Seneca Nation Prepares to Halt Payments to state of New York

After 14 years of payments to the state of New York, the Seneca Nation of Indians says that it has made the final payments on a deal that expired over the past year. The Seneca Nation will stop payments on the deal starting April 1. The decision to stop the payments, which brings in $110 million to Albany annually, has been met with some controversy.

The Details of the Original Agreement

The original deal between the state and the Senecas was signed in 2002 and states that they are required to submit a portion of slot machine revenue to the state, but these payments can be halted after 14 years. It is estimated that they have paid $1.5 billion over this time frame. Currently, the Seneca Nation hosts casinos in Buffalo, Niagara Falls and Salamanca.

The announcement of the decision to stop payment came as a shock to Gov. Andrew Cuomo, who reached an agreement in 2013 that states payments to the state will resume and in turn the Senecas will receive exclusive rights to gaming in western New York until the year 2023. “The Seneca Nation has followed the terms of our gaming compact since 2002 and we will continue to do so until it expires in 2023,” Seneca Nation President Todd Gates said in a statement. “As written in the compact, the Nation provided a share of our revenue to the state through the end of last year.”

Looking Towards the Future

Gates went on to say that despite ending their payments, that the Seneca Nation is committed to being a good neighbor in the communities in which they operate and hope that through their success they can help the economy of Western New York. Although the Seneca Nation will stop payments on the current deal, Gates did not rule out a future arrangement with localities regarding revenue sharing payments.

Gov. Andrew Cuomo has fought the Seneca Tribe over revenue payments in the past as well. In 2013 the Senecas claimed that New York had breached the original conract’s term when it allowed other forms of gambling in Western New York. At the time Cuomo threatened to give Niagara Falls the right to a commercial casino if payment was not resumed. Eventually $349.7 million was paid to the state and localities, as Cuomo made various settlements with Indian tribes that year in lieu of a decision to legalize seven new commercial casinos in New York.

The Future for Financials

The Seneca Nation did not provide any indication of the timing of the decision to notify officials, but for lawmakers and politicians it comes as a surprise. That state is currently working to finalize the budget for the fiscal year, which conveniently begins on April 1. There is some speculation that the Senecas decision to stop payment is related to growing state-sanctioned gaming facilities in upstate New York that may be cutting in on Seneca business. As of now there is no evidence that would suggest the Seneca Nation’s business has been affected in any way.

Niagra Falls receives more than $20 million annually from its gaming facilities and is expected to be the most affected by the decision of the Senecas to stop making payments. The money received from casinos is used for a number of funding gaps in the city’s finances each year and its uses are constantly debated amongst residents and politicians.