Seneca Nation, Gov. Hochul To Negotiate New Gaming Compact Amid Changes In New York Gambling

Written By Derek Helling on January 25, 2022

When the last Seneca gaming compact took effect, the landscape of gambling in New York state was nearly an entirely different world than it is now. That’s what NY Gov. Kathy Hochul and the operator of three tribal casinos will have to navigate as they begin work on a new agreement.

The emergence of commercial casinos, possibilities for more, and the advent of online gambling are among the significant changes the years since 2002 have seen. It’s unclear how the two parties will account for them right now.

Work on a new Seneca gaming compact begins

Discussions on a new compact were impossible until an important matter under the previous agreement became resolved. The Seneca Nation had withheld payments to the state for years.

The Seneca Nation maintained that it didn’t owe the state any revenue-sharing payments after 2017. The state then sued and a federal court ruled the Seneca Nation owed the state a sum of $435 million.

Earlier this month, the Seneca Nation agreed to make the payment instead of appealing its loss in court. In exchange for dropping its defense, the state has agreed to start work on a new compact.

It’s fair to expect the new compact to clearly define exactly how the tribal group will pay to the state and for how long. Beyond that, though, there are a lot of possibilities right now.

The world of 2002 versus today

When the Seneca Nation and the state last finalized a gaming compact, it was quite a different scene. Tribal casinos’ only legal competition for gambling dollars in the state was the New York Lottery.

A few years later, the state’s racetracks got clearance to convert to “racinos.” They added a limited number of slot machines but had no table games. Fully-fledged commercial casinos wouldn’t enter the conversation for another 11 years when a constitutional amendment allowed for their licensure.

Even when the four upstate casinos opened, sports betting remained illegal in NY until late 2018. That’s when the US Supreme Court opened the door to both commercial and tribal casinos accepting wagers on sporting events in person.

Then, last year, the state legalized online sports betting. That’s recently launched with tremendous success. So, how will the Seneca Nation try to account for all this new competition in a compact?

How the negotiators might frame a new compact

They might try to reduce the percentage of revenue they pay to local and state governments. The argument for that concession could be that because of the increased competition, they need more of their revenue to compete.

It’s quite unclear whether a new compact will allow the Seneca Nation to offer online sports betting. Right now, each of the three Seneca casinos houses a self-branded retail sportsbook.

The Senecas could contract with a vendor to build an online platform for their sportsbook. At the same time, it might not prove a worthwhile investment. Current federal laws restrict the ability of tribal gambling operators to offer online gaming on non-tribal lands.

For that reason, online betting would probably only be available on each casinos’ grounds. Hence, the Senecas might pass on it. It’s possible they could allow for it in the compact in case federal law on the matter changes in the future, too.

Perhaps the most telling aspect of the new compact will be its length in terms of time, though. The Senecas may prefer a shorter term to allow for more potential changes in the gambling industry in NY in the future. They might have to pay for that in other ways, though.

Photo by JHVEPhoto / Shutterstock
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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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