ALBANY – Hit by the pandemic, the amount of tax revenues the state is raising from the gambling sector has plummeted, as casinos, other betting halls and even the state’s own Lottery have seen business stumble amid shutdowns and people limiting their travels.
Then there is one line item deep within the newly proposed budget by Gov. Andrew M. Cuomo showing a huge boost in gambling revenues – all thanks to the Seneca Nation of Indians.
The governor is anticipating that the Seneca Nation will pay the state at least $450 million that Albany says it is owed since the tribe stopping making revenue-sharing payments in 2017 on proceeds from slot machines at its three casinos in Western New York.
And Cuomo is projecting the money to come before the end of the current state fiscal year, which is March 31.
But the dispute, which began in the spring of 2017, is still under appeal by the Seneca Nation in the federal courts and there is no clear indication when a final decision in the case might come.
The Seneca Nation’s current compact with New York State to run the Western New York casinos expires in two years.
On Wednesday, the tribe noted the dispute is still in the courts.
But, it added: “The Nation is and has been willing to discuss a resolution to litigation, as well as negotiating a new compact for 2023.”
“Protecting the long-term viability of the thousands of jobs our gaming facilities provide in Western New York and the significant economic investments the Nation has made in Niagara Falls, Buffalo and Salamanca over the past two decades is a priority for the Nation, and, we assume, for the State as well," the Senate Nation said in a written statement.
The governor is looking to balance the current year’s fiscal year, which has been battered by the impact of Covid-19 and economic shutdowns, with what his budget division estimates is about $450 million from the Seneca Nation in what Albany maintains is past-due financial obligations from the casinos.
Freeman Klopott, a Cuomo budget office spokesman, said the dollar amount is based on court filings and estimates by the state on the Seneca casinos’ performance during the pandemic.
“If these funds are not received, local governments that rely upon them will once again not receive these payments and, for its finances, the state has resources set aside to manage timing-related issues such as this," he added.
Local governments across Western New York have lost tens of millions of dollars in revenue sharing payments they get from the casinos. Under the terms of the original compact with the state, the tribe pays the state 25% of revenues from its slot machines at the tribal-owned gambling facilities in Buffalo, Niagara Falls and Salamanca. The state, in turn, shares part of that money with local governments in the region; some municipalities became especially reliant on the annual flow of money from the arrangement.
The Senecas stopped the payments in early 2017, when the tribe said it met the terms of the original 2002 compact that required revenue sharing payments in return for exclusive casino gambling rights in a huge area of Western New York. More than $1.4 billion was sent by the Senecas to the state in casino proceeds over the years.
The state’s position that the money was illegally halted by the Senecas was supported by two members of a three-member arbitration panel in 2019. The tribe then took the matter to federal court. Oral arguments were heard last fall by a federal appeals court.
The projection – or guesstimate – that the state will receive $450 million from the Seneca Nation in the next couple months is a rare bright spot in the Cuomo budget plan when it comes to tax receipts from the gambling industry. The Cuomo budget expects to receive $666 million less in tax revenues from four commercial casinos in upstate and racetrack-based video lottery terminal casinos scattered between Hamburg and Long Island.