New York Seneca Nation Must Pay Estimated $355M from Slot Revenue Following Court Ruling

Posted on: November 9, 2019, 08:43h. 

Last updated on: November 10, 2019, 09:52h.

Ed Silverstein @casinoorgedsilv Read More
Expertise: Legal, Tribal Gaming.

A New York federal judge Friday effectively ordered the Seneca Nation to pay hundreds of millions of dollars in slot machine and some video lottery revenue it held back from New York State and local communities over a disputed money sharing compact.

New York Gov. Andrew Cuomo has won a legal victory after a federal judge in effect ruled the Seneca Nation must pay hundreds of millions of dollars to the government in withheld slot machine revenue. (Image: Mark Woodward/New York Daily News)

Based on local news reports, it appears the total the Seneca Nation will owe exceeds $355 million. The amount was estimated at over $255 million as of last December, and another approximately $100 million has accumulated since then, the Buffalo News reported.

In his decision, Buffalo US District Court Judge William M. Skretny basically agreed with the findings of an arbitration panel, which ruled earlier this year the tribe must make the payments.

Under a 2002 revenue sharing compact with the state that gives the Senecas exclusive rights to run gaming venues in the region, the Nation pays approximately $100 million annually. The Senecas pay 25 percent of the revenue from slot machines and video lotteries under the agreement.

But two years ago, Seneca officials said they would stop paying the government. The Senecas argued the required payments stopped in 2016 under the compact.

But the State of New York disagreed, saying the revenue payments continue at least through 2023. The revenue goes to the state and local government where the casinos are located.

Gov. Cuomo’s Office Looks Forward to Getting Money

Unless an appeal is filed, the Senecas will likely need to make the back payments soon. The tribe apparently has been placing the disputed funds into an escrow account.

The judge’s decision was praised by an adviser to New York Gov. Andrew Cuomo, a Democrat.

A court confirmed what we’ve said all along: the Seneca Nation needs to fulfill their obligations, make their neighbors whole, and pay what they owe via their gaming compact,” Rich Azzopardi‏ said in a tweet. “Time to end this charade, stop using the courts to delay & pay what they owe.”

The Seneca Nation owns three casinos in western New York State — in Buffalo, Niagara Falls, and Salamanca. Since 2002, the tribe has paid over $1 billion in revenue sharing to local and state governments, the Buffalo News reported.

On Friday, there was no indication whether the Senecas would appeal the federal court ruling.

“We understood the reality that the arbitration and court proceedings may not ultimately uphold the language of the Compact as written,” Seneca Nation of Indians President Rickey Armstrong, Sr. said in a statement quoted by NYup.com. “Yet, it is our obligation to defend our agreements, so they are not compromised for the benefit of others. We will take the time to review today’s decision and determine how the Nation will proceed.”

Skretny rejected the tribe’s request to have the US Department of the Interior weigh in on the dispute.

New York Cities Hurt by Withheld Payments

The city of Niagara Falls was especially hard hit by the cessation of payments. Over a year ago, Cuomo sent $12.3 million in financial relief to the city, roughly the amount it would have expected to receive from the tribe.

The Seneca County Board of Supervisors even considered a motion that would have demanded the state shut down the Nation’s three casinos in western New York and pay each county the revenue it would have received had the tribe not stopped making payments.

Casino.org reached out to the Seneca Nation for comment, but there was no immediate response on Saturday.