The Editorial Board: Third court ruling means Senecas must make overdue casino payments
Does three strikes in federal court mean the Seneca Nation has struck out in its dispute over casino revenue sharing? There’s no such thing as a sure bet in the gambling world, but we think the smart money is on “yes.”
The Nation is running out of ways to circumvent its obligation to pay the money it owes to New York State. U.S. District Judge William M. Skretny’s ruling against the Senecas last month should be the last straw.
The Senecas owe about $450 million in revenue-sharing funds that the Nation stopped paying in 2017, claiming that when its casino compact with the state was automatically renewed in 2016, the contract did not spell out that the payments would continue. That oversight in the pact’s wording did not mean that the agreement – which runs through 2023 – relieved the Senecas of their responsibility to pay the state 25% of the slot machine proceeds from their casinos in Buffalo, Niagara Falls and Salamanca.
The compact included a stipulation that disputes between the Senecas and New York State would be settled through binding arbitration. The revenue disagreement went to a three-person arbitration panel, which in 2019 ruled in the state’s favor. The Senecas insisted they were not bound by the “binding” part of arbitration and went to court to appeal the decision.
After a federal court ruled to uphold the arbitrators’ decision, the Senecas took their case to the U.S. Second Circuit Court of Appeals, which in February 2021 ruled against the Senecas, affirming the arbitration panel’s ruling. The Senecas filed a motion in September with U.S. District Court in Buffalo, asking Skretny to halt enforcement of the judgment against them.
The Senecas had obtained letters from federal officials questioning the legality of the revenue-sharing agreements. Skretny ruled in December that legal concerns raised by the U.S. Interior Department were not “on solid ground.”
Further, the judge wrote that vacating the judgment against the Senecas would impose a hardship on the state, “which has been waiting to receive the disputed payments for more than four years.”
Buffalo and Niagara Falls depend on their shares of casino revenue to fortify their budgets. The mayors of those cities were measured in their words when commenting last week, but both Byron W. Brown and Robert M. Restaino made it clear that it’s time for the Senecas to pay up.
Brad Maione, a spokesman for the New York State Gaming Commission, was more direct.
“The Nation has exhausted all of its appeals, the Judgment is final, and the Nation’s most recent effort to manufacture an extrajudicial avenue for delay has been denied,” Maione said. “The Nation should not continue to circumvent the Judgment or avoid its clear obligations” to make its revenue sharing payments.
Just two years remain on the gaming compact. We have noted before that the Senecas’ strategy may be to link the back payments to negotiations over a new pact. Both New York State and the Seneca Nation profit from their relationship but the state would need to be convinced that the Senecas are trusted partners before entering into a new deal. The evidence for that is shaky.
As Niagara Falls’ Restaino points out, the payment issue needs to be cleared up soon so that negotiations on a new compact can proceed.
“If you’re going to have that conversation six months before the compact expires, it is not going to be done well. ... This chapter needs to be closed and we need to move on,” Restaino told The News.
We could not agree more. It’s up to the Senecas to do the right thing.
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