Federal District Court Upholds Arbitration Ruling That Seneca Nation Owes Millions in Back Payments

A federal district judge issued a determination Friday that the Seneca Nation owes New York State upwards of $225 million in back casino revenue payments. 

The Nation had argued that, under the terms of its 2002 gaming compact, it was only required to pay the state for the initial term of 14 years. In early 2017, the Nation notified state officials that its fourth quarter 2016 payment was its final payment.

Arbitration ensued, and back in January, a panel voted 2 to 1 in favor of the state, ordering the Tribe to pay back revenue — roughly $100 million annually, totalling about $200 million at the time. The Senecas subsequently requested an opinion from the U.S. Department of the Interior. Upon receiving request for more time from the Interior, the Seneca Nation filed suit in New York federal court to have the state panel’s ruling vacated, until the Secretary of Interior reviewed it. 

Yesterday’s decision from the United States District Court, Western District of New York denies the Nation’s motion to vacate the award. 

Rickey Armstrong Sr., President of the Seneca Nation of Indians, responded on Friday: 

“The Nation has received the decision issued by the Court earlier today.

Our Compact agreement is clear in what it says and in what it does not say. Despite that lack of ambiguity, a majority of an arbitration panel interpreted that a new, unwritten obligation exists for the Seneca Nation. Today, the Court has affirmed their interpretation.

We understood the reality that the arbitration and court proceedings may not ultimately uphold the language of the Compact as written. Yet, it is our obligation to defend our agreements, so they are not compromised for the benefit of others.

We will take the time to review today’s decision and determine how the Nation will proceed.”

The Seneca Nation operates casinos in Niagara Falls, Salamanca and Buffalo. Since the Seneca Nation began its gaming operations in 2002, the Nation has sent more than $1 billion in revenue share contributions to the state of New York, in addition to investing more than $1 billion to develop its three gaming properties. Today, the Nation’s casino operations employ approximately 4,000 workers, making Seneca Gaming Corporation one of the largest private employers in Western New York.

Buffalo City Council President Darius Pridgen commented: “My hope going forward is that we can continue to have a positive working relationship with the Seneca Nation as a stakeholder and important part of our community.”  

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