Arbitration Panel Rules Senecas Must Continue Slot Payments

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NIAGARA FALLS, NY (WBEN) A three person arbitration panel issued a ruling against the Seneca Nation of Indians in the casino compact dispute with the state.

The three-person arbitration panel determined Tuesday the Senecas' slot revenue sharing payment obligation must continue beyond year 14 of its gaming compact.

Seneca Nation announced in March 2017 that they would stop paying revenues to New York State after what they believed was the expiration of the gaming compact signed in 2002. New York State received roughly $110 million per year as part of the compact.

The western New York tribe stopped sharing casino revenue with the state in 2017, leaving gaps in the budgets of Buffalo, Niagara Falls and Salamanca, where the casinos are located. The Seneca Nation said its revenue-sharing obligation under a 2002 compact had expired with the original compact after 14 years.

In a 2-1 decision released Tuesday, an arbitration panel found the requirement to share 25 percent of slot-machine revenues renewed when the compact as a whole was automatically renewed for an additional seven years.

The arbitrators ordered the Seneca Nation to make all past due payments and continue to pay in the future.

Seneca President Rickey Armstrong Sr. said the nation would review the decision. He did not say whether the Senecas would comply.

"We hope that they will," said Lt. Governor Kathy Hochul in an interview with WBEN. "This has been a very long process for... Buffalo, Niagara Falls, and Salamanca. They've been waiting a long time for what the Senecas had agreed to in the past, which is exclusivity... in return for sharing the proceeds with the State and the communities."

"We continue to believe, as anyone who has read the compact, that the nation's compact payment obligation was fulfilled," Armstrong said. He cited the dissenting arbitrator's finding that the decision "rewrites the compact in a way that harms the nation and provides an unjustified windfall to the state."

The Senecas shared more than $1 billion through the end of 2016, which the state then shared with the casino host cities to help defray infrastructure and other costs.

"It was clear to us that the nation had an obligation to continue payments — period," Gov. Andrew Cuomo's spokesman Rich Azzopardi said in a statement. "According to the compact, this arbitration process was prescribed to resolve conflicts and now that it's concluded, we ask that the nation cease any further delays, make the state and local communities whole, and resume payments."

Salamanca Mayor Michael Smith estimated his small city has lost about $9 million since the payments stopped.

"We feel very thankful for this result," Niagara Falls Mayor Paul Dyster said at a news conference. City leaders have turned to tax increases, layoffs and considered a new garbage collection fee to make up for the loss of more than $13 million a year to the city's $91 million budget.

The Senecas operate three casinos under the compact: the Seneca Niagara Casino & Hotel in Niagara Falls, the Seneca Allegany Casino in Salamanca and the Seneca Buffalo Creek Casino in Buffalo.

“Despite the panel finding that the Compact, as written, simply does not address the topic of revenue share beyond Year 14, a majority of the panel members determined that an obligation exists to continue revenue share payments to the State,” said Seneca Nation President Rickey Armstrong, Sr.   
“The Panel’s new provision rewrites the Compact in a way that harms the Nation and provides an unjustified windfall to the State,” according to dissenting Arbitration Panel member Kevin Washburn. 
“We continue to believe, as anyone who has read the Compact, that the Nation’s Compact payment obligation was fulfilled, and we believe we had an obligation to the Seneca people to defend the Compact as it was written and agreed upon,” President Armstrong continued. “It is the Seneca people who voted to permit our Nation to negotiate our Compact and, like all government leaders, we must act every day in the people’s best interest. We created our gaming enterprise so that we could invest in the services that our people need, want and deserve. To that end, our casino operations have been transformational in helping the Seneca Nation serve our residents, from our youngest generations to our elders. None of that changes with this arbitration opinion.”
Armstrong adds, "While we know we are right on the law, we also knew that making that argument to an arbitration panel gave no assurance of an opinion in our favor.  As is often the case, the Courts, and apparently arbitration panels, do not always decide cases on the law, even their law. We have prepared for this circumstance, and, now that the panel has issued its opinion, we will take the appropriate time to review and respond to the opinion, and move forward.”

 

John Kane, a Mohawk Indian and host of "Let's Talk Native" spoke with WBEN for analysis and said the argument during arbitration was whether the language of the compact really called for payments to continue past the 14 years that was detailed.