Senecas Arguing No Bang for the Buck on Exclusivity Guarantee

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By: Tony Farina

At the crux of the matter, the Seneca Nation believes the $1.4 billion in revenue sharing it paid to the state between 2002 and 2016 under the gaming compact did not deliver the exclusivity that was negotiated under the original agreement allowing them sole access to the casino gaming market in the region.   

Our sources suggest the bottom line is the Senecas would like to renegotiate the 25 percent-a-year of the slot machine revenue it was required to pay the state under the initial compact given the violations in the exclusivity guarantees it believes have taken place in violation of the Indian Gaming Regulatory Act.  In short, they argue they paid for exclusivity and didn’t get it, and therefore all bets should be off. 

To that end, the Senecas are now challenging the arbitration panel ruling last January that says the tribe owes the state $256 billion dating from 2017 when the Senecas stopped making payments.  The Senecas sought a review of the panel’s award by the Dept. of the Interior, but that went nowhere without the state joining the request.  So now, the Senecas have taken their case to federal court in Buffalo.

We can report that the federal lawsuit filed in Buffalo has been assigned to Judge William Skretny but as of press time, nothing has been scheduled.

While the battle between the state and the Senecas continues, the three host casino cities are left to wonder when, or even if, they will receive the gaming money they have put in their budgets.  The numbers are big:  $30 million for Niagara Falls, $17 million for Buffalo, and $12 million for Salamanca.

“We’ve been told that the city will start to feel the cash flow problem in July,” says Niagara Falls Councilman Chris Voccio.  “We’ve also been told by the mayor [Paul Dyster] that Gov. Cuomo will deliver on the $12 million he guaranteed we would receive from the state if the casino money doesn’t come.”

It is virtually impossible at this point to venture a guess as to when there will be a final decision in this second gaming war between the state and the Senecas and whether if there is an agreement it will be the same as before.  

The Senecas claim the arbitration award functions as an amendment to the compact because it requires payments to continue beyond what’s required in the language of the compact.

Seneca Nation President Rickey Armstrong said in a statement the arbitration panel’s decision and amendment must concur with federal law “and right now, the amendment and the law conflict with one another.  The only other alternative to resolve the matter would be for the Nation and the state to come to some agreement and jointly submit it to the Department of the Interior for review.  The Nation is open to those discussions.” 

The state insists the Senecas must stop fighting the arbitration panel ruling and continue with the payments provided in the original compact even though the payment language ends in 2016 and the state never questioned it at the time.

Now the matter is totally up in the air.  The three host cities, especially Niagara Falls, are desperate for the money.  With or without it, Councilman Voccio is firm in his belief that the city must cut expenses and begin that process immediately even though it is a political minefield when it comes to dealing with city bargaining units.

The two Democratic candidates facing off June 25 in the primary have both said the city must get involved in negotiations with the Senecas and especially going forward in a new compact after the expiration of the current agreement in 2023.  But if the slot payments don’t start soon and continue, Niagara Falls lawmakers will be up the river without a paddle.

Who’s to blame?  Well, there’s enough blame to go around, but certainly the state is the biggest culprit here by not reading the fine print in the compact when it was extended back in 2016 when there was no language for the slot payments to continue.  The Senecas read the compact and stopped paying.  The state missed the boat and is now hoping they will live to collect another day unless the Senecas prevail in their challenge.

Stay tuned!

 

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