Seneca Nation Argues 25 Percent Slot Machine Revenue Share Too High

Posted on: May 6, 2021, 09:14h. 

Last updated on: May 6, 2021, 02:18h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Seneca Nation of Indians says sharing 25 percent of its slot machine revenue with New York no longer allows its three casinos resorts the same economic benefits that the gaming facilities once did.

Seneca Nation casinos slot revenue compact
The Seneca Niagara Resort & Casino floor is seen with a bounty of slot machines. The Seneca Nation tribe says it should no longer be forced to share 25 percent of its slot win with New York state. (Image: Seneca Nation)

Seneca President Matthew Pagels opined this week that the ongoing expansion of casino gambling in New York and the Northeast has resulted in a saturated market. As a product of that, the Seneca casinos are pulling in less money, and claim continuing to share 25 percent of the slot gross gaming revenue (GGR) is now unrealistic. 

The gaming landscape has changed drastically here in Western New York,” Pagels stated. “I believe the Seneca Nation position is that 25 percent isn’t a fair assessment anymore, and that’s why we’re asking the state to submit to the Department of Interior.”

The latter part of Pagels’ comment relates to the Seneca Nation contesting a February federal appeals court ruling that concluded the tribe owes New York $435 million. 

Tribe Seeks New Terms

The Seneca Nation and New York in 2002 reached a 14-year Class III gaming compact that required the tribe to share 25 percent of its slot GGR with the state. The legal binding pact included a seven-year renewal clause, which was initiated to extend until 2023.

The tribe contested that the extension did not specify that the 25 percent GGR share mandate was required. The Native American group stopped sending slot money to the state in March of 2017.

Since then, the compact has been held up in legal courts, and the tribe has been putting the GGR into an escrow account. An arbitration panel concluded that it was “unreasonable” and “against common sense” for the Senecas to claim that the extension was free of the revenue sharing component.

A federal appeals court upheld the decision in February. But the tribe’s legal fight didn’t end there.

Late last month, the Seneca Nation filed a motion in New York’s Western District federal court in Buffalo seeking “relief” from the ruling. The Seneca motion conceded that it is on the hook for $435 million, but believes a recent letter from the US Department of the Interior (DOI) to the tribe shows why relief is perhaps warranted.

“We have serious concerns about the extension of revenue sharing during years 15-21, because we did not conduct an analysis of the extension,” explained Paula Hart, director of the Office of Indian Gaming at the DOI’s Bureau of Indian Affairs. 

Senecas Ask DOI for Help

Pagels told reporters that he hopes the DOI will intervene to determine a more favorable GGR share rate for the tribe, and reduce the $435 million judgment. 

In March, former Rep. Deb Haaland (D-N.M.) was sworn in as the DOI secretary. A member of the Laguna Pueblo, a federally recognized tribe in New Mexico, she is the first Native American to become a member of a presidential cabinet.

Pagels said Haaland and the DOI could “help us in negotiations for a new compact.”