There might actually be a glimmer of hope in the standoff between the state and Seneca Nation of Indians over the sharing of casino profits. The leader of the Seneca Nation now says he is willing to go along with the governor’s request for arbitration to settle the dispute.
Having both parties sitting down with the arbitration panel will be the first step in easing the cash crunch for communities, school districts and at least one hospital that depend upon casino revenue sharing. Better still would be for both parties to sit down together and hash out their differences quickly.
Hanging in the balance is the more than $100 million paid annually to the state, which then passed some of the money along to municipalities. It is funding those entities have relied on for 14 years. The City of Niagara Falls, host to the Seneca Niagara Casino, is in a particularly dire financial situation, with casino money representing 15 percent of its operating budget. Taxpayers will know more about the impact when the mayor submits his 2018 budget proposal, due by Oct. 1.
The Senecas also operate successful casinos in Buffalo and Salamanca.
Those municipalities counting on the casino cash should not be worrying about having it cut off, if we are to believe Seneca President Todd Gates: “And we’ve always been a good neighbor here in Western New York. We’ll continue to be a good neighbor. Western New York is our home. We’re not going anywhere and we have good relationships with a lot of local leaders and the business community.”
He can prove that by complying with the understanding of the original compact and continue sharing profits with the localities and state.
In an ideal world the arbitration panel would issue its ruling and both sides would accept it. However, both sides have agreed that the arbitration decision can be challenged in federal court. If it gets to that point, as many expect will happen, the case will be heard in Buffalo, where there is a yearslong backlog of cases.
This dispute all circles back to the original compact. The Senecas wanted the exclusive right to operate Las Vegas-style casinos in Western New York. They got it. In return, they agreed in 2002 to pay the state 25 percent of slot machine revenues.
It has, as reported in The News, added up to more than $1.4 billion in payments to Albany, which shares a portion of the Seneca casino proceeds with local governments, including several school districts.
The Seneca Nation contends that the compact speaks to a payments structure that extended through the first 14 years of the compact. Once that period was over, the Senecas say, no more money was owed to the state. (The agreement, unfortunately, has no specific language about the years through 2023).
In March, the Seneca Nation set about pulling the rug from underneath the state and localities by announcing that it was ending all payments as of March 31.
Cuomo insists the Seneca Nation is violating the terms of the compact. He has threatened to locate a non-Indian casino in Niagara Falls, which would sap the profits from the Seneca Niagara Casino. When he sought arbitration for the dispute, Seneca leader Gates at first balked. Both sides threw verbal barbs at each other, but now they seem to be on the same page on arbitration. Even so, governments across the western end of New York are facing holes in their budgets potentially for years. That’s why a swift resolution of the dispute is important.
Barring that, if the Seneca Nation is truly interested in being a “good neighbor,” it will resume the casino payments while the arbitration process plays out. At the same time, the state should suspend talk of locating a competing casino in Niagara Falls. Too many people are about to take a major financial hit to allow the current situation to continue.