Seneca Nation Ordered to Pay NY State $255M in Casino Revenue Dispute

  • US federal judge has upheld April arbitration panel ruling
  • Seneca Nation ordered to adhere to 2002 compact terms until 2023
  • $255 million in casino revenue owed covers only withheld payments in 2017-2018
  • New compact negotiations to factor in tribe's right to offer sports betting at its casinos
Seneca Niagara Resort & Casino
A US federal judge has upheld an April panel arbitration ruling ordering New York’s Seneca Nation to hand over $255 million in casino-revenue-sharing funds withheld since 2017. [Image: SenecaCasinos.com]

US federal court issues binding order

New York State’s Seneca Nation has been ordered by a United States federal court to send $255 million to the state in a lengthy battle over withheld tribal casino payments.

tribal nation to turn over funds to the state that had been withheld since early 2017

On Friday, November 8, a Western District of New York judge upheld a January 2019 arbitration ruling instructing the tribal nation to turn over funds to the state that had been withheld since early 2017.

The Seneca Nation entered into a revenue-sharing compact in 2002 that stretched through 2023. However, detailed plans for distributing the 25% share owed to New York State ended in 2016. In early 2017, the tribal nation declared that since no specific post-2016 revenue plan had been signed, it would cease making payments.

The revenue quickly added up. Under the terms of the compact, the Seneca Nation operates three casinos in western New York, namely in Buffalo, Niagara Falls, and Salamanca. The $255 million covers revenue accumulated only to the end of 2018. New York news outlets reported that another $100 million in withheld 2019 revenue-sharing payments has already accrued.

Disputes over gambling expansion

The long-running battle between the Seneca Nation and the New York State dates back to 2012, when the administration of Governor Andrew Cuomo began serious consideration of gambling expansion plans in the state. These included several non-tribal casinos spread around the state, which the Senecas viewed as a threat to regional exclusivity.

The dispute also touched on online gambling and even stretched into non-gambling matters. The tribal nation and the Cuomo administration reached a partial agreement in 2013, under which compact payments continued. However, the uneasy truce lasted until the 2017 payment shutdown and the ensuing battle over the compact’s terms.

previous compact terms remain in effect until new terms are agreed to by both parties

In April, the arbitration panel ruled — and the federal judge later confirmed — that the previous compact terms remain in effect until new terms are agreed to by both parties. The Senecas currently send about $110 million per year to the state.

“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,” said Rich Azzopardi, a Cuomo administration advisor, following the ruling. “It is our hope that they end this charade, stop using the courts to delay, and pay what they owe.”

Senecas also claim sports betting rights

Any new compact negotiations between the Senecas and the state will also factor in the tribe’s claim to the right to offer sports betting at its casinos. In July, the Seneca Nation said this right is “clearly outlined” in the compact, adding that “discussions with New York State officials to date have been cooperative.”

Sports betting is the next stage of New York’s broader gambling expansion plans. However, the state has yet to approve online and mobile sports wagering, meaning only in-person wagering is likely to be offered soon.