Niagara Gazette

November 29, 2012

GUEST VIEW: An indepth look at the Seneca Casino issue

By Dan Davis
Niagara Gazette

Niagara Gazette — To fully understand the casino, we need to separate exclusivity payments to the state of New York from the distrubution of these funds to the city. In laymen terms, the state has a contract with the Seneca Nation and the city has a contract with New York state. If the city wants to change its contract with New York, they need to do so through the state legislature. The law behind the compact, the provisions of the compact and the New York State Finance Law that governs distribution of exclusivity payments can be summerized as follows:

The Indian Gaming Regulatory Act: “A tribe seeking to engage in class III gaming is required to give notice to the state that it wishes to negotiate a compact. Upon receipt of that notice, the state is required to negotiate with the tribe in good faith.” Such compacts are subject to approval by the Department of the Interior.

Gaming Compact-State Contribution: “In consideration of the exclusivity granted by the state prusuant to Paragraph 12a of the compact, the Nation will contribute to the State a portion of the proceeds from the operation and conduct of each category of Gaming Device for which exclusivity exists.” This payment currently stands at 25 percent and the compact is scheduled for negotiations in 2016.

Gaming Compact- Party Dispute Resolution: “Method of dispute resolution. If the parties do not reach such solution within a period of thirty (30) days after such meeting or if the Parties fail to meet and thirty (30) days pass after the written notice of a claim is received, then upon notice by either Party to the other, either Party may submit the dispute, claim question or disagreement to binding arbitration.”

Tribal-state compact revenue account - State Finance Law 99H: “There is hereby established in the joint custody of the comptroller and the commissioner of taxation and finance an account in the miscellaneous special revenue fund to be known as the “tribal-state compact revenue account. Moneys of the account, following the segregation of appropriations enacted by the legislature, shall be available for purposes including but not limited to: (a) reimbursements or payments to municipal governments that host tribal casinos pursuant to a tribal-state compact for costs incurred in connection with services provided to such casinos or arising as a result thereof, for economic development opportunities and job expansion programs authorized by the executive law.”

It is clear New York Finance Law 99H is separate from the compact and refers to the fund as, the “tribal-state compact revenue account.” The city, through its legislators, could negotiate with the state for better distribution of the funds, But the Seneca Nation is not obligated to do so. For one thing, the city of Niagara Falls hasn’t the wherewithal to grant exclusivity. Secondly, the Indian Gaming Regulatory Act specifically states the tribe will negotiate with the state.

I think there are faults on both sides of the exclusivity issue and, except that it should have happened three years ago, and the arbitrator should uphold the exclusivity clause where it applies to expanded casinos by the state into the exclusivity area. I take no stand in the arbitration issue.

What I do have a problem with is how we address casino cash issues going forward. In my observation, although, there isn’t any path for the Seneca Nation to pay us directly, we can change how OUR funds are credited and disposed.

For instance:

Since we lost tax revenue, we could assess the casino properties at full market value and, that portion (of the tribal-state compact revenue account fund) could go directly into the city’s tax revenue.

There should be no mandates — casino funds should be distributed for economic development and, where feasible, should meet a reasonable return on investment.

Casino funds should never be used to supplement budget shortfalls. Uncollected casino funds should not be used to balance the city’s budget.

Whatever the arbitrator’s decision, It is time for the city to move on in a well-informed, prudent manner uninfluenced by petty politics.

Dan Davis of the Niagara Community Forum