End to a long-running battle

The Seneca Nation of Indians has come to a settlement agreement in New York over a long-running battle regarding its casino revenue contributions to the state.

As part of the agreement, announced by the tribe on Wednesday, the Seneca Nation will pay almost $500m worth of revenue share that it has held back since the beginning of the dispute back in the early months of 2017. The funds have been in escrow ever since.

the tribe has requested a new state gaming compact

The tribe has also agreed to resume the revenue share payments each quarter as part of the settlement agreement. However, in return, the tribe has requested a new state gaming compact that would give it more control over the operations of its casinos.

The group’s current compact is set to expire in December 2023, with officials to discuss the components of a new compact over the next couple of months. ?

The contentious points

The current gaming compact between the Seneca Nation and New York requires the tribe to contribute 25% of revenue from slot machines and video lottery machines. This revenue comes from the tribe’s casinos in Salamanca, Niagara Falls, and Buffalo and equates to approximately $100m each year.

While the state receives this money, a portion is given to the host city of each casino. The tribe signed the compact in 2002, giving it the exclusive rights to operate casinos in a 14-county section of western New York in return for the 25% revenue share.

Since the 2002 compact came into effect, Seneca has contributed revenue payments of $1.4bn to the state and invested over $1bn in casino development. Its three casinos employ approximately 3,000 people.

The basis of the long-running disagreement between the Senecas and the state revolves around this compact. The tribe believed that it no longer had to make the payments following the expiration of the agreement at the end of 2016. The state had a different interpretation, believing that the revenue share payments should continue.

In the ensuing legal battle, arbitration panels and various courts generally supported the state government’s side.

Working towards a new gaming compact

The tribe believes that a give-and-take approach is now better than pursuing further legal action. Seneca Nation leaders have estimated that this strategy will save the group about $40m in legal expenses, dispute fees, and other similar costs.

the tribe is hoping for more clarity on the obligations of both the tribe and the state

Through a new compact, the tribe is hoping for more clarity on the obligations of both the tribe and the state in their relationship. Seneca Nation President Matthew Pagels said that the tribe wants “to see the momentum generated by our investments and operations continue to grow.” He also expressed a desire to build upon the existing “strong relationships” with the cities hosting its casinos.

Shortly after the announcement from the tribe on Wednesday, New York Governor Kathy Hochul released her own statement acknowledging the ending of the payments dispute. Hochul said she is pleased with the resolution and looks “forward to beginning discussions toward a new compact.”