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‘Historic day’ as casino feud is settled

An acrimonious dispute between the state and the Seneca Nation of Indians ended Thursday with a deal to re-start tribal casino revenue payments to Albany and localities in return for New York banning any new gambling competition in Western New York.

The agreement, announced in Niagara Falls by Gov. Andrew M. Cuomo and Seneca President Barry Snyder Sr., came after four years of name calling and legal wrangling by both sides.

“It’s easy to keep fighting ... and it’s hard to find the path of compromise and peace and it took sober minds and open minds and gracious personalities to do that,” Cuomo said in announcing the deal with Snyder.

“It’s a historic day for us,” Snyder said.

The pact has local and statewide impact. It ends Cuomo’s threat to let a non-Indian casino operator into Western New York, and possibly Niagara Falls, and now leaves just three regions upstate – the Southern Tier in the Binghamton area, the Albany area and the lower Hudson Valley including the Catskills – as initial sites where the first four of seven casinos may be located under a gambling expansion package being negotiated at the Capitol that could go before voters in a statewide referendum this fall.

Cuomo said Western New York will still have a stake in that referendum because if it passes all counties in the region would share in the Seneca Nation casino proceeds instead of just the three municipalities that currently host casinos. He is proposing dropping the state share of Seneca casino revenue sharing so more of those counties could get a portion while keeping whole annual payments intended for Niagara Falls, Buffalo and Salamanca.

No state legislative approval is needed for Thursday’s agreement, but the Seneca Nation’s council must OK it. Snyder said he saw no problems with that happening, though some Senecas have expressed feelings in the past that the tribe should stick with an ongoing binding arbitration process that began last year as a way to get a better deal.

In an interview, Cuomo termed as a key turning point a Wednesday night session at the Capitol with Snyder and a number of council members, at which they discussed everything from the dispute to his Native American ties he forged when he was the nation’s housing secretary in the Clinton administration.

“Having a thorough conversation with the Council was helpful,” Cuomo said.

The agreement, a five-page document that was not immediately released, ends a dispute that began in 2009 when the Senecas accused the state of violating the terms of a 2002 compact giving the tribe certain exclusive gambling rights in a large area of Western New York extending from the center of the Finger Lakes area to Lake Erie.

Halting a mandate to turn over 25 percent of slot machine revenues at its casinos in Niagara Falls, Buffalo and Salamanca because they felt the pact had been violated, the Senecas’ ran up a tab to the state of $559,442,218 as of May 31.

The agreement lets the Senecas keep $209.8 million of that, with the state getting the same amount. The three local host communities will share $139.9 million, with $89 million going to Niagara Falls, $34.5 million to Salamanca and $15.5 million to Buffalo.

The Senecas will also pay $54.1 million of $67.1 million owed for State Police coverage at casinos and background checks the agency performed on casino employees and vendors, as well as all the $4.3 million it stopped paying for casino-related work done by a state gambling regulatory agency. The deal ends State Police law enforcement coverage at the casinos, a deal similar to that at two other Indian casinos in New York state.

A Cuomo administration official, speaking on condition of anonymity, said the deal does not specifically extend the term of the 2002 compact, which features an initial end date of 2016. But another state source said both sides did a “wink wink” deal to ensure a seven-year extension clause kicks in, taking the compact’s lifespan until 2023.

Unlike recent casino agreements Cuomo made with Indian tribes in central and northern New York, Thursday’s Seneca deal involves no side issues unrelated to the casino compact dispute. For instance, it does not address tax-free cigarette sales by the tribe, and it also does not, as the Senecas had sought, give them the state’s blessing to build a fourth casino in their exclusivity zone. The tribe has been talking about opening a new casino in Monroe County.

Forging the deal was months in the making, and came with a week left in the legislative session in which Cuomo’s gambling bill called for placing a new casino in Western New York unless the Senecas resolved the $600 million revenue sharing dispute before lawmakers left Albany for the summer. The deal Thursday was big enough that Cuomo took two State Police planes to Niagara Falls International Airport to accommodate his senior advisors and a contingent of Western New York Republican and Democratic lawmakers.

Racetrack-based casinos operating in Hamburg, Batavia and near Rochester will face changes under the deal. The state Lottery Division in 2008 began allowing those tracks to market themselves as “casinos,” instead of as “gaming” or “racino” facilities. Now, the word “casino” in Hamburg Casino and the other two facilities will be banned and will have to be taken down from any entrance signs, billboards, T-shirts or any other place where the word is used. They will also not be able to market their video lottery terminals – which look, sound and play like slot machines – as “slot machines.”

“In building future customers in the future, it will have an impact,” Michael Kane, president of the Western Regional Off-Track Betting Corp., said of the marketing changes. The OTB is owned by counties in the region as well as the cities of Buffalo and Rochester, and the casino it owns in Batavia has proven increasingly successful over the years.

The three track-based casinos will also not be able to offer electronic table games, as other such facilities can in the state. “I don’t think it’s a great news day for us,” Kane said. Counties in the region had been pressing Albany to let Batavia become a full-blown, Las Vegas-style casino, complete with table games like poker as now allowed at the Seneca facilities. But that idea died Thursday with the Cuomo and Seneca deal that now bans the region from any further casinos.

Dennis Lang, chief executive officer of Buffalo Raceway, which runs the Hamburg Casino, called it a mixed day. He supports not having to compete with another casino coming into the area, but said it remains uncertain how the new marketing restrictions on his facility will hurt sales.

The dispute began during the administrations of former New York Gov. David A. Paterson and former Seneca President Robert Porter. The Senecas said New York broke the compact, in part, by letting the track-based casinos in their exclusivity zones market themselves as if they were full-blown casinos.

The fight intensified between Cuomo and Snyder. The governor at different points suggested he would help locate a casino near the tribe’s Niagara Falls casino if the Senecas did not break the stalemate while Snyder last week, in an interview with The Buffalo News, twice called Cuomo a “bully.”

On Thursday, the tone was decidedly friendly. Cuomo said the Seneca concerns raised about the state violating the compact were “legitimate,” while Snyder started off his remarks at the Conference Center Niagara Falls apologizing to Cuomo for the bully remark.

The governor, with a week to go in the scheduled 2013 legislative session, is trying to nail down the final details with lawmakers of a plan to permit up to seven casinos in the state. The initial round would be limited to upstate, which he defined as one of six regions. But over the past month, three of those regions, including Western New York on Thursday, were taken off that casino expansion list by deals he cut with Indian tribes involving revenue sharing payments, as well as land claim settlements involving two other tribes, in return for keeping new casino competition out of those areas.

“The referendum created the moment to then resolve these conflicts which had been festering for a long time,” Cuomo said of the casino expansion plan being used to help jump-start talks with the Seneca Nation and two other tribes.

“We’ve resolved all these long-standing disputes just by proposing the referendum,” he said in an interview, noting the deals with the three tribes have been worth about $1 billion in revenues to the state.

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