ALBANY – The Seneca Nation of Indians is ending all casino payments to the state government effective next week, setting up a confrontation with Gov. The decision stops the flow of. The members of the Seneca Nation receive direct benefits totaling millions of dollars from the Nation. While some services are restricted to areas within the external boundaries of the Seneca Nation territories, others are for every Seneca, regardless of their current location.
New York’s gambling industry is expanding rapidly. Not long ago, this state approved plans to allow additional casinos and sports betting operations. Unfortunately, New York’s casino dispute with the Seneca Nation is still ongoing.
Lawmakers in New York are in a bitter disagreement with the Seneca over casino tax payments. Today, we’re going to look at what this dispute is all about. We’ll also talk about what state officials are doing to end it.
New York Lawmakers Approve Gambling Expansion Plans
In the past, New York was known as one of the least gambling-friendly states in the US. Lawmakers here showed very little willingness to open any form of gambling aside from tribal casino gaming. Over the past two years, however, state officials have begun to change their stance.
Several bills were presented here to significantly expand the state’s gambling industry. Much of these expansion plans focused on sports betting. With PASPA now gone, every state can set its own laws on the sports gambling industry. Several New York politicians began actively campaigning for sports betting to be made legal.
Seneca Nation Casinos
The state approved a sports betting bill in June. On July 16th, the first legal sports wager in New York was made by Gary Pretlow, a state lawmaker instrumental in getting this industry legalized and regulated. Today, most of the state’s casinos operate land-based sportsbooks. It’s proving to be an extremely lucrative industry, bringing in major revenue earnings through taxes.
In April, New York lawmakers also approved plans to add several new casinos to the upstate area. Several popular casinos already operate in this area, including Resorts World Catskills, which was recently sold to investors in Malaysia. Now, both tribal and commercial casinos are operating here. Online casinos in NY are still unregulated.
Unfortunately, officials are engaged in a major dispute with one of the largest tribal casino operators in the state.
New York’s Casino Dispute with Seneca Nation, Explained
For years, the Seneca Nation has operated a casino in Salamanca. Since first opening, this casino has been required to pay a 25% tax fee to the state on its revenue from the Class II bingo games it was able to offer. In March of 2017, the casino was given a Class III gambling license, granting it the power to offer slots and table games.
The tribe now believes that it’s no longer required to pay the 25% tax fee. Tribal leaders argue that this tax fee was only required from the Class II license. The Tribe believes that there was no provision stating that the revenue sharing would continue.
State officials obviously disagree. An official arbitration panel quickly ruled that the tribe owed $255 in back payments. The Seneca Nation is now working to fight this ruling in the courts. Unfortunately, this dispute is showing no signs of slowing down anytime soon.
It’s taking a toll on the city of Salamanca, which relies on revenue from the casino to operate. Now, state officials are working on ways to help this city out.
New York Sends Salamanca $2.35 Million in Revenue Relief
New York’s casino dispute with the Seneca Tribe has been going on for years. During this time, the tribe has sent no money to Salamanca, where their casino is located. It’s a major disappointment for this city, which uses the money to fund social projects.
Seneca Nation Casino Payments No Deposit
Government officials in New York have sent a check to Salamanca for $2.35 million. This city generally receives nearly $5 million in annual revenue from the Seneca casino. Kathy Sarver, City Comptroller of Salamanca, states that the rest of the money would also come from the state if the tribe does not agree to pay.
“If it is settled, then there won’t be any need to advance us any money because we’ll be getting the payments from the casino,” Sarver said. “It’s just an advance. If and when the casino compact issue is settled, we’ll have to pay the state back this money.”
It’s unclear exactly when this fight will end. Both the tribe and state officials believe that they are in the right.
Make sure to stay tuned for more updates to New York’s casino dispute with Seneca Nation over the next few months!
Niagara Falls Mayor Paul Dyster said he is looking forward to an influx of some $30 million after a state arbitration panel decided casino revenue sharing should continue.
In a statement, Seneca Nation President Rickey Armstrong remained unclear whether casino payments will continue, despite the decision.
'Despite the panel finding that the Compact, as written, simply does not address the topic of revneu share beyond Year 14, a majority of the panel members determined that an obligation exists to continue revenue payments to the State,' Armstrong said. 'We continue to believe, as anyone who has read the Compact, that the Nation's Compact obligation was fulfilled, and we believe we had an obligation to the Seneca people to defend the Compact as it was written and agreed upon.'
Even so, Armstrong said, the nation prepared for arbitration's decision - for or against the Nation. He said the decision is being reviewed as to how to respond 'and move forward.'
Dyster said he is taking that last notion - 'and move forward' - to mean payments will continue. Since the Seneca Nation began its gaming operations in 2002, it has sent more than $1 billion in revenue share contributions to Albany, which has shared it with casino municipalities, like Niagara Falls.
'The next step, I believe, is for the state and the Nation to come together and to compare their figures as to the exact dollar amount that is owed,' Dyster said. 'The formula is the same formula that existed before. That's basically what the arbitration determined, but they have to agree on the exact dollar amount.'
Dyster said payments due are for all of 2017, 'which includes the final quarter of 2016, plus the first three quarters of 2018, with the final quarter of 2018 not due until the end of March, I believe.'
He said the payments have been 'trending slightly downward' the last several years, as the casino market has become more competitive, but the last annual payment was over $16 million. So he is expecting twice that in delayed payments.
'So you've got the better part of two years of payments with roughly $16 million the last dollar amount that was paid, so in the vicinity of $30 million, give or take, and we will know that over the course of the next week or two.'
Prior to Dyster issuing his 2019 budget proposal, the state stepped in to front the city of Niagara Falls $12.3 million it said was owed in casino payments. Had the arbitration decision favored the Senecas, New York State would have filled at least that $12.3 million gap in the Falls city budget.
While $6 million is only half that, in the Southern Tier city of Salamanca, it is 60 percent of a $10 million city budget. Just under a quarter of the property in Salamanca is taxable, and the city has had $10 million budgets cut to $9 million when a fight between the Seneca Nation and Albany cut off the flow of revenues from nation casinos.
Another of those casinos is in Salamanca. Mayor Mike Smith said city leaders had long built up reserves for the possibility casino revenues would stop flowing again, but casino cash is a large part of the budget.
'Oh, yes it is and that's why we had put money away,' Smith said. 'When I came into office - and this is my second two-year term now - when I came into office, we were sitting on a pretty good stack of change and we still have right around $10 million undesignated that, like I said, we have for an emergency.'
Smith said if the cash starts flowing again, the city would probably fill some of the positions it has left vacant since the fight with Albany cut off casino revenues, but it will keep that reserve.
'Our budget process this year will be unaffected,' he said. 'Maybe we can hire and fill some of the city departments that have been running short-handed for the last two-plus years, but as far as that, no we're not making any 'jackpot, let's spend the money.' No, we're not doing that.'
Smith said he is looking forward to the state resuming their payments.
'We had held all along that the Seneca Nation did not and does not owe the city, any of the cities, any money. The Nation pays the state. The state pays the cities. So it's always been an issue, waiting for the state to make their payments.'
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