Seneca Tribe Vows to Stop Slot Machine Revenue Sharing in New York State Casino Spat

When the new fiscal year begins on April 1, New York’s state government will be faced with a potential shortfall of $110 million, after the Seneca Nation of Indians announced a prior revenue sharing payments plan would end.

Seneca Nation president Todd Gates released a statement on March 22 announcing the impending dissolution of annual revenue sharing contributions:

“The Seneca Nation has followed the terms of our gaming compact since 2002 and we will continue to do so until it expires in 2023. As written in the compact, the Nation provided a share of our revenue to the state through the end of last year.

Although the revenue share has ended, we remain committed to being good neighbors in the communities where we have gaming facilities.”

The following day, Gates held a news conference on the matter, where he elaborated on the tribe’s interpretation of the compact’s terms:

“Our obligation to the state has ended. Per the plain language of the compact, revenue share contribution exists for 14 years. This is not new. The language of the compact has not changed. We are following the language of the compact as we always have.”

The sudden shift in tribal policy appeared to take the statehouse in Albany by surprise.

Governor Andrew Cuomo’s administration issued a terse response, citing a memorandum of understanding (MOU) signed in 2013 while rejecting the tribe’s interpretation:

“Under the terms of the compact, as well as the 2013 MOU with the Seneca Nation, it’s clear this payment structure remains in place.

If the new leadership of the nation has questions, or a different interpretation of this, they haven’t shared them with us, but we’re willing to meet and discuss any issues.”

Based in the western half of New York, the Seneca Nation is a tribe of approximately 8,000 residents who occupy two primary reservations in Cattaraugus and Allegany counties.

Their dispute stems from unclear language buried within the 793-page tribal gaming compact forged by the Seneca Nation and the state of New York in 2002.

That agreement allowed the Seneca Nation exclusive rights to operate casino gaming enterprises within designated geographical boundaries, including all territory to the west of State Route 14.

The tribe operates three major casinos across the territory designated by the gaming compact: Seneca Niagara Casino in Niagara Falls; Seneca Allegany Casino in Salamanca; and Seneca Buffalo Creek Casino in downtown Buffalo.

In exchange for exclusivity rights, the Seneca Nation agreed to contribute a percentage of their gaming revenue to the state, using a sliding scale:

“The Nation agrees to contribute to the State a portion of the proceeds … in accordance with the sliding scale set forth below:

Years 1-4: 18% annually
Years 5-7: 22% semi-annually
Years 8-14: 25% quarterly.”

Speaking to the Buffalo News, an anonymous Seneca Nation representative cited this specific statute within the compact as the tribe’s justification for ceasing revenue sharing payments:

“This is nothing new. It’s what the compact says in black and white language. We’re now in the 15th year of that compact. This is the Nation following the language of the compact.”

In 2013 the state authorized an ambitious casino expansion plan, with three of four Las Vegas-style resort venues opening since then. One of those is Del Lago Casino, situated just a few miles to the east of State Route 14 – which marks the boundary for the Seneca Nation’s exclusivity agreement.

The tribe has pledged to continue revenue sharing with municipal governments while negotiations with the state continue.