The Seneca Nation of Indians is challenging an arbitration court ruling that says the tribe owes the state of New York nearly $25gm.
In January, the Senecas came out on the losing end of a dispute with New York State over the tribe’s refusal to share 25% of its three casinos’ slots revenue with the state, as stipulated under their tribal-state gaming compact. At the time, the three-person arbitration panel – in a split 2-1 decision – estimated the tribe owed the state around $200m.
Last week, the panel delivered its mathematics homework, which said the Senecas were on the hook for exactly $255,877,747.44. The panel further instructed the Senecas to resume the quarterly payments to the state that it had halted in April 2017. That first quarterly payment of 2019 is about to come due.
The funds that the Senecas would have been paying the state have been put into escrow, so the tribe won’t have to break the bank to honor its obligations. But the Senecas have now formally asked the federal Department of the Interior (DOI), which oversees the Bureau of Indian Affairs (BIA), to review an amendment the tribe claims the arbitration panel made to the gaming compact.
The tribe believes the new amendment “creates an obligation on behalf of the Seneca Nation that does not exist in the compact as it is written,” and awards New York State “more than a billion dollars in additional payments that they did not bargain for.”
The Senecas have publicly maintained that their original compact contained no language requiring the tribe to continue making payments to the state after the compact’s initial 14-year term expired. However, the payment halt was widely interpreted as the tribe expressing its displeasure with the state for authorizing new upstate commercial casinos, including one just outside the tribe’s exclusive casino territory in Seneca County.
The new commercial casinos have struggled to achieve their early revenue projections, and two venues were just granted approval to reduce their number of slot machines. In January, Empire Resorts announced it would shut its slots operations at its Monticello racetrack in the hope of boosting traffic at its new Resorts World Catskills casino.
New York casinos are eagerly anticipating the arrival of legal sports betting, which could get the green light in May. Under their gaming compacts, New York’s tribal casino operators can offer any gaming product offered by their commercial cousins, and while some tribes have confirmed their sports betting intentions, the Senecas have said only that they are “closely monitoring all the discussions” about sports betting.
