Seneca Nation Files Federal Lawsuit Over $255 Million Casino Rev-Share Battle with New York

Posted on: June 7, 2019, 06:09h. 

Last updated on: June 7, 2019, 06:09h.

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

The Seneca Nation – the tribal casino operator involved in a $255 million-and-counting revenue-sharing dispute with the State of New York – is asking a federal judge to vacate a legally binding arbitrators’ decision  which in March placed the tribe on the hook for the full whack, The Buffalo News reports.

Seneca
Seneca President Rickey Armstrong Sr. believes an arbitration decision that favors New York in the revenue-share dispute amounts to a compact amendment, which must, by law, be signed off by the federal government. (Image: The Business Journals)

This comes after the US Department of the Interior on Wednesday turned down the Seneca’s request to examine the ruling, which the tribe claims amounts to an illegal amendment to its compact with the state.

The Seneca negotiated and signed off an initial compact with New York in 2002, which granted it exclusivity on casino gaming in a large part of Western New York in return for sharing a quarter of its slots revenues, some $100 million a year.

But the tribe began withholding the payments in March 2017, claiming its obligation to share revenue had expired in 2016. The Seneca have put the disputed payments into an escrow account.

Seneca: New York Violating Federal Law

Under the terms of the original compact, the agreement was set to roll over after 14 years provided there was no objection from either party, which it duly did, in 2016. But the tribe argues there was no specific stipulation that payments would continue beyond that date.

The state said this argument had no “basis in law or logic” and demanded arbitration. The Seneca agreed and said they would abide by the arbitrators’ decision.

The three-person panel ruled in the state’s favor by 2:1, although it did acknowledge that the language in the compact contained some ambiguity.

But the tribe is sticking by its original reading of the language, arguing that if the state wants to alter it, it needs to be signed off by the federal government, because not to do so would be a violation of the federal Indian Gaming Regulatory Act.

“You cannot simply skip past the fact that the arbitration decision and amendment must concur with federal law and, right now, the amendment and the law conflict with one another,” Seneca President Rickey Armstrong Sr. said in an official statement Thursday.

‘Stall Tactics’

A spokesman for New York Gov, Andrew Cuomo’s office described the development as “another stall tactic” by the Seneca, who continue to “move the goal posts to avoid paying their obligations under a process that they signed on to.”

The arbitration panel ruled in favor of the state months ago, and the Seneca Nation needs to start paying what’s owed to these local communities without any further delay,” he added.

The Seneca said it wants to sit down with Gov. Cuomo to negotiate a “mutually agreeable resolution,” which could be then submitted to the DOI for approval. Until that happens, Armstrong said, “this litigation will continue for the foreseeable future, leaving the Seneca Nation and the local governments who benefit tremendously from our gaming operations in legal and financial limbo,”

Cuomo has so far refused to meet with the Seneca to discuss the issue.