Cuomo Threatens To Yank Seneca Nation’s NY Casino Exclusivity

Posted on August 25, 2017

[toc]Imagine the New York State Thruway looking like some twisted and sprawled out, modern-day version of the Las Vegas Strip. 

The idea is pretty far-fetched. However, it could actually happen if New York Governor Andrew Cuomo‘s promise to build yet another casino in the already saturated Upstate New York market is more than just another empty threat aimed at keeping one of the state’s Native American casino operators in line.

Speaking on condition of anonymity, a Gov. Cuomo official told the Buffalo News last week that if the Seneca Nation doesn’t start making casino revenue sharing payments again, the state will start looking at permitting a commercial casino in downtown Niagara Falls, NY. Niagara Falls is home to the tribe’s most profitable property, Seneca Niagara Resort & Casino.

“If they don’t fulfill their obligations to continue payments and to honor the compact, we are going to pursue putting an additional casino in Niagara Falls,” the official said.

Seneca Nation casinos

The Seneca Nation of Indians owns and operates three Native American casino properties in Western New York::

  • Niagara Falls, NY’s Seneca Niagara Resort & Casino
  • Salamanca, NY’s Seneca Allegany Resort & Casino
  • Downtown Buffalo, NY’s Seneca Buffalo Creek Casino

Plus, the group owns and operates a handful of poker rooms, bingo halls, and small gaming operations in the area.

As a part of a compact signed with the state in 2002, the Seneca Nation is entitled to the exclusive right to run gaming operations in a 16-county region of Western New York. However, the state expects the Nation to make casino revenue sharing payments amounting to about $110 million a year in return for that exclusivity.

Seneca Nation stops payment

The state appeared to breach that exclusivity agreement by authorizing video lottery terminal gaming racetracks in 2009. As a result, the Seneca Nation stopped the revenue sharing payments. It took four years and the initial threat from Gov. Cuomo to build a competing commercial casino in Niagara Falls before the money started flowing again. The two sides signed a memorandum of understanding in 2013 and the payments continued.

However, they stopped again this past March.

Since signing that memorandum, the state approved the issue of four new commercial casino operations in Upstate New York. None are inside the Seneca Nation exclusivity boundaries. However, the del Lago Resort & Casino in Waterloo, NY. that opened in February 2017 is awful close. In fact, it is just a two-hour drive from the Seneca Niagara Resort & Casino.

The other new commercial casino properties include Tioga Downs racino in Nichols, NY. In December 2016, operators converted it into a full-service commercial casino property. Plus, the Rivers Casino and Resort in Schenectady, NY, which also opened in February 2017.

The $1 billion Resorts World Catskills casino is currently under construction in Monticello, NY. Its plan is to open in the Spring of 2018.

The competition or the compact?

The Seneca Nation did not say they stopped payments in the wake of increased competition encroaching on its area of exclusivity. Although they did publicly oppose the location of del Lago. Instead, the Nation claims its initial compact with the state is enforceable until 2023. However, they say it only included a provision for revenue sharing payments through 2016.

Of course, Cuomo and the state disagree.

“We believe if they don’t pay, the compact is null and void,” the Cuomo administration official told the Buffalo News. “As a condition of that compact, they get exclusivity and if they don’t honor their end we’re going to explore how to put a casino in Niagara Falls.”

Cuomo previously brushed off at least two meetings with the Nation to discuss the issue. In fact, he’s now claiming to be waiting for the results of a criminal investigation into the Nation. The Nation is accused of hiding a recording device in offices it leased to the state’s gaming commission last year.

Upstate New York casino market saturation

In the meantime, revenues at the new commercial casinos are well below initial projections.

It may be a real stretch comparing I-90 to the Las Vegas Strip. However, the Upstate New York casino market is already clearly saturated . Plus, the area’s fourth new commercial casino isn’t even open yet.

If Cuomo’s answer to the revenue-sharing payment issue with the Seneca Nation is to build more casinos, it’s only going to get worse.

Photo by lev radin / Shutterstock.com

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Martin Derbyshire

Martin Derbyshire has more than ten years of experience reporting on the poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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