Seneca Gaming Compact with New York Unclear Amid 'Disappointing' Negotiations
It appears increasingly likely that the Seneca Tribe's gaming compact with New York will be extended on July 1. This extension comes as negotiations continue over the terms of the agreement, which has seen little progress since the expiration of the tribe's Class III gaming compact in December 2022.
The Seneca Niagara casino at night. (Source: Seneca Nation)
LISTEN TO THIS ARTICLE:The Seneca Tribe, calling the ongoing negotiations "disappointing" in a conversation with media outlet WBEN, has been pushing for a reduction in the gaming taxes it pays to the state. This demand is primarily fueled by the recent approval of new casinos within New York, which the tribe argues creates a more competitive gaming environment.
Related: Seneca Gaming Compact in New York No Closer to ResolutionThe tribe contends that the original terms of their compact are now outdated and disproportionately burdensome, considering the changing landscape of the state's gaming industry. However, New York State officials have shown little willingness to concede on this point, maintaining that the current tax rates remain appropriate and necessary for state revenue.
Amid the stalled negotiations, the Seneca Tribe is holding back its financial obligations. Rather than paying the standard 25% of its gaming revenue to state or local governments, the tribe has been directing these funds into an escrow account. This arrangement ensures that the funds are available once an agreement is reached while also highlighting the tribe's commitment to reaching a fair resolution without neglecting its fiscal responsibilities.
Despite the current challenges, both the Seneca Tribe and state officials express a commitment to reaching an equitable agreement as soon as possible. The escrow arrangement for tax payments reflects a pragmatic approach to the impasse, ensuring that the funds are preserved while negotiations continue.
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New Casino Licenses Alter Tribal Gaming
The broader context of these negotiations is further complicated by New York's recent legislative actions aimed at accelerating the approval process for new casino licenses. In an effort to generate additional revenue, particularly for the Metropolitan Transit Authority (MTA), New York has approved a bill that expedites the licensing process for new casino operations.
Under the new legislation, bidders are required to submit their casino plans by the end of August 2024. This marks a significant change from the current process, which has no fixed deadline, thereby streamlining the timeline for new developments.
While the bill mandates that casino proposals be submitted by August, the final selection of successful bids is not expected until December 31, 2025. This accelerated timeline is designed to expedite the influx of revenue that new casinos are anticipated to bring, providing much-needed financial support to the MTA and other state projects. However, it also increases the competitive pressure on existing casino operators, including the Seneca Tribe.
The Seneca Tribe's gaming operations have been a significant source of revenue for both the tribe and New York State. The current impasse over tax rates and the future terms of the gaming compact underscores the complex dynamics at play in the state's gaming sector.
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