BUFFALO, N.Y. — In 2002, the Seneca Nation and New York State signed a compact in which the Senecas agreed to share a percentage of slot machine revenue quarterly in exchange for regional gaming exclusivity.
However, the nation last paid the state in March 2017, arguing the agreement did not explicitly designate payments for the final seven years. After years of litigation, the stalemate is over.
"Rather than pursue continued legal action we believe it's in the best interest of the Seneca Nation to address those important concerns throughout negotiation of a compact that will provide clarity on our obligations and equally as important the obligations New York State has to the Seneca Nation in return," Seneca Nation President Matthew Pagels said.
The Senecas will pay money they have been keeping in escrow to New York State. While it's unclear exactly how much it will be, the state said it was at about $435 million around this time last year and a source believes it's at more than $500 million now.
State Senate Chair of the Subcommittee on Native American Affairs Tim Kennedy said the end of the dispute and agreement to begin negotiating a new compact within the next six months is a monumental achievement.
"Gov. [Kathy] Hochul and President Pagels deserve great credit for coming to the table, making sure that both sides aired their issues and concerns but most importantly we move forward putting hundreds of millions of dollars into the coffers of the state taxpayers where they rightfully belong," Kennedy said.
While the state will keep a majority of the funds, a portion will go to Buffalo, Niagara Falls and Salamanca, where the Seneca casinos are located. The state fronted the municipalities some of those funds several years ago, but Buffalo Mayor Byron Brown said he's still expecting more than $40 million for this year's budget.
"We will use it to further improve the operation and the efficiency of city government. We will use it to invest in quality of life improvements for residents of our city, citywide and we will allocate some of the money to go into the city's fund balance," Brown said.
The gaming landscape has changed significantly in the past two decades, including the establishment of non-tribal casinos, as well as more recently, the legalization of sports betting — all potential factors as the state and the nation hope to sign a new compact before the current one expires in December 2023.
"I hope the local revenue sharing goes up. We'll see," Brown said. "I certainly don't want to see any reduction in the local share that will come to Buffalo and the other host municipalities and I would say with gambling being expanded in New York State, it is only right that more money come to local governments to be able to reinvest in communities."
"The Seneca Nation said as part of the agreement it will secure $40 million in disputed fees and cost savings. Pagels said, in the next compact, the Nation will look to be recognized as the primary regulator of its gaming and ensure that proceeds meet the needs of its citizens first and foremost.