Seneca Nation Gives $564M to New York, Pagels Calls for ‘Fairness’ in Next Compact

Posted on: March 30, 2022, 08:33h. 

Last updated on: March 30, 2022, 11:07h.

More than two months after it appeared that the Seneca Nation of Indians had settled its long-running legal dispute with New York officials, the sovereign nation finally paid the state $564 million earlier this week. However, as Seneca Nation President Matthew Pagels made clear in a video statement Tuesday, the relationship between the two entities is anything but copacetic right now.

Seneca Nation of Indians President Matthew Pagels gives a statement Tuesday announcing the release of more than $540 million to the state of New York to settle an ongoing dispute between the two parties over their gaming compact. Pagels criticized the state for its actions, which he said forced the nation’s hand. (Image: Seneca Media & Communications Center)

Pagels said the tribe only released the funds from its escrow account after the state moved to freeze tribal accounts. That move, which the president described as “invasive and malicious,” as well as “economic coercion,” not only affected the Seneca government, but tribal families and individuals, he said.

The state may think it’s appropriate to force an elder to go without diabetes medication or a family already dealing with the financial impacts of the pandemic to go without a paycheck, our nation will not let that happen,” Pagels said. “We will not let New York State strangle Senecas and the people of Western New York.”

The payment ends what was a disagreement between the sides over the interpretation of the gaming compact that allows the tribe to operate three Class III casinos in western New York. But now, as the sides must get together to negotiate a new compact – the existing one ends next year – the relationship may be even more contentious than before.

In 2002, the Seneca Nation and New York established a gaming compact that allowed the tribe to operate three casinos in western New York, including in Buffalo. In return for the right to offer casino gaming, the tribe agreed to share revenue. The payment scale increased throughout the first 14 years, with the payments reaching 25 percent by the end of that term.

Dispute Over Compact

After making payments to the state for the first 14 years of the compact, tribal leaders thought that the optional seven-year compact, which had been mutually agreed upon by both sides, did not include a continuation of those payments. The state disagreed, and both sides went into arbitration. After that panel ruled for the state in a split decision, the Senecas took the matter to federal court.

In February 2021, a federal appeals court ruled against the tribe, but the Seneca Nation declined to continue its appeal. However, tribal leaders then said they learned that the federal government did not review the seven-year option when it signed off on the compact. Under the Indian Gaming Regulatory Act (IGRA), the Interior Department is required to review and approve gaming compacts reached between tribal nations and states.

Seneca leaders were hoping to get time for the federal government and the National Indian Gaming Commission to determine if the payments would violate IGRA. The law states that tribes should be the “primary beneficiary” of casino operations and that any payments to states should include benefits in return.

In January, Pagels announced that tribal leaders would stop the legal action and make the payment to the state – the money in question has been kept in an escrow account. However, that move was met with opposition by some in the Seneca Nation. That further delayed the payment and prompted the state to seek a freeze on tribal accounts.

Seneca Nation Seeks ‘Fairness’

The state has pointed to land it gave the tribe, as well as the Niagara Falls Convention Center, as benefits the Senecas received during the compact. However, in Pagels’ video statement, he described those in less-than-flattering terms.

“The Seneca Nation has led the way in revitalizing western New York’s economy,” the tribal nation’s leader said. “A crumbling, state-owned convention center in Niagara Falls, a largely vacant former industrial site in Buffalo, former farmland in Salamanca have all been transformed into world-class destinations, built and paid for through the vision, determination, and hard work of the Seneca Nation.”

In the same statement, Pagels laid out in clear terms what he and tribal leaders expect from state leaders when it comes to negotiating a new gaming compact.

In a word, Pagels said in a terse voice, the Senecas deserve “fairness” in the next compact.

We have received neither of those in the past two decades,” he said. “Twenty years ago, the state promised to set a condition of exclusivity that truly never existed, and which the state has intentionally erased even further at every opportunity. New York state has been all too happy to act as a partner, a regulator, and a competitor to the Seneca Nation all at the same time. That is going to change.”

It wasn’t just state leaders that were targeted in his comments. He also called out federal leaders as well for what he deemed as inaction when tribal leaders brought up questions about the compact.

“Their silence in response was a deafening disservice to Seneca people in all of Indian Country,” he said. “We deserve and demand better.”

Seneca Funds to Help Cover Bills Stadium Costs

In a statement Tuesday evening, New York Gov. Kathy Hochul said that the state received the funding. Hochul, who took over last August after then-Gov. Andrew Cuomo resigned, said she tried to negotiate with tribal leaders on a settlement.

Now, though, she’s glad to see the situation resolved, and Hochul thanked Pagels and the tribe for “fulfilling their commitment” to New York.

Hochul also outlined how the state will spend its portion of the money. It will help cover what the state pledged to spend earlier this week on a new $1.4 billion stadium for the Buffalo Bills.

These funds were generated in western New York, and I am directing the State’s share, which is more than $418 million, to the new Buffalo Bills stadium,” Hochul said. “This will ensure the Bills remain in New York State and support 10,000 construction jobs. The remainder of the funds will go directly to the counties and cities of western New York and will be reinvested to support the local economy and communities.”

It was uncertain immediately whether Hochul’s comments were also in response to Pagels’ comments.