The five-year dispute between New York and the Seneca Nation over casino revenues came to an abrupt end over the weekend when the state froze the nation’s bank accounts. After she did that, The Seneca Nation paid the state $565 million. Almost immediately after they did so following years of legal challenges, Hochul announced that she wanted most of that money to be used to pay for the state’s $600 million share of a proposed $1.4 billion new Buffalo Bills stadium.
The hardball tactics had already spoiled the relationship between the Senecas and the first new governor in a decade, but the use of the funds added insult to injury according to the Seneca Nation. “In one breath, New York’s hostile and shameless greed was laid for the world to see,” Seneca Nation President Matthew Pagels said of the Bills stadium decision in a Wednesday video statement. He said that a stadium for the billionaire Bills owners the Pegula family – who had once tried dumping fracking wastewater in the Allegheny River to the detriment of downstream native land – “is being paid for on the backs of the Seneca Nation.”
What’s more, Seneca Nation leaders now contend that the state lied about how it targeted accounts, the freezing of which left Seneca Nation leaders without the ability to cash checks, complete payroll or pay for needed supplies for about three days. The Senecas in public statements have said they kept the $565 million in disputed compact cash in a secure account separate from the nation’s other funds. The state has maintained that the nation commingled the money, which led to unrelated accounts getting frozen and harming members when the state froze the accounts.
"This is another blatant lie from New York State – pure and simple,” Pagels said in a statement to City & State. Pagels said that a secure account had more than enough money to pay New York the disputed amount, and that the state knew this. Hochul spokesperson Hazel Crampton-Hays said the state wanted a standard escrow account, but the Senecas opted for a restricted account structure. “With a traditional escrow structure, there would have been no implications to any other funds, but moreover, there could have been no implications at all if the nation had simply made the payments they owed and promised to pay,” Crampton-Hayes said in a statement to City & State.
This is the latest in a long history of unrest between the state and the Senecas that had been no better under Hochul’s predecessor. Early in his tenure, former Gov. Andrew Cuomo set a negative tone by declining to meet personally with tribal leaders, a break from past governors who also tended to have rocky relationships with the Seneca Nation. His administration also butted heads with Seneca leaders on transit issues, which led to years of disrepair for a stretch of highway that runs through their territory. This is on top of the casino revenue dispute at issue with Hochul.
Under a roughly 20-year-old gaming compact between the nation and the state, the Senecas had agreed to pay the state 25% of the revenue it got from slot machines at reservation casinos. But when the compact came up for a seven-year extension in 2016, the Seneca Nation contended the revenue sharing portion of the agreement had expired, while the state said that it still needed to make those payments. What followed was five years of legal battles, and fairly consistent rulings by courts that the Senecas owed New York the disputed cash. But the nation continued to challenge the legality, and asserted that the state had not adequately held up its end of the original compact.
Fast forward to January 2022, and both sides seemed to have finally resolved the battle. Under an agreement to negotiate a new compact next year, Seneca Nation leaders voted to pay the $565 million the state said the nation owed. It set the stage for more friendly talks between New York and the legally recognized the native sovereign nation, a shift from the previous administration.
However, things fell apart when the Seneca Nation Council, which governs over a tribe of some 8,000 people, passed a resolution in February to pause the agreed upon payment until they heard from the National Indian Gaming Commission, which had spent the months prior investigating the legality of the state’s claim to revenue sharing. For the Seneca Nation, the decision to resolve the long dispute had been a difficult one that many members did not agree with. For the state, the Senecas had reneged on their promise and failed to transfer the cash by the deadline. "Governor Hochul has worked to resolve this issue amicably since the beginning of her administration and receive the funds the State and local governments are owed,” Crampton-Hays said in an email. “Time and again, the Nation failed to fulfill their court-ordered obligations.”
As Seneca leaders awaited the results of the federal review, representatives for the state asked that the nation pay their debt by March 9. The state then demanded one last time for the Seneca Nation to pay by March 16 under the original January agreement, or New York would move to seize the cash. “Rather than threatening aggressive action, the State should permit the federal agency responsible for overseeing Indian gaming issues the time it needs to complete its work,” Pagels said in a statement at the time. “Now is not the time for the State to revert to bullying and greed.”
On March 18 – after the state-issued ultimatum deadline had passed – Pagels announced that the nation had received a letter from the Indian Gaming Commission stating it had closed its investigation but it didn't take a position on the legality of the revenue sharing agreement. He said that leaders wanted time to review the letter before making their next move. “Our gaming business has been transformational for the 8,500 Senecas, and has vastly improved the quality of life on our territories,” Pagels said in a video posted to the nation’s website. “That’s why we fought so hard over the last five years, and why we’ll continue to fight to protect our rights against unfair policies, regulations and demands that are designed to limit our ability to compete and succeed.”
Just days later, on March 24, the state moved to freeze the Senecas’ bank accounts. And March 28, the nation agreed to pay.
The state did not view what had transpired the same way. “After the Nation once again failed to make payments under the terms of an amicable agreement, the State had to take action, and we are pleased to have finally secured these long-overdue funds for Western New York communities,” Crampton-Hays said in a statement.
What seems certain is that a new day has not dawned on the Seneca Nation and the state of New York as they begin negotiating a new gaming compact.