Published: May 31, 2023

The Buffalo News -The Editorial Board: Hold off on casino compact legislation

We’re not sure what's going on between the Seneca Nation of Indians and State Sen. Tim Kennedy, but the late push for legislation affecting a new gaming compact between the tribe and the state is plainly in trouble. Part of the proposed measure is necessary but could be taken care of later; another part may be appropriate but seems rushed as the 2023 legislative session hurtles toward its end. For that reason, it’s better for Albany to hold off on this, giving both sides an important opportunity to show they are ready, in good faith, to negotiate an agreement that is both fair and readily enforceable.

The existing compact, signed in 2002 when George Pataki was governor, expires on Dec. 9. Before a new one can be signed, the Legislature must approve a bill giving Gov. Kathy Hochul authority to enter the agreement. With the help of Kennedy, a Buffalo Democrat, the Senecas are pushing a bill to do that. It might be better if it happened now, before legislators leave Albany, but it’s not essential. There are other ways for it to be accomplished later in the year and no one should doubt that it will. Too much money is on the table – for the Senecas, for the state and for the localities where their casinos are located: Niagara Falls, Buffalo and Salamanca. This is going to happen.

More important to the Senecas is a clause that would give the Senecas the right to sue New York if they believe the state is negotiating in bad faith. President Rickey Armstrong Sr. is quick to say he believes that discussions are proceeding in a hopeful way and notes that if that trend continues, the matter would be moot. Nevertheless, based on a quirk of law, the Nation wants the protection other states have offered to Native American tribes that own casinos.

The issue is this: While the federal Indian Gaming Regulatory Act establishes standards of fairness, including the right to sue if a tribe believes a state is not negotiating in good faith, a decision by the U.S. Supreme Court undercuts that right. To retain it, a state must waive its sovereign immunity. California, Washington and Michigan have done so. The Senecas want New York to follow suit.

The question is, with just seven days left in this session, should Albany ram this through? Given the bad faith shown by both sides over the life of the existing compact, it’s better to hold off. While the Senecas have been given good cause to doubt the state’s good intentions, New Yorkers also have been given reason to question the Senecas’ reliability.

After years of acrimony, the first dispute was resolved in 2013 with the state belatedly agreeing that “racinos” in Hamburg, Batavia and Canandaigua violated the zone of exclusivity guaranteed by the compact. But only four years later, the Senecas again withheld payments based on the plausible, if strained, conclusion that an automatic extension of the agreement in 2017 failed to mention that the Senecas needed to continue making payments to the state. Hundreds of millions of dollars were at stake.

As required by the compact, the dispute was referred to binding arbitration, which ended in a ruling for the state. That should have been the end of it. But the Senecas continued to withhold payments until early last year, when, after exhausting federal court appeals, the tribe still refused to pay.

With that, Hochul used an available state law to induce the payments, blocking Seneca banking accounts. It was a harsh move that the Senecas bitterly resented, but with $564.8 million owed and no prospect of a resolution, the state did what it was allowed to do.

The consequence was that bad blood became poisoned, and it was in that context that negotiations on a new compact began. It didn’t have to be that way but, given the discreditable conduct of both sides over the previous 20 years, it became inevitable.

Under different circumstances – an earlier start, a more reliable history – the waiver the Senecas seek could well be worthy. But New Yorkers have earned their skepticism over the willingness of either side to respect the other.

That makes this a time for both parties to prove honorable intent. They need to demonstrate a commitment to producing an agreement that offers confidence to future negotiators.

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