The gaming compact between the Seneca Nation of Indians and the state of New York is set to expire in just three months, meaning time is running out for both sides to reach a new deal to allow the sovereign nation to continue operating Class III casinos in the western part of the state.
Time is of the essence because it takes more than just the Hochul Administration and the sovereign nation to reach a deal. The New York State Legislature must approve any deal. Then, the U.S. Department of the Interior must review the agreement, and officials have 45 days to review the compact.
So, just based on those events, a new compact would seemingly need to be reached within the next few weeks. However, sources say lawmakers will not likely be recalled to Albany soon to consider approving a new compact. Messages to both a Seneca Nation representative and Gov. Kathy Hochul’s office were not returned to NYCasinos.com, your source for online New York casinos.
Senecas Seek ‘Fair Value’ In New Deal
Earlier this year, there was optimism. An agreement in principle between the Hochul Administration and the Seneca Nation had been reached just before the New York Legislature concluded its annual session in June. However, that deal fell apart after some western New York lawmakers objected to the state granting a fourth casino to the Seneca that would be located in Rochester.
Talks have stalled since then. Last month, current Seneca President Rickey Armstrong Jr. issued a video statement in which he described a proposal submitted by the state just days before as “an insult” to the tribe. The major issue that needs to be resolved, he said, was a fair value for the tribe having gaming exclusivity in western New York.
“We believe that there is a benefit and a value to exclusivity for our gaming operations, but that value must be reasonably reflected in any agreement,” he said. “With the monumental changes that have taken place in New York’s gaming landscape since our current compact was signed, it is beyond unreasonable to expect that the nation would pay anything that exceeds the true value of what we are actually receiving in return.”
Seneca leaders say their casinos in Buffalo, Niagara Falls and Salamanca employ nearly 5,600 workers and generate an economic impact of $1.1 billion to the region.
Hochul No Longer Recused
Another matter that had complicated the talks was Hochul needing to recuse herself from the negotiations because her husband was an executive for Delaware North, a Buffalo-based gaming and hospitality company. That company owns Finger Lakes Gaming & Racetrack, a thoroughbred track and video lottery racino in Farmington. Finger Lakes is about 70 miles east of Buffalo.
Hochul’s husband left Delaware North on Aug. 15, and on that day, lawyers for the governor told her the recusals were no longer needed since she no longer had a conflicting interest. That means she can now directly participate in the talks with tribal leaders. Last week, her office issued a statement to New York media outlets saying her staff was working with tribal leaders on a fair deal for all sides.
State Won Lawsuit Over Current Compact
It has been a contentious relationship between the two sides for several years. Questions over whether the Seneca Nation needed to pay a portion of its gaming revenue to the state for the final seven years of the 21-year deal led to arbitration and then a lawsuit in federal court.
The state prevailed. However, concerns from federal regulators kept the tribal nation from paying until Gov. Kathy Hochul’s office sought to freeze the Seneca’s bank accounts. In late March 2022, tribal leaders finally relented and gave the state more than $560 million. At that time, then-Seneca President Matthew Pagels made it clear his nation wanted “fairness” in the next gaming compact with a state he described as wanting to be a partner, a regulator and a competitor.
Since signing the first compact in 2002, New York state has legalized commercial casino gaming. Four casinos are open in upstate New York, and the closest to the Seneca Nation’s operations is del Lago Resort and Casino, located between Rochester and Syracuse.
What Happens If No Deal Is Reached?
The gaming compact is set to expire on Dec. 9, but what happens if a new compact isn’t squared away by then remains to be seen. The Indian Gaming Regulatory Act, the 35-year-old federal law that established tribal gaming across the U.S., says that a compact must be in place for Class III gaming, which covers both Las Vegas-style slot machines and live-dealer table games, to occur.
However, the same law also allows tribes to pursue legal action in a U.S. district court if it contends the state has failed to negotiate or do so in good faith. According to IGRA, if a federal judge finds the state has not negotiated in good faith, then the judge can order both sides to reach an agreement within 60 days. If no deal is reached, a court-appointed mediator could choose between proposals submitted by both sides.
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