Seneca Nation Wants NY Slot Revenue Share Lowered
The Seneca Nation recently told New York regulators that the 25% slot machine revenue share they provide the state is now too high.
To be able to offer gambling services in the United States, an operator has to be approved by a regulator in a state where the service is legalized. In order to participate, certain criteria must be reached, including a fee paid to get started, as well as reoccurring fees, and of course, tax or revenue share payments. In New York, the Seneca Nation of Indians currently pays 25% of its slot machine earnings to the state. The tribe says this amount is too high now as the three casinos it operates are no longer able to retain the same economic benefits as when the percentage first started.
Percentage is Too High
This week, Seneca President Matthew Pagels discussed the expansion of casinos in New York as well as the Northeast in general. He says the market is now saturated and because of this fact, the casinos operated by the Seneca are not earning as much money as before. The 25% payments are just unrealistic at this point.
Pagels said that the gaming landscape is drastically different than it was before and the 25% is just not a fair assessment. The tribe is now asking the state to submit to the Department of Interior. The submission being asked of by the Tribe relates to $435 million that New York is asking for from the tribes, saying it is what they are owed.
The Seneca Nation and the state have been working together since 2002. A 14-year gaming compact for Class II options was reached and it required the tribe to provide 25% of its slot earnings to the state. the pact included a renewal clause which was started. The compact now runs through 2023.
The tribe is contesting the compact and the fact that they say the extension does not say the 25% slot payment is required. The tribe stopped sending money to the stat back in early 2017. The compact has been in legal battles ever since and the tribe has been putting the money into an escrow account. An arbitration panel got involved in the matter and ruled that it was not common sense for the tribe to say that the extension did not include the revenue sharing agreement.
What Happens Now?
Back in February, a federal appeal upheld the original ruling. In April, the tribe filed a motion seeking relief from the recent ruling. They say they owe the $435 million but state that a letter they were sent by the United States Department of Interior shows why the relief is justified.
An official with the DOI’s Bureau of Indian Affairs said that the office has concerns about the revenue sharing extension from 2015-2021. They did not conduct an analysis of the extension and apparently feel that they should have before the payments continued.
The tribe is now hoping that the Department of Interior will intervene on their behalf. They want to see a more favorable share rate provided and a reduction in the judgment of which they owe hundreds of millions of dollars.
There is a new secretary in the Department of the Interior that may decide to help. Deb Haaland has taken on the appointment and she is a member of the New Mexico tribe, the Laguna Pueblo. With the appointment, she is the first Native American to be named in a presidential cabinet.
The tribe is hopeful that the department as well as Haaland will help to start negotiations for a new compact that will better serve its members and lower the amount they must pay to New York State.