Buffalo News:
“Although the revenue share has ended, we remain committed to being good neighbors in the communities where we have gaming facilities and we look forward to working directly with them to continue the economic progress of Western New York.’’
The Buffalo News recently reported there should be a meeting between Cuomo and Gates soon.
“I know the state has a totally different read on the situation than the Senecas. I trust that the governor is going to work things out,’’ Niagara Falls Mayor Paul Dyster told the paper. His town is the one which stands to lose the most money should there be no compromise.
What will Seneca want in negotiations?
The biggest question looming over the situation is what the tribe will ask for in order to begin payments again. The exclusivity agreement for much of Western New York remains in place. As mentioned though, the new casino resorts could be a discussion point.
Another option would be to lower the 25 percent rate of the payments. Commercial casinos pay 31-41 percent in New York gambling taxes, so the tribal casinos still have the advantage. However, widening the gap could be a part of the negotiations.
It may take a while to find out exactly what negotiations will entail. The last time Seneca and the state disagreed over the casino compact, it took four years to reach a resolution.
