Stop us if you’ve heard this one: The Seneca Nation owes New York State hundreds of millions of dollars.
The nation’s latest attempt to duck its obligation to hand over casino revenue-sharing money to New York State involves asking a federal district judge to put a pause on legal proceedings. The Senecas are pinning their hopes on a letter they received from the U.S. Interior Department, agreeing to review the legality of the 2002 gaming compact between the Senecas and New York.
The nation is entitled to exhaust all of its legal options, though the matter should have been settled two years ago when an arbitration panel decided in the state’s favor. Binding arbitration owes its existence to the consent of the arbitrated; both sides agree in advance to abide by it. The Senecas went to court to appeal the arbitration decision, the legal equivalent of losing a coin flip and saying, “Let’s do two out of three.”
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In the original compact, the Senecas agreed to share a portion of the revenue from slot machines at three Western New York casinos with the state, which then pays a portion to localities throughout the region. The Senecas paid the state $1.4 billion from 2002 to 2017, then stopped making payments, asserting that the compact – which runs through 2023 – did not specify any payments after the 14th year.
The compact called for binding arbitration to settle the dispute. After losing in arbitration, the Senecas appealed the decision, citing the fact that the U.S. Interior Department had not reviewed the Senecas’ claim about its obligations to pay. In February 2021, the U.S. Second Circuit Court of Appeals ruled against the Senecas, saying the arbitration panel’s ruling would stand.
The state says the Senecas now owe $450 million in revenue-sharing payments.
Seneca Nation President Matthew Pagels sees an opening thanks to a letter he received this month from Paula L. Hart, director of the Interior Department’s Office of Indian Gaming. Hart offered to review the legality of revenue-sharing provisions in the compact.
“We caution the parties about their reliance on the terms because we have not determined that they are lawful,” Hart wrote.
Whether an opinion from a federal cabinet department is enough to overturn decisions in a case that has been litigated in state and federal court is a matter that will likely be contested in more courtrooms.
The Office of Indian Gaming should expedite its review. The state, along with Buffalo, Niagara Falls and other localities, deserve the money they have waiting for since 2017.
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