Seneca Nation Agrees to Drop Legal Action Against New York State

by Jenny Tang - Thursday, January 13th, 2022 3:51

slots machines casino

The Seneca Nation has pulled out of its long-standing legal battle against the state of New York regarding the profit sharing of slots proceeds. The decision was made following an agreement to restart payments to the state and to negotiate a new gaming compact.

The current gaming compact signed back in 2002 saw the tribe granted exclusive rights to operate gaming venues in Buffalo, Niagara Falls, and Salamanca. The deal required that 25% of slot proceeds would be shared with the state with much of those payments to go to the casinos’ hosting cities.

The Seneca Nation claimed that the last of these payments was due in 2017 as any profit sharing deal was not included in the renewal period of the compact which began at that time. However an arbitration panel decided that the Seneca were liable for $225 million. Then in 2021, the state judged that the Seneca owed $470 million in back taxes.

The tribe then took the matter to a federal court while the Department of the Interior called for a federal investigation into the matter.

A Seneca spokesperson told local news reporters that the legal action was dropped with a view to strengthening the future operations of the Nation’s three existing Western New York Casinos.

The decision to pull out of the legal battle means that the Seneca will secure $40 million in disputed fees and cost savings over the life of the current compact. This is set to expire in December 2023.

The Nation will now resume quarterly payments to the state that will then go to the hosting cities.

Speaking of the agreement, Seneca Nation President Matthew Pagels said:

“Rather than pursue continued legal action, we believe we can now best address our concerns in a Compact with greater clarity on our obligations, and, as important, the obligations New York State has to the Nation in return. Furthermore, we want to see the momentum generated by our investments and operations continue to grow, and we look forward to building on our strong relationships with our neighbors in Niagara Falls, Salamanca and Buffalo. Now is the time to move forward.”

Governor Kathy Hochul added:

“I am pleased to have reached an agreement for the resumption of payments on terms that serve both the State and the Nation and that benefit Western New York communities, and I look forward to beginning discussions toward a new compact.”

Jenny Tang

Global iGaming Correspondent based in NYC.