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New York State and Seneca Tribe Reach Impasse Regarding Casino Revenue Remittance

Posted on October 10th, 2010

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New York State Governor David Paterson is giving a warning to a Native American tribe that he will cease the gaming compact of the state with the Seneca Nation of Indians over the latter’s default of revenues from slot machines that are already past due. These revenues are supposed to come from the three Western New York Casinos of the tribe which includes the Seneca Niagara Casino located in Niagara Falls. A letter was given to the tribe in the middle of the week delivered Wednesday by the chief counsel of the governor, Peter Kiernan, informing Barry Snyder Sr., the Seneca Nation President, of the plans of the state to bring up the negotiation element of the compact in the event of the failure of the nation to remit to the state more or less $105.5 million in gaming income payments for the year 2009 and approximately $108.6 million for 2010. Kirenan, in the letter, stated, “These non payments, coupled with the nation’s failure to remit in timely fashion the state exclusivity contributions from past, uncontested calendars, constitute a material, uncured breach. Accordingly, in absence of a prompt resolution to this matter, the state is entitled to terminate the nation-state gaming compact.” Paterson’s letter addresses the leaders of the Seneca Nation to meet with the officials of the state within 14 days to

The gaming accord allows for the Seneca Nation of Indians, under the Seneca Gaming Corp., its subsidiary, to control three Class III gaming installations in Western New York State, including Seneca Niagara Casino located in the Falls, Seneca Buffalo Creek Casino located n Buffalo and Seneca Allegany Hotel and Casino located in Salamanca. All three casinos combined have more than 4,000 people in their employment roster. In a statement issued by the nation’s President the evening after the letter was sent, Snyder said that the state is the violating party in the compact, as it has, for more than a couple of years, authorized “Moxie Mania,” a device much like a slot machine put up in bars in the area of Western New York. Moreover, the state has allegedly brought in slot machines at racetrack casinos run by the state which are within the Western New York exclusivity zone of the Nation. Moreover, Snyder also exacts the state has breached the agreement by levying “excessive and unreasonable” billings by the state police since the adoption of the compact.

Snyder was quoted in saying, “I have no idea why the state violated our compact, and no idea why it took the governor’s office nine months to agree to discuss the state’s breach of the compact terms. We certainly look forward to hearing the explanation of why they violated our compact.” He also added though that he is willing to meet with state officials. “We look forward to a visit by state officials to Western New York to discuss these very important matters. Perhaps through this process we can also get some simple and timely back up documentation that can explain precisely what it is that the New York State Police gaming unit does under the compact.” Snyder remarked that the nation advised the state as early January of this year that the Nation believes that the office of the governor is in violation of the exclusivity arrangement with the Nation by admitting gaming devices to be set up at non-Indian positions in Western New York, including the Hamburg Casino, which is run by the state.

Snyder hints that the governor’s office did not reply to the nation’s invitation to talk about the issue. He added that in August, the tribal council of the nation espoused a declaration instructing all exclusivity funds be kept back from payment to the state which in turn also affects financial support to communities that host the casinos like Niagara Falls. In his argument, Snyder said the nation is within its rights to keep back payment if it ascertains that there has been an infraction by the state in the compact. He further said the state cannot lawfully cease the compact until an arbitration board has ascertained that there has indeed been an “uncured, material breach.”