In January 2010, the Seneca Nation advised the New York Governor's office that the operation of certain gaming devices within Western New York violated the Nation's right of exclusivity under the compact and therefore jeopardized the State's ability to continue to receive the very substantial ‘State Contribution’ payments under the compact. The Nation invited a dialogue on the matter, but never heard back. For its part, in October this year the State of New York issued a 14-day ultimatum demanding payment it believes is owed under gaming compact rules.

The Paterson administration now says negotiations with the Seneca Nation have broken down and the state will take the issue to arbitration. Seneca officials say that they welcome the involvement of an impartial third party in the dispute. New York is claiming over US$200 million in withheld slot machine payments. State lawyers will ask the arbitration panel to find whether the Seneca Nation has materially breached its 2002 Class II Gaming Compact.

Seneca Nation Council Chairman Richard Nephew is quoted in Indian Country Today: “It is now clear that this matter is only resolvable through arbitration and the nation welcomes it. The state may feel as though it has reached an impasse with the Seneca Nation, but the nation has done everything according to the letter of the Gaming Compact to deliver its end of the bargain.” He added, “Let us be clear: The nation’s decision to withhold the exclusivity payments is based on the state allowing casino gaming machines within the nation’s exclusive jurisdiction; hence the term exclusivity payments.”

The stakes are high for both sides in the dispute. If the Senecas are declared to be in breach of their compact then hundreds of jobs could go at the three Senaca casinos in Niagara Falls, Salamanca and Buffalo, badly affecting the local economies. If New York loses its argument then the state would lose a valuable and much needed influx of funds. The arbitration panel will have to work hard to find the compromise by which both sides can walk away with dignity. (E-12.23.10)

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