Seneca Nation Owes NY State $255M in Casino Revenue Payments

A federal court ruled in favor of New York against the Seneca Nation of Indians last week, saying that the tribe must pay the state at least $255 million in previously withheld casino revenue payments.

The court upheld a claim determined earlier this year by an arbitration panel that the Seneca, who stopped making payments to New York in 2017, must begin rectifying their debts to the tune of around $100 million per year.

The dispute hinged on the terms of a tribal compact signed in 2002 in which the Seneca were given exclusivity to offer gambling services to western New York. In return the tribe was to send the state 25% of all revenue generated from slot machines and video lottery machines.

The Seneca announced in March 2017 that they would stop paying the state as they believed that obligation was no longer in effect after 14 years. The state argued that the compact was supposed to automatically renew after that period for another seven years.

The $255 million figure was determined by the arbitration panel, which consisted of three members that ruled 2-1 in favor of New York.

It’s not known whether the tribe will appeal the decision by the court, but Seneca Nation of Indians President Rickey Armstrong, Sr., said in a statement that they are reviewing the matter.

“We understood the reality that the arbitration and court proceedings may not ultimately uphold the language of the Compact as written," Armstrong said. "Yet, it is our obligation to defend our agreements, so they are not compromised for the benefit of others. We will take the time to review today’s decision and determine how the Nation will proceed."

Rich Azzopardi, senior advisor to Governor Andrew Cuomo, said in a statement that the court "confirmed what we’ve said all along.

"The Seneca Nation needs to fulfill their obligations, make their neighbors and the state whole, and pay what they owe in exchange for their exclusive gaming rights," Azzopardi said. "It is our hope that they end this charade, stop using the courts to delay, and pay what they owe."

Seneca Sports Betting Future Still In Question

The Seneca Nation operates three major casinos in western New York: The Seneca Buffalo Creek Casino in Buffalo, the Seneca Niagara Casino & Hotel in Niagara Falls and the Seneca Allegany Casino in Salamanca.

The dispute over the compact might help explain why the Seneca have lagged behind fellow New York tribes the Mohawk and Oneida in offering sports betting.

The Seneca have yet to establish partnerships with a sportsbook service provider while the Mohawk partnered with The Stars Group and the Oneida partnered with Caesar’s Entertainment.

As a result, the Oneida’s Turning Stone Resort Casino in Verona and Point Place Casino in Bridgeport began taking sports bets in August. The Akwensasne Mohawk Casino Resort’s sports lounge is under construction, but is scheduled to open soon.

Meanwhile, according to Spectrum News in Western New York, the Seneca have claimed that they are "making progress" with plans to launch sports betting but are hesitant to place a strict timetable on when customers can expect it.

How, or if, the latest court decision will affect that sports betting timetable remains to be seen.

Times are profitable on a larger scale for tribal casinos in the United States, as their revenue increased by 4.1% in 2018. Having to pay back the revenue shares owed to New York will be a setback for the Seneca, but it would seem the sooner the tribe can begin offering sports betting the better.