State officials are doubling down on efforts to collect more than $500 million they say the Seneca Nation owes New York under a casino revenue sharing agreement.
The state warned the Senecas in a letter this week to pay up by Wednesday or face “enforcement and collection efforts.”
The money is in an escrow account with Fifth Third Bank and the state will seek a court order for the bank to turn over the funds.
The state and Seneca Nation battled in federal court for years until reaching an agreement earlier this year for the Senecas to turn over $539.7 million in disputed casino revenue payments by Jan. 22.
But some Senecas said Seneca President Matthew B. Pagels acted on the agreement without properly consulting Nation members, and the Nation’s 16-member Council decided in February to authorize release of the funds only until after the federal government completes a review of the revenue-sharing arrangement between the state and the Senecas.
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That review is ongoing, and Pagels on Friday said it was not the time for state officials to “revert to bullying and greed.”
Pagels said the review by the National Indian Gaming Commission was out of the Senecas hands, and he urged the state not to circumvent the review.
“We have pressed, and continue to press, the agency for an update. We hope that an official report from NIGC will come soon,” Pagels said in a statement. “Rather than threatening aggressive action, the State should permit the federal agency responsible for overseeing Indian gaming issues the time it needs to complete its work.”
Commission spokeswoman Mary Parker said she could not comment on when the review will be finished.
The state sent a letter earlier this week demanding payment by Wednesday under the terms of its Jan. 12 agreement with the Nation.
Otherwise, Gregory M. Starner, an attorney hired by the state, said the state will attempt to collect on all amounts due under a 2019 federal court judgment that state officials maintain obligate the Senecas to pay nearly $565 million, plus interest and recovery of fees and costs to enforce the judgment.
"The Seneca Nation has been obligated to make these payments since April 12, 2019," a spokesman for Gov. Kathy Hochul said. "The State has patiently waited almost three years for the Nation to fulfill its obligation. It is now time for the State to protect its own interests. Governor Hochul looks forward to this matter being resolved soon and resuming discussions on a new compact."
As part of a 2002 compact with the state, the Senecas received exclusive rights to operate casinos in Buffalo, Niagara Falls and Salamanca, with the understanding that 25% of slot proceeds would be shared with the state, which passed along a portion of that money to the casino host cities. The annual casino revenue sharing payments amounted to more than $100 million, and local municipalities counted on the funds to help balance their budgets.
The compact, which runs through 2023, included an automatic renewal at the end of 2016 that took effect for the remainder of the compact term when neither side objected to it.
The Senecas stopped paying in 2017, maintaining that the renewal of the original agreement didn’t specifically call for further payments to the state.
Three federal court rulings upheld a 2019 arbitration panel’s determination that the Nation should pay up. But the National Indian Gaming Commission expressed reservations about whether the amount the Senecas were expected to pay the state was fair and legal per the requirements of the federal Indian Gaming Regulatory Act and began a review last fall.
