Industry Reports

Seneca Nation Could Complicate Matters for Casino Host Communities

This Wednesday brought the highly anticipated order coming from an arbitration panel in New York. The Seneca Nation of Indians would have to pay some US$255,877,747.44 in allocations to New York State generated by the casino operation of their tribal venues. Moreover, the Native American tribe would have to recommence with its regular allocations at the end of every quarter of the fiscal year, as the compact for operation mandates.

Ever since March 2017, the tribe and New York State have been in a feud in relation to regular gaming revenue allocations to the host community of the tribal casino venue. Instead of taking matters to court and further complicating the process, both parties wanted to see a quick solution with the help of a three-party arbitration that had the task of finding a mutually beneficial solution of the conflict. This week saw more development on the subject.

Allocations Owed Reach US$255,877,747.44

Two of the panel members maintained their position voiced in January, that the tribe has to pay the owed amount. In addition to that, it should also continue with the mandatory quarterly allocations coming as compensation for casino venue operation. The tribe also has venues in operation in Niagara Falls, Buffalo, and Salamanca.

The third individual in the panel did no place their signature this week. Kevin Washburn, the University of Iowa law school dean and member of the Chickasaw Nation of Oklahoma sided with the Native American tribe. The Native American tribe put an end to their allocations in March 2017 and the reason for that was that 2016 saw the end of the mandatory 14-year allocation period listed in their compact for operation.

This meant that they are no longer obligated to submit the quarterly allocations negotiated in the revenue-sharing agreement. Some 25 percent of the gaming revenue generated is being allocated to the host community on an annual basis. This would have to become a common practice once again, maintaining the fair conditions of the compact.

Buffalo, Niagara Falls, and Salamanca Await Casino Cash

The state and communities to the likes of Buffalo, Niagara Falls, and Salamanca are able to benefit from the portions of gaming revenue, but over the past more than two years they have been struggling without the help. Niagara Falls had to borrow more than US$12 million in order to fill in the hole in the annual budget. It uses the allocation support for various projects around the community and for the second year in a row, its absence is palpable.

In the time window between 2002 and 2016 tribal casino operation managed by the Seneca Nation was able to boost host communities with an overall US$1 billion. Seneca Nation President Rickey Armstrong Sr. stated that the tribal nation would weigh on the decision and issue its position soon. Gov. Andrew M. Cuomo expressed his position that the problems could continue in the foreseeable future as well.

The allocation reaching millions of dollars are currently into escrow. However, the actual paying remains up in the air. The tribe could take advantage of the Indian Gaming Regulatory Act and involve their exclusivity protection. The tribe agreed to the amount it owed but for the time being, the only thing done is inking the contract for payment in accordance with the arbitration panel. If the tribe decides to avoid the payment for one reason or another, the state has the permission to take matters to court in the federal court in Buffalo.