Arbitrators: Seneca Nation Wrong To Stop Sharing Casino Cash

BUFFALO, N.Y. (AP) — An arbitration panel has sided with New York state in its bid to continue collecting more than $100 million a year from the Seneca Indian Nation's three casinos.

The western New York tribe stopped sharing casino revenue with the state in 2017, leaving gaps in the budgets of Buffalo, Niagara Falls and Salamanca, where the casinos are located. The Seneca Nation said its revenue-sharing obligation under a 2002 compact had expired with the original compact after 14 years.

In a 2-1 decision released Tuesday, an arbitration panel found the requirement to share 25 percent of slot-machine revenues renewed when the compact as a whole was automatically renewed for an additional seven years.

The arbitrators ordered the Seneca Nation to make all past due payments and continue to pay in the future.

Seneca President Rickey Armstrong Sr. said the nation would review the decision. He did not say whether the Senecas would comply.

"We continue to believe, as anyone who has read the compact, that the nation's compact payment obligation was fulfilled," Armstrong said. He cited the dissenting arbitrator's finding that the decision "rewrites the compact in a way that harms the nation and provides an unjustified windfall to the state."

The Senecas shared more than $1 billion through the end of 2016, which the state then shared with the casino host cities to help defray infrastructure and other costs.

"It was clear to us that the nation had an obligation to continue payments — period," Gov. Andrew Cuomo's spokesman Rich Azzopardi said in a statement. "According to the compact, this arbitration process was prescribed to resolve conflicts and now that it's concluded, we ask that the nation cease any further delays, make the state and local communities whole, and resume payments."

Salamanca Mayor Michael Smith estimated his small city has lost about $9 million since the payments stopped.

"We feel very thankful for this result," Niagara Falls Mayor Paul Dyster said at a news conference. City leaders have turned to tax increases, layoffs and considered a new garbage collection fee to make up for the loss of more than $13 million a year to the city's $91 million budget.

The Senecas operate three casinos under the compact: the Seneca Niagara Casino & Hotel in Niagara Falls, the Seneca Allegany Casino in Salamanca and the Seneca Buffalo Creek Casino in Buffalo.