New York: Federal review calls into question legality of Seneca casino payments

The Senecas filed a motion last week with the U.S. District Court in Buffalo to halt enforcement of a judgment that the tribe should make the payments that have accumulated since the Senecas halted annual casino revenue sharing with the state in 2016.

The court request by the Senecas comes after two key letters were written by federal officials last week raising questions about whether the state should be able to continue getting casino revenue sharing payments from the Senecas.

Bryan Newland, assistant secretary of the U.S. Department of Interior for Indian Affairs, on Sept. 15 wrote to the National Indian Gaming Commission expressing “serious concerns” over a key dispute between the state and Senecas.

The commission is a federal office that regulates Indian casinos and monitors compliance with federal Indian gaming laws.

The Interior Department and the commission are concerned that the automatic, seven-year renewal of the casino compact between the state and Senecas – commencing in 2017 – was never reviewed by federal regulators to ensure compliance with laws such as the U.S. Indian Gaming Regulatory Act, and that the tribe is guaranteed to be the “primary” beneficiary of its casino operations.

In a separate letter last week to Seneca Nation President Matthew Pagels, Thomas Cunningham, the chief compliance officer at the commission, said his agency and Interior believe the casino revenue payments to the state “may violate” federal law that the Senecas “maintain the sole proprietary interest in its gaming operation.”

The official said the issue is now before the agency “for further investigation and potential corrective action.”
The Interior and commission correspondence are a major legal development in the long-running dispute between the Senecas and the state. Local governments, from Salamanca to Niagara Falls, have been caught in the wrangling because they, too, have been beneficiaries of a portion of the casino revenue sharing payments to the state that totaled more than $1 billion until the Senecas cut off the money flow in 2017.

The Hochul administration, which inherited the battle that began during the former Cuomo administration, on Friday evening said it is "past time for the Nation to honor its obligations under the compact and the judgment.''

"The Nation has exhausted all of its appeals, the judgment is final, and the Nation’s efforts to manufacture an extrajudicial avenue for delay should not be used to circumvent the judgment or avoid its clear obligations to the state and the communities that will benefit from the Nation making their revenue sharing payment,'' a Hochul spokesman said in a statement.

By Tom Precious