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Stoyan Todorov December 5, 2023 3 min read
NY Gov. Hochul Approves Seneca Tribal Compact Extension for Now
A new temporary compact extension will allow the tribe to continue operating gambling products under Class III license, while the state will generate additional revenue
Gambling compacts have been at the core of gambling operations in some jurisdictions around the United States, with New York not any different, and the Empire State also running revenue-sharing agreements with tribal gaming establishments.
Seneca Nation to Continue Running Gambling Business Operations
The Seneca Nation in Western New York has a compact with New York through December 9, 2023, which will now be temporarily renewed as confirmed by Gov. Kathy Hochul, with the revenue-sharing agreement extended through March 31, 2024.
This agreement allows the Seneca Nation to continue running all of its three venues in the state, to wit Seneca Niagara Resort & Casino, Seneca Allegany Resort & Casino, and Seneca Buffalo Creek Casino.
The compact negotiation is important, because under the Indian Gaming Regulatory Act, federally-recognized tribes may operate Class I and Class I gaming, but Class III gaming, which features table games and gives casinos their fully-fleshed look, is subject to additional red tape.
Commpacts have proven to be a very successful negotiation tactic in many places already. Florida, for example, has been able to launch sports gambling, effectively going around the need to amend its State Constitution by establishing an agreement with the Seminole Tribe of Florida to run sports betting out of tribal land to wield the entire online gambling industry in the state.
This was interestingly interpreted to also include online betting platforms that can be hosted on sovereign tribal land, and that have faced severe legal challenges. Yet, most of these have been dismissed with the Seminole Tribe now looking as a shoo-in.
Yet, Seneca Nation has not won a definite extension, but just bought time to continue negotiating with the state, as the governor and tribal leaders are butting heads over the tax payable by the tribe. New York has been known as one of the keenest jurisdictions to collect tax revenue from local gambling companies and business owners.
Negotiating Exclusivity in Times of Fast Market Liberalization
The compact is an important win for the tribe nevertheless, as the Seneca Nation wants to retain its exclusivity of table and slot games west of State Route 14, which guarantees it a good influx of revenue and no real competition at least in its chosen geography.
New York is also benefiting as the state claws 25% of the tribe’s gross gaming revenue, which generates a windfall of roughly $100 million for the state every year.
This rate, though, is now the subject to debate, as the Seneca Nation has cited the changing realities of new commercial casinos that are being built closer to its territories and effectively drawing business away from the tribal properties. Seneca hopes to pay a little less than its current 25% rate to remain competitive.
This is a tough sell in a state that already charges sports betting businesses with 51% on their gross gaming revenue.
Gov Hochul was also the subject of some criticism as her husband, William Hochul, was until recently working for Delaware North, a competitor to Seneca Nation’s gambling businesses, which made the governor reluctant to weigh in, recusing herself at first.
Her husband has since quit his position at Delaware North, allowing the governor to weigh in without any speculation about the fairness of her opinion.