Seneca Nation Asserts Right to Offer Sports Betting Despite New York’s Declaration of Compact Violation

Posted on: July 22, 2019, 12:06h. 

Last updated on: July 22, 2019, 12:17h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The Seneca Nation said Friday it was “making preparations” to launch sports betting at its three casino properties in western New York State. The statement comes as the first legal sports book opened its doors last week at the Rivers Casino in Schenectady, a commercial casino.

New York sports betting
The Seneca Nation expects to launch sports betting shortly at its three casinos in western New York State, including the Seneca Niagara (pictured) but it’s unclear how its $220 million dispute with the state will impact its ambitions, if at all. (Image: Seneca Nation)

The Nation was previously the only of New York’s four tribal operators that had yet to commit to launching sportsbook operations.

Tribal operators are permitted to offer sports betting under the terms of their compacts, provided it exists commercially elsewhere in the state, but for the Senecas it may be more complicated. New York State has declared the Nation to be in breach of its gaming compact.

The Nation is engaged in a $255 million-and-counting revenue-sharing dispute with the Governor’s Office in Albany and is currently seeking to have federal judge vacate a legally binding arbitrators’ decision that puts it on the hook for the full whack.

Compact Spat

The Seneca negotiated a compact with New York in 2002. This granted it exclusivity on casino gaming in a large part of Western New York in return for a quarter of its slots revenues. But in March 2017, the tribe began withholding payments because, it claimed, its obligation to make them had expired in 2016.

The original compact was set to roll over after 14 years, provided no objection was raised by either party. But the Seneca argue there is no language in the compact that states revenue-share payments should continue after the 2016 rollover.

The tribe claims the arbitrator’s ruling in favour of the state amounts to an illegal amendment to the compact, which would need to be approved by the Department of the Interior to be legitimate, but the department has declined a request to examine it. Nevertheless, the tribe believes New York has violated federal law.

This means the standoff will continue — at least until a federal judge in Buffalo gets to rule on the situation. Where that leaves the Seneca and sports betting is unclear, and Assemblyman Joseph M. Giglio (R-148th) admitted to the Olean Times Herald that he had no clue either.

State ‘Cooperative’

The Nation, for its part, was assertive of its compact rights in its statement on Friday.

“Our right to offer this now-approved offering is clearly outlined in our compact,” it said. “As we continue to work through the process of finalizing our plans, our discussions with New York State officials to date have been cooperative.”

It was looking forward to “making this amenity available for our patrons in Niagara Falls, Buffalo, and Salamanca,” it added.

The Nation is keeping the disputed funds in an escrow account so it can pay up if it ultimately loses the fight, but in the meantime the residents of Niagara Falls, Buffalo, and Salamanca are going without the funds they formerly received as host communities.

Cash-strapped Niagara Falls, which had become dependent on the payments, is particularly hard hit and last year had to be bailed out by the state.