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Seneca Nation resolves legal case with New York over tribal casino payments

The state of New York stands to receive hundreds of millions of dollars in back payments after the state and the Seneca Nation of Indians resolved a lengthy court case over their tribal gaming compact. An announcement of the settlement was made Wednesday night.

The exact amount has not yet been revealed, but the amount owed the state stood at around $450 million as of last fall. That funding will be split among the state and the western New York communities in and near where the tribe operates three Class III casinos.

In 2002, the tribal nation and the state agreed to a 21-year gaming compact. That agreement included a 14-year base deal with the sovereign tribal nation agreeing to give the state a share of its revenue from its casinos in Buffalo, Niagara Falls and Salamanca.

The remaining seven years on the compact were set up as an option automatically extended if neither side objected. While neither side did, Seneca Nation leaders said the extension did not include details regarding payments to the state.

That led both sides to arbitration, where a panel sided with the state in a split decision. In 2019, the tribal nation filed a lawsuit in a New York federal court claiming the panel did not follow the Indian Gaming Regulatory Act (IGRA), the federal law overseeing tribal gaming.

A federal district judge ruled for the state in November 2019, and an appeals court upheld that ruling last February.

Rather than continuing with its appeal, Seneca leaders asked U.S. District Judge William Skretny to vacate his ruling. They did that after federal officials told them they failed to review the seven-year option. A federal review of compacts is required under IGRA.

Federal leaders expressed concerns the Seneca Nation may violate IGRA if it made the back payment. The law requires tribal nations to be the “sole proprietary interest” in their casinos. IGRA also calls for any revenue-sharing agreements with states to include a return for the tribes.

Last month, Skretny ruled against the Seneca Nation’s motion.

In a video statement to tribal members Wednesday night, Seneca Nation President Matthew Pagels said he and other tribal leaders agreed to end the dispute.

In doing so, the tribe agreed to pay the revenue payments to the state. However, it also will receive more than $40 million in disputed fees and cost savings for the remainder of the compact, which ends in December 2023.

Revenue payments will continue to the state until the end of the current compact.

The settlement also calls for both sides to begin talks on a new compact. Those negotiations are set to begin within 60 days, Pagels said.

“The Seneca Nation has learned a great deal about gaming operations and regulations over the last 19 years,” he said. “We intend to use that knowledge to negotiate a contract that recognizes the Seneca Nation as the primary regulator of our gaming operations and also ensure that the proceeds from our gaming operations are used to meet the needs of our people first and foremost.”

Pagels added the Seneca casinos have been a significant economic engine for the nation and region as they have created thousands of jobs. He expressed confidence that Gov. Kathy Hochul will bargain in “good faith” for a new compact, especially since she’s a Buffalo native who has “first-hand” knowledge of the casinos’ impact.

Hochul, in a statement, expressed relief and optimism regarding the relationship between the two sides.

“I am pleased to have reached an agreement for the resumption of payments on terms that serve both the State and the Nation and that benefit western New York communities, and I look forward to beginning discussions toward a new compact,” the governor said.

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