NIGC: New York court-ordered Seneca casino payment may violate IGRA
Posted: Sep 24, 2021, 10:31 a.m.
Last updated on: September 24, 2021, 10:31 a.m.
The U.S. tribal gaming agency is now determining whether a $ 470 million judgment imposed on the Seneca Nation and owed to New York State would violate the Indian Gaming Regulatory Act (IGRA).
The involvement of the National Indian Gaming Commission (NIGC) is the latest twist in a long legal battle between the Senecas and New York over their Class III gaming contract. In February, a federal appeals court upheld a ruling against the tribal nation, determining that it was still responsible for paying the state 25% of the revenues of its three casinos.
In 2002, the Senecas and New York signed a contract with a 14-year base and an automatic seven-year extension. However, only the basic agreement provided for revenue sharing payments to the state, with these reaching 25%. Tribal chiefs argued that the extension did not cover any payments, but the state disagreed.
After losing in arbitration, Seneca executives filed a lawsuit in the U.S. District Court for the Western District of New York in June 2019. The tribal leaders argued that the arbitration panel had not followed the IGRA in its decision.
NIGC: New York must offer a “meaningful” return
However, since the appeals court ruling, the US Department of the Interior has informed tribal leaders that it has not conducted an economic assessment of the seven-year extension – a step required under the IGRA. This led the nation to ask U.S. District Judge William M. Skretny in April to overturn his original ruling.
On September 16, lawyers representing the Senecas informed the judge that their clients had received a letter the same day from NIGC Chief Compliance Officer Thomas Cunningham. This letter informed the tribal nation that Bryan Newland, the Assistant Secretary for Indian Affairs, had referred the lawsuit against Seneca to the commission for review.
Cunningham said in the letter to Seneca Chairman Matthew Pagels that the commission was concerned about New York’s amount of money, especially since the state was offering nothing in return.
“If a state wants to receive part of a tribe’s gambling revenue, then it must offer the tribe something meaningful in return” Cunningham said in the letter. “A revenue-sharing payment to a state that does not meet this standard does not comply with the IGRA.”
On Monday, the Seneca Nation requested a stay of ordering the payment until the NIGC makes its decision.
New York calls for Seneca payment
Lawyers for the state expressed skepticism about the referral in their response filed Wednesday. They claimed the tribe was seeking to “create an alleged financial hardship” to avoid paying New York.
Gregory Starner of White & Case LLP said arbitrators and courts have ruled on the case and the Seneca Nation has chosen not to take the case to the Supreme Court.
Nor does the NIGC letter present any extraordinary circumstances or extreme difficulty to justify setting aside this Court’s final judgment, âStarner wrote. “The NIGC does not purport to impose any sort of fine or penalty on the Nation, and the prospect of a permanent or even temporary closure of the Nation’s gaming facilities remains entirely speculative and hypothetical.”
Starner added that it was “past time for the nation to honor its obligations under the DOI-approved pact and judgment.”
Seneca Nation attorneys provided a copy of Newland’s letter to the court on Friday.
In the letter to NIGC chairman E. Sequoyah Simermeyer, Newland said Seneca officials informed the Home Office of the appeals court decision in March. This led to the revelation on the economic valuation.
“All references in the 2002 Secretary’s letter refer to the pact as 14 years and note that the pact was considered approved, ‘but only to the extent that the pact is consistent with the provisions of (IGRA)’ “ Newland wrote.
Newland added that interior officials have asked both the tribal nation and New York to submit the revenue sharing arrangements for consideration. However, the state did not respond.
Without receiving any benefits in return, Newland told Simermeyer that Seneca’s payments could violate IGRA provisions calling for the nation to be “the sole owner interest” and “the primary beneficiary” of its casino operations.