NY State Demands Payments While Seneca Compact is Still Under Review

Seneca Nation Of Indians New York Casino Background
The state of New York is demanding an immediate payment of $540 million in disputed payments from the Seneca Nation. The said payment stems from the gaming compact between the state and the tribe negotiated in 2002.

In a statement, the governor’s office said:

“The Seneca Nation has been obligated to make these payments since April 12, 2019. The State has patiently waited almost three years for the Nation to fulfill its obligation. It is now time for the State to protect its own interests. Governor Hochul looks forward to this matter being resolved soon and resuming discussions on a new compact.”

In February 2021, a spokesman for then Gov. Andrew Cuomo said that the obligation of the Seneca Nation to the state had grown to $435 million, including $150 million owed to different municipalities. According to a lawyer from Lippes Mathias Wexler Friedman, LLP, which represents the state, that amount of obligation is now valued at $540 million.

State Threatens to Enforce Action

In a letter sent by government lawyers to the Seneca Nation, the state has demanded to receive the payments by March 16th, or else it will seek action to seek the funds. Meanwhile, the Seneca Nation is calling upon the state to allow the federal review of their contract currently being conducted by the National Indian Gaming Commision before making payments.

The Seneca Nation Council passed a resolution last February 12th requiting a review and final determination by the National Indian Gaming Commission on whether the additional payments demanded by the state of New York are valid and lawful under the Indian Gaming Regulatory Act.

According to Seneca Nation President Matthew Pagels, the state should permit the NIGC the time it needs to complete its review rather than threaten with “aggressive action”. Pagels said that the review is beyond their control although they have pressed and continue to press the NIGC for an update.

Seneca Drops Long-Standing Legal Battle

Last January, the Seneca Nation dropped its long-standing legal battle with the state of New York after entering into a settlement agreement with Gov. Kathy Hochul. Under the settlement, the Seneca Nation would pay the state more than $500 million in revenue-sharing which has been held in escrow since their 2017 dispute.

Under the existing compact which will end in 2023, the Seneca Nation paid 25% or roughly $100 million per annum in revenue sharing for video lottery machines at its casinos in Buffalo, Niagara Falls, and Salamanca in the Cattaraugus County. The dispute began in 2016 when the Senecas notified the state in March 2017 that they had made their final payment under the 2002 compact.

The state disagreed and the matter went to arbitration. The arbitration panel then sided with the state and and directed the Senecas to pay New York $225 million in revenue-sharing. The Tribe challenged the decision and in Federal court by asking a review by the National Indian Gaming Commission. The Senecas want that review to be completed before making payments.