Revenue-Sharing Payments Issue Still a Problem in Niagara Falls

by Jim Hall

Niagara Falls New YorkAn issue involving revenue-sharing payments and the Seneca Nation of Indians may result in Niagara Falls suffering from money shortage.

Across the United States, individual states and cities rely on funds created from casino gaming. In states where casinos are in operation, laws are in place that see each venue pay a certain amount to the state or local municipality based on specific tax rates or regulations. When it comes to tribal gaming venues, such payments are made based on compacts between the tribe and state. In New York, the Seneca Nation of Indians have been in dispute over revenue-sharing payments from slot gaming and the Niagara Falls area may suffer financially if a resolution is not found.

Niagara Falls in Trouble Financially

Yesterday, the Comptroller’s Office of New York issued an audit that showed the Niagara Falls area will have depleted their cash reserves by the end of the year. This will happen only if the payments from the Seneca Nation do not continue. Reportedly, the mayor of Niagara Falls, Paul Dyster, sent a letter to the state comptroller stating that the city has adequate reserves in place that will last within the course of the dispute between the city and tribe. Non-essential spending in Niagara Falls by the city was stopped on the 1st of July. The city also began to look into what they could cut from the 2018 budget in case cuts were needed.

The Seneca Nation runs three casinos in New York State. Back in March, the tribe decided to stop the payments to the city due to the fact that they felt their tribal gaming compact did not require them to make such payments to the state or host communities of casinos. The tribe bases their opinion on the expiration of their 14-year contract that ended in 2016.

New York Governor Opposed

Andrew Cuomo, the governor of New York, is not happy with the interpretation of the terms within the compact by the tribe and has rejected their claims. Last week, the governor told the state attorneys to file a demand for binding arbitration to begin. The governor also threatened to allow a new commercial casino to be created in Niagara Falls. This would hurt the tribes bottom line as their most profitable gaming venue is located in this area. New York claims there is an automatic seven-year extension included in the compact.

Todd Gates is the president of the Seneca who stated that the tribe is ready for arbitration due to their belief that they have followed the compact and the state has not. The tribe says that the state was in violation of the compact by allowing seven new casinos to be created in the state, including the new del Lago Resort & Casino.

The del Lago has been able to earn only $151 million within the first year of operation which is far under the $262 million that operators estimated would be earned during that time frame. Another venue that is new in the commercial casino industry of the state is the Rivers Casino and Resort. Opened in February, this casino has also earned less than expected. From February, the casino has earned less than $82 million with projections set at $181 million to $222 million for the year. It is doubtful that the venue will be able to make a comeback before the year’s end to be closer to these estimates.

For now, Niagara Falls will have to wait and see what will happen in regards to the revenue-sharing agreements. It will not be surprising to see this issue continue on for many more weeks or even months.