NIGC Reviewing Seneca Casino Payment to New York

The National Indian Gaming Commission

The National Indian Gaming Commission is currently reviewing if a large payment made by the Seneca Nation to the state of New York is in violation of the Indian Gaming Regulatory Act.

In the United States, federally recognized Native American tribes are allowed to offer casino gambling services on reservation lands once compacts are made with the state in which the lands are located. Several tribes offer casino gaming across the nation, relying on funds generated to provide a strong economy for tribal members. In New York, the Seneca Nation offers casino gaming, and the tribe recently became involved in an investigation regarding a $470 million judgement against the tribe by the state. Supposedly, the tribe owes $470 million to the state. however, the National Indian Gaming Commission (NIGC) believes that judgement is in violation of the Indian Gaming Regulatory Act (IGRA).

Long Legal Battle

The NIGC is now involved in the long legal battle between New York State and the Seneca Tribe. Back in February, a federal appeals court upheld a ruling for the state, saying that the tribe is responsible for paying 25% of its revenues from its three operating casinos via the Class III gaming compact.

Way back in 2002, the state and Seneca Nation signed a 14-year based agreement contract that had an automatic extension of seven years. It was only the base agreement though, that had the revenue-sharing portion within the text. Leaders of the tribe say that the extension of the compact does not cover any additional payments. However, the state is not in agreement.

The two have battled it out in court for quite some time, and once the Seneca Nation lost its arbitration, the tribe filed a lawsuit in district court. The leaders stated at the time that the arbitration panel did not follow the IGRA when the decision against the tribe was made.

Once the appellate court decision was made, the United States Department of the Interior told tribal leaders that an economic assessment must be made regarding the seven-year extension. The department pointed out that this is a requirement of the IGRA. This decision led the Department to ask a district court judge to set aside his original ruling.

The Commission reportedly has an issue with the amount of money that the tribe has given to the state, particularly due to the fact that the state has not provided anything in return. The Commission says that if the state wants a portion of the gaming revenues, then it needs to provide the tribe with something in exchange. A revenue share payment to a state that does not offer something in return is not in line with the IGRA.

The Seneca Nation has now asked for a stay on the payment the tribe is supposed to pay the state while the NIGC decides on how to move forward.

New York Wants to be Paid

Lawyers representing New York State are skeptical of the recent response filed and claim the tribe is trying to create show a financial hardship to stop making its payments. Gregory Starner, an attorney with White & Case LLP stated that arbitrators and the courts have ruled on the issue and the Seneca Nation did not decide to go to the Supreme Court with the matter.

Starner stated that the letter by the NIGC does not present any extraordinary circumstances or extreme hardship to prove the Court’s final judgement should be vacated. The attorney stated further that it is past time that the Nation honor its obligations based on the Department of Interior approved Compact and Judgement.

It will be interesting to see how this case progresses. Will New York State offer the tribe something in return to be able to continue its payments? Is the judgment for the large payment by the tribe in violation of the IGRA?

Associate Writer: Geoff enjoys both live and online poker as well as casino games, and is particularly knowledgeable about the legal landscape of online gambling.