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Seneca Nation says 25 percent share of vending machine revenue is too high

Date published: May 6, 2021, 09: 14 hrs.

Last updated: May 6, 2021, 09: 48 hrs.

Devin O'Connor

The Seneca Nation of Indians says they share 25 percent of slot machine revenue in New York no longer allows its three casinos to enjoy the same economic benefits the games provided.

Seneca Nation casinos slot revenue compact
A bounty of slot machines is visible on the floor of Seneca Niagara Resort & Casino. The Seneca Nation tribe says it should no longer be forced to share 25 percent of slot machine winnings in New York state. (Photo: Seneca Nation)

Seneca President Matthew Pagels opined this week that the ongoing expansion of casino gambling in New York and the Northeast has led to market saturation. As a result, Seneca casinos are taking in less money and say they continue to share 25 percent of gross gaming revenue (GGR) on slot machines is now unrealistic.

The gaming landscape has changed dramatically in Western New York, "Pagels stated. "I think the Seneca Nation's position is that 25 percent is not a fair assessment and that's why we're asking the state to submit to the Department of the Interior. "

The second part of Pagels' commentary refers to the Seneca Nation challenging a February federal appeals court ruling that led to the conclusion that the tribe owes New York City millions.

The tribe is looking for new conditions

The Seneca Nation and New York in 2002 reached a 14 -year compact for Class III gaming that required the tribe to share 25 percent of its GGR slot with the state. The legally binding compact included a seven-year extension clause that extended through 2023.

The tribe denied that the extension did not specify that the 25 GGR percentage mandate was required. The Native American group stopped sending slot machine money to the state in March 2017.

The contract has since been taken to court, and the tribe is transferring GGR into an escrow account. The arbitration panel found that it was "unreasonable" and "contrary to common sense" for the Senecas to claim that the extension was free of the revenue sharing element.

A federal appeals court upheld the decision in February . But the tribe's legal battle didn't end there.

Late last month, the Seneca Nation filed a motion in federal court in Buffalo, New York, asking for "relief" from the judgment. The Seneca's motion acknowledged that it is on the hook for $435 million, but believes that a recent letter from the U.S. Department of the Interior (DOI) to the tribe shows why relief is perhaps warranted.

"We have serious concerns about extending revenue sharing through FY15-FY21 because we haven't done an extension analysis," explained Paula Hart, director of the Office of Indian Gaming at DOI's Bureau of Indian Affairs.

Senecas Ask the DOI for help

Pagels told reporters he hopes the DOI will intervene to establish a more favorable GGR participation rate for the tribe and reduce the $435 million judgment.

In March former Representative , Deb Haaland (D-New Mexico) was sworn in as DOI Secretary. A member of the Laguna Pueblo, a federally recognized tribe in New Mexico, she is the first Native American to become a member of a presidential cabinet.

Pagels said Haaland and DOI can "help us negotiate a new contract."

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