A years-long legal dispute between the Seneca Nation and New York State over casino revenue sharing ended Wednesday night.
Seneca President Matthew Pagels announced that the nation and state officials have agreed to negotiate a new casino compact to replace the current pact, which expires in December 2023. Discussions are to begin within 60 days. As part of the agreement, the Senecas will release the revenue sharing payments that have been withheld since the dispute began in 2017 and will continue making quarterly payments to the state.
A percentage of the casino revenue payments are passed along to municipalities where the Seneca casinos are located. The Nation operates casinos in Niagara Falls, Salamanca and Buffalo.
Pagels said the Seneca Nation will seek greater control over its casino operations under a new compact. In the current deal, a state gaming commission regulates the casinos.
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He noted that the Senecas have "vigorously raised many compact concerns in multiple legal challenges" during the four-year legal fight.
“Rather than pursue continued legal action,” Pagels said, “we believe it's in the best interest of the Seneca Nation to address those important concerns through a negotiation of a compact that will provide clarity on our obligations and, equally as important, the obligations that New York State has to the Seneca Nation in return.”
Pagels noted that the Nation has invested more than $1 billion in developing the casinos and has made revenue sharing payments totaling $1.4 billion since the current compact went into effect in 2002. The three casinos employ about 3,000 people.
In a statement Wednesday night, Gov. Kathy Hochul said: “I am pleased to have reached an agreement for the resumption of payments on terms that serve both the State and the Nation and that benefit Western New York communities, and I look forward to beginning discussions toward a new compact.”
Pagels noted that the agreement will save the Nation $40 million in legal expenses, disputed fees and other costs.
“This financial gain,” he said, “comes at a time when our community continues to struggle with the health and economic impacts of the ongoing pandemic and as we are making significant investments on behalf of our people.”
The agreement follows a third federal court ruling last month in favor of Albany in the dispute over casino operations and revenue sharing.
U.S. District Judge William M. Skretny declared that the Senecas must abide by an arbitration panel’s 2019 decision awarding the state a quarter of their slot-machine revenues from the three Western New York casinos.
The Senecas had contended that the decision should be reversed because the U.S. Interior Department secretary had not reviewed the renewal of the gaming compact in 2016. They further maintained that the renewal didn’t specify that revenue sharing payments be continued.
The payments totaled more than $100 million annually and local municipalities depended on the funds. Since the dispute began, the Seneca Nation withheld about $450 million and placed it in an escrow account.
As part of a 2002 compact with the state, the Senecas received exclusive rights to operate full 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.
