The Seneca Nation of Indians wants the federal government to intervene in its dispute with New York State over hundreds of millions of dollars in revenue-sharing payments stemming from the tribe's casino operations in Western New York.
The Senecas on Friday asked a federal district judge to put on hold for 45 days any proceedings in the nation's legal efforts to overturn an arbitration decision that requires the nation to resume making those payments – worth $450 million – to the state. This would, the nation said, give the secretary of the interior the chance to review the gaming compact between the Senecas and New York.
A top Interior Department official last week wrote to Seneca Nation President Matthew Pagels offering to assess the legality of revenue-sharing provisions in the compact and expressing concern the department never formally approved key provisions in the latter years of the agreement.
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"The best course right now would be for the state and the nation to jointly request Interior Department review so that this matter can be resolved quickly and with legal certainty for the benefit of the Seneca people, our employees and the local communities that we support,” Pagels said in a statement.
The state isn't interested.
"It's clear that the nation is trying every option to find an arbiter to let them withhold money that every other decision-maker who has heard this case has said was owed to the state, some of which would be distributed to the localities that are sorely needing resources," a spokesperson for the office of Gov. Andrew M. Cuomo said Friday. "We have every confidence this will only lead to the same result."
This is the latest twist in the four-year fight between New York and the Senecas over the casino payments.
As part of the 2002 gaming compact, the Senecas agreed to share a percentage of the revenue generated by slot machines at the nation's three area casinos – in Niagara Falls, Buffalo and Salamanca – with the state. The state, in return, promised the Senecas "exclusivity" in operating casinos within a wide swath of Western New York.
The Senecas ended up paying the state $1.4 billion in the first 14 years of the compact, much of which was in turn shared with the municipalities that hosted the casinos.
After 14 years, the gaming agreement automatically renewed for another seven years and is set to expire in 2023. However, the terms of the renewal did not specifically say the revenue-sharing payments would continue and the Senecas stopped making such payments in early 2017.
The state contends the Senecas illegally halted the payments, a position supported by two members of a three-member arbitration panel in a 2019 decision. The terms of the gaming compact required the parties submit disputes to binding arbitration.
But the nation then took the disagreement to federal court, where a federal appeals court heard oral arguments last fall.
The state insists the nation already owes at least $450 million in revenue-sharing payments dating to 2017. The governor had projected the Senecas would make this payment to the state during the fiscal year that ended March 31, but that never happened.
Pagels had written to new Interior Secretary Deb Haaland on March 21 and Paula L. Hart, director of the department's Office of Indian Gaming, responded on April 15.
Hart wrote the department can't yet say whether the extension of revenue-sharing payments into the final seven years of the contract complies with federal law, which requires tribes receive something of value in exchange for payments that go beyond a state's actual costs to regulate tribal gaming facilities.
"We have not determined whether the state has offered meaningful concessions to the nation," Hart wrote. "Nor have we determined whether the value of any concessions provide substantial economic benefits to the nation in a manner justifying the revenue-sharing payments. We caution the parties about their reliance on the terms because we have not determined that they are lawful."
Friday's statement from the Senecas makes clear it believes the Interior Department letter gives it fresh ammunition in its efforts in federal court to overturn the arbitrators' award, a decision the nation believes is invalid. The Senecas also have chafed at the availability of slot machine-like games at state-run racinos in and near Western New York.
"The state has done nothing to justify any additional payments," Pagels wrote.
