Saturday, July 14, 2012

Seneca Nation of Indians vs New York State. Gaming compact.

I just read a story in the Buffalo News and skimmed through the comments. It is pretty amazing how little people know about the issues that are effecting them directly. The story involves the Seneca Nation's Casino in Niagara Falls and the City of Niagara falling apart due to with held payments from the Seneca's. According to the story, the Seneca Nation currently owe around $58 Million to the City of Niagara over the past three years.

I'll preface the rest of this post by saying I am not a Lawyer or Politician, I know I don't have all the information, but clearly after reading some of the comments on the story; I know more about it than the people directly effected (and I live about 3 and a half hours away).

So in 2002, New York State and the Seneca Nation of Indians put together what they call a Gaming Compact that allowed the Seneca Nation to put up a few Las Vegas style casinos in New York State. In this Gaming Compact (found here: the Seneca Nations agreed to pay the state and local municipalities a portion of the take in. The compact also provided for exclusive rights to the Seneca Nation for large portions of Western New York State. This seemed to work well for everyone involved (money wise) for a few years.

In recent years New York State, like many other states; have approved what they called racinos that are basically race tracks with slot machines in them. Some of these racinos are in the Seneca Nations Exclusive zone. Because a deal could not be worked out and it appears the Seneca Nations grievances have been ignored (at least it looks that way) the Seneca Nation with held payments to New York State. The last number I have seen suggests the amount was around $300 Million, I would speculate that the total is now closer to $400 Million but do not hold me to that.

Since the problem with the Compact is NOT the local municipalities (mostly Niagara and Salamanca) and they are in a tough spot financially, the Seneca Nation offered to pay them their portion directly. The way the deal works, for local municipalities to get their money they have to go through the state so they can take their processing fees out of it. Of course New York State did not want this so they said they COULD NOT do this.

What is the result? Run down buildings, streets falling apart and layoffs. Is this the fault of the inability of New York State and the Seneca Nation to work out a deal? I would have to say no. It would've happened anyway. New York States failed financial policies are well known and only seem to be getting worse. However the payments surely where helping and could have continued helping.

The Gaming Compact provided New York State away to help themselves and to help the Seneca Nation. It was a true Win Win situation (financially speaking) for everyone.

I am not sure at what stage the conflict is now, but I heard something about arbitration not too long ago. The arbitration could be bad news for all parties from New York State not getting any money to the Seneca Nation not having any exclusive zone.

In my opinion the safest way...
  • Calculate how much the Seneca Nation lost because of the zone breach.
  • Do some math and take that out of the amount 'owed' to New York State.
  • A reasonably sized fine to the State for breaking the Compact out of the State's portion NOT the municipalities, paid to the Seneca Nation from the State of New York.
  • Change the Gaming Compact so that the Seneca Nation can and will pay municipalities directly.
  • The Seneca Nation to pay the remainder to effected parties directly.
  • Order the racinos in the zone to pay a portion of their gambling take ins to those they hurt the past few years (mostly Niagara and Salamanca areas). All be it a pretty small portion.
  • Further bar any more racinos/casinos in the Seneca Nations exclusive rights zone.
  • Ask that the municipalities set some of the payments back for use for emergency funding for natural or financial disasters.

Personally I don't like it, clearly New York State broke their contract with the Seneca Nation. But something like this would help everyone right away pretty quickly. Assuming everyone sticks to it, it would also provide for future financial security.

So it comes down to, who is the bad guy?  Who ever gave the racinos their permit inside the Exclusive zone. Also who disallowed payments directly to the municipalities? No one is completely in the right in this but from what I see New York State caused the most harm to those directly effected.

Some of the comments on the Buffalo News site are pretty outlandish from people who are effected by this situation.  I feel for them, but don't let anger and frustration cloud your judgement. 

No comments: