Seneca Na­tion or­dered to pay $255 mil­lion to New York State

The Buffalo News - - CONTINUED FROM THE COVER - By Tom Pre­cious

AL­BANY – An ar­bi­tra­tion panel Wed­nes­day or­dered the Seneca Na­tion to pay the state $255 mil­lion in lapsed casino rev­enue-shar­ing pro­ceeds – though it re­mained un­cer­tain if the stale­mate is ac­tu­ally over.

The same two ar­bi­tra­tion panel mem­bers who in Jan­uary pre­lim­i­nar­ily sided with the state in the dis­pute Wed­nes­day said the tribe also needs to restart quar­terly pay­ments to New York as agreed to in the orig­i­nal com­pact that paved the way for the Senecas to open casi­nos in Ni­a­gara Falls, Buf­falo and Sala­manca.

The third ar­bi­tra­tion panel mem­ber, who was ap­pointed by the tribe, did not sign off on the order is­sued Wed­nes­day to lawyers for the two sides.

The tribe’s pre­cise tab owed the state – through Dec. 31, 2018 – was $255,877,747.44, ac­cord­ing to the ar­bi­tra­tion panel.

How­ever, sources re­cently said, there could be some ad­di­tional le­gal moves the Senecas are con­sid­er­ing that could keep the dis­pute from con­clu­sion.

Seneca Na­tion Pres­i­dent Rickey Armstrong Sr. said Wed­nes­day night that the na­tion is re­view­ing the de­ci­sion.

Ear­lier in the day, in a meet­ing with re­porters and edi­tors at The Buf­falo News, Gov. Andrew M. Cuomo seemed to sig­nal the ar­bi­tra­tion de­ci­sion might not end the mat­ter.

State of­fi­cials said the Senecas have put the dis­puted money into es­crow – as re­quired by the casino com­pact signed by the state and tribe – but that it is un­cer­tain the Seneca Na­tion will make the pay­ment.

“They had said they would honor the ar­bi­tra­tion de­ci­sion, and they signed a con­tract say­ing they would honor the ar­bi­tra­tion de­ci­sion. What does that mean? Ap­par­ently not much,” Cuomo said.

The Seneca Na­tion in 2017 stopped pay­ing the state 25 per­cent of the pro­ceeds it makes off slot ma­chines at the three casi­nos. Of­fi­cials with the tribe said the com­pact’s terms did not specif­i­cally state such pro­ceeds had to be paid af­ter the 14th year of the orig­i­nal 2002 com­pact deal. That com­pact in­cluded the rev­enue shar­ing in re­turn for an ex­clu­siv­ity deal for casino gam­bling in a large re­gion of Western New York.

Two of the ar­bi­tra­tors – in­clud­ing one ap­pointed to the panel by the state – said in Jan­uary the tribe was wrong in its in­ter­pre­ta­tion of the com­pact.

The fi­nal de­ci­sion is­sued Wed­nes­day put a dol­lar amount owed to the state by the tribe.

The state shares 25 per­cent of what it gets from the Seneca Na­tion with host com­mu­ni­ties – which in­cludes the three cities that are home to the casi­nos, as well as some other lo­cal en­ti­ties, in­clud­ing school dis­tricts.

Some, like Ni­a­gara Falls, came to heav­ily rely on the rev­enue-shar­ing pay­ments to bal­ance its books, and of­fi­cials in Buf­falo are hop­ing to use a re­sump­tion of the Seneca pay­ments to help fi­nance raises for elected of­fi­cials.

The com­pact says that dis­putes be­tween the state and tribe – if not re­solved through di­rect talks – will be han­dled by an ar­bi­tra­tion panel giv­ing bind­ing de­ci­sions. The com­pact in­cludes lan­guage that per­mits the state to sue the Seneca Na­tion in fed­eral court in Buf­falo if the tribe should not abide by the de­ci­sion of an ar­bi­tra­tion award.

The only thing the state and Seneca Na­tion ap­peared to defini­tively agree on in the dis­pute: the amount of money at stake.

The $255 mil­lion in back pay­ments cov­ers the pe­riod from Jan. 1, 2017, through Dec. 31, 2018. An ad­di­tional quar­terly pay­ment cov­er­ing the first three months of this year is due soon.

The ar­bi­tra­tion panel’s work was not free: it or­dered the two sides to evenly split a pay­ment of $338,000 in com­pen­sa­tion and ex­penses.

The de­ci­sion was sent from the Amer­i­can Ar­bi­tra­tion As­so­ci­a­tion to a pri­vate lawyer in Man­hat­tan rep­re­sent­ing the state and a lawyer for the Seneca Na­tion.

In Jan­uary, the Seneca Na­tion was sharply crit­i­cal of the ini­tial find­ing in the state’s fa­vor, and stopped short of say­ing it would im­me­di­ately pay the state when a fi­nal order, which came Wed­nes­day, was is­sued.

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