Seneca Nation to Stop Gambling Tax Payments to New York State
As has been written here many times in the past (as opposed to the future?), a group of hard-line Native American tribes have been one of the major reasons why online poker has yet to be legalized in California. Tribes are significant players in gambling in most states; they have a lot of clout. And now, the Seneca Nation is ruffling feathers in New York, not when it comes to online gambling, but rather in the brick-and-mortar gambling arena. According to a report in The Buffalo News, the Seneca Nation has decided that it isn’t going to fork over any more gaming taxes to the state.
The Seneca Nation inked a gaming compact with New York state in 2002 that gave it exclusive rights to gambling west of State Route 41 for twenty-one years. The tribe has three casinos in western New York: Seneca Niagara in Niagara Falls, Seneca Buffalo Creek in – you guessed it – Buffalo, and Seneca Allegany Resort & Casino in Allegany, which is near the Pennsylvania border.
In recent years, the government has approved gambling expansion beyond racinos and tribal casinos in New York, authorizing the construction of resort-style commercial casinos. Four commercial casino licenses have been issued since late 2015. Rivers Casino & Resort and Del Lago are up-and-running, Tioga Downs has been expanded from a racino to a commercial casino, and Montreign is scheduled to open in 2018.
This expansion, particularly the existence of Del Lago, seems to be what has ticked off the Seneca Nation. Del Lago is about 100 miles east of Buffalo, so it has likely drawn business away from Seneca Nation’s properties. It is only a handful of miles east of State Route 14, so the Senecas’ exclusivity west of that highway remains intact, but Del Lago clearly looms just outside of that territory, and that bothers the Seneca Nation. It’s like when an and older sister is bugging her younger brother in the back seat of the car, putting her finger a half-inch away from his face, taunting, “I’m not touching you! I’m not touching you!”
So while there is not any definite word that the Seneca Nation’s decision to stop payments to the state has to do with Del Lago or other casino expansion, the implication is that it is. And the thing is, it looks like it may be totally legal.
Since the gambling compact was agreed upon, the Seneca Nation has been paying a gaming tax to Albany. According to The Buffalo News, that payment rate was 18 percent in the first year and eventually climbed to 25 percent in years eight through fourteen. After year fourteen, though, there is nothing in the compact that says any more payments need to be made. So, the Seneca Nation has made the reasonable decision to keep its money.
In a statement to the media last week, Seneca President Todd Gates put it bluntly, “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. As written in the compact, the Nation provided a share of our revenue to the state through the end of last year.”
A Seneca representative told The Buffalo News, essentially, that he doesn’t know what is difficult to understand about the discontinuing of gaming payments, saying, “This is nothing new. It’s what the compact says in black and white language.”
“We’re now in the 15th year of that compact,” he added. “This is the Nation following the language of the compact.”
Of course, the Governor Andrew Cuomo’s office begs to differ. Spokesman Richard Azzopardi told The Buffalo News that according to both the original gaming compact and a memorandum of understanding signed in 2013, the payments are to continue past year fourteen.
“If the new leadership of the nation has questions, or a different interpretation of this, they haven’t shared them with us, but we’re willing to meet and discuss any issues,” the Azzopardi said.
The Seneca Nation has been paying around $110 million per year to the state government, so needless to say, the Governor’s office will work hard to keep that money flowing. All told, the Senecas have paid both the state and the casino localities almost $1.5 billion.
As for those localities, the Seneca Nation does not intend to lump them in with the state.
“Although the revenue share has ended, we remain committed to being good neighbors in the communities where we have gaming facilities and we look forward to working directly with them to continue the economic progress of Western New York,’’ Todd Gates said, implying that some sort of host fee solution would be worked out.