Sources say that Governor Kathy Hochul agrees with the Seneca Nation‘s interpretation of a 2002 gaming compact that sold the Tribe gaming exclusivity rights in Western New York west of State Route 14 in exchange for a share of top-line slot machine revenues at its casinos in Niagara Falls, Salamanca, and Buffalo.
But the State, early in the administration of Governor Andrew Cuomo, authorized slot machine revenues at Delaware North‘s racetrack casinos in Hamburg and Farmington, effectively defrauding the Nation of the asset it purchased from the State.
The compact is explicit in linking revenue sharing to exclusivity rights and has terms that eliminate payments to the state if exclusivity is breached. Additional language specified that the payments would end in 2014, without regard to whether or not the compact was extended to 2023.
And the limited waiver of sovereign immunity, very narrowly tailored in the compact, prevents the Courts from making monetary judgements in regard to disputes stemming from the agreement.
Rather than allowing this unsolvable dispute to drag on, Hochul operatives explain to The Chronicle that she wants to “cultivate a new era of cooperation” with the Seneca Nation and other Tribes.
“Kathy will be writing the Seneca Tribal Council a letter in the next few weeks affirming her shared interpretation of the longstanding revenue dispute, relinquishing any claim to the more than $400 million that is accumulating in escrow,” he affirms.
“She may encourage the Nation to invest its holdings in Niagara Falls development project, and she may even offer public-private partnership opportunities in that regard, but she recognizes the Nation’s sovereign status and will make no effort put strings on the escrow account,” the operative explains.
“Kathy wants to collaborate on projects with the Nation,” he insists. “She feels really bad about how Cuomo defrauded the Tribe.”
Hochul plans to forgive the “paper debt” that the State has obligated the City of Niagara Falls to in recent years in anticipation of a revenue windfall that would never come. Going forward, the City will have to draft its budgets without the expectation of casino funds from New York State. It’s unclear whether or not Hochul is willing to abate that revenue loss with state funds.
Hochul may reimburse the Seneca Nation’s legal costs stemming from the dispute and wants to meet with the Council’s Foreign Relations Committee in the coming months to build a “long-term rapport” with elected officials.
“What Kathy understands that Cuomo didn’t get is this: if you want to be President you can’t have an Indian Tribe making noise about how your administration was complicit in defrauding them of billions of dollars,” one Haudenosaunee political operative posits.
“I suspect that a big part of Cuomo’s downfall stems from his dispute with the Seneca Nation. Cuomo ruffled a lot of feathers, to use a politically incorrect term,” the operative jokes.
The operative recommends that, if Hochul is looking to build a strong and mutually supportive relationship with the Seneca Nation, she should offer a second casino compact that allows a second Seneca gaming corporation to build three gaming venues in the lucrative downstate market — including inside New York City.
“The Tribal Council would certainly be open to buying exclusivity rights on a more narrowly tailored basis, but would like the local community to benefit rather than the State,” he explains. “There are locations in the Hudson Valley, Long Island, Staten Island, and Manhattan that interest the Senecas.”