This is a problem that needs to be fixed, now.
Because of what must surely be an oversight – a careless oversight – in extending the compact that allowed Seneca casinos in Erie, Niagara and Cattaraugus counties, the Seneca Nation of Indians has announced that it is done making payments to New York State. After paying about $100 million a year, it says a $30 million transfer at the end of the month will be the last one.
The Senecas based the move on the wording – or, rather, the lack of it – in at least one part of the document. But simply as a matter of good faith, the Senecas need to negotiate with the state to live up to the spirit of the agreement by which they have been allowed to take billions of dollars out of the community, and with little of the economic development that was promised for the host cities.
The problem is that the 21-year agreement that allowed the Senecas to operate three casinos in Western New York spells out required payments to the state only for the pact’s first 14 years – which now have ended. After that, the agreement says nothing about the years through 2023. The Senecas’ position is that they owe nothing.
In fairness, negotiating parties are under no formal obligation to warn the other side that they have made a mistake. And that is what then-Gov. George E. Pataki did in approving the 2002 compact, along with the Western New York legislative delegation and, most recently, Gov. Andrew M. Cuomo, who renegotiated a deal in 2013 to resolve a conflict over competing casinos.
The question now is one of ethics and, perhaps, of legality, since the state would surely argue in court that the intent of the compact was clear. It shouldn’t have to come to that.
Instead, the state and Senecas should honor a deal that has been good for both parties and negotiate the requirements of the next six years. It is encouraging that Seneca President Todd Gates has spoken with Cuomo and expressed a “willingness to talk.” Talking is one thing, though. What is needed is mutually beneficial agreement.
The Senecas and the state have had a fraught relationship in recent years. The problem was the presence of slot machines at race tracks, which the Senecas said violated the compact’s zone of exclusivity, and the state effort to build seven privately run casinos, threatening to diminish the number of gamblers who would travel to the three Seneca halls.
The conflict prompted a monthslong standoff in which the Senecas refused to make the negotiated payments to the state, which the state, then, could not pass on to Niagara Falls, Buffalo and Salamanca. It created a tremendous financial problem, especially for the two smaller cities.
No one forks over tens of millions of dollars willingly, but the fact is that the Senecas have been given a goose that will lay golden eggs for decades to come, and they got it through an artifice that designated city lands islands of Seneca sovereignty. That wasn’t an out-and-out gift, since the state and municipalities benefited greatly, but the agreement has transferred unimaginable wealth to the Senecas. We hope they see an honorable reason to live up to the spirit of the agreement that made that possible.
In the meantime, the Senecas have also said they would be willing to work out deals directly with Niagara Falls, Salamanca and Buffalo for government services for their casinos and to share a portion of revenue with the host municipalities. That, too, is a good sign, though the amounts should be for no less than those cities already receive.
Meanwhile, someone in state government should be assigned the task of reviewing other important agreements to be sure that no more contractual hand grenades are about to go off. And the state and Senecas should begin discussing this matter immediately.