New York and Seneca Nation “Unable to Reach a Final Agreement” After Criticism on Initial Deal

Article ByDavid Weir

June 26, 2023

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Posted in: New York Gambling News, US Casino News, US Gambling News

The surprise gaming compact agreement announced by New York State officials and the Seneca Nation tribe at the beginning of June has been scrapped for now.

The office of Governor Kathy Hochul (D) confirmed the news late last week.

“While we have engaged in productive discussions with the Seneca Nation recently, we were unable to reach a final agreement, and the Assembly did not pass the authorizing legislation,” Hochul’s communications director Julie Wood told Buffalo News.

The Seneca Nation’s current gaming compact with New York is set to expire in December of this year. It allows them to operate three casinos in Western New York.

This month’s agreement of a deal in principle was a welcome surprise, given the contentious relationships between the two parties.

However, it then emerged that the behind-closed-doors negotiations may have included a possible new casino license for the Seneca in Rochester, New York.

The considerable backlash from that news meant the New York Assembly was unsure of the agreement. That’s even after Hochul’s Office promised Assembly members that a Rochester casino had been dropped from the plans.

The Assembly didn’t even agree on scheduling a vote on the authorization bill Hochul needed to sign before it adjourned for the summer.

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Complicated History

Seneca and New York State officials have not had an easy relationship in recent years, including a $565 million tax dispute that lasted from 2017 to 2022.

When Hochul took office in 2021, she faced a huge tax dispute with the Seneca tribe, who claimed the 2002 gaming compact had technically already expired.

In 2022, after years of court proceedings, Hochul got federal approval to freeze the Nation’s banking assets until they paid up. Which they did.

But the relationship between tribal leaders and Hochul have remained frosty ever since.

Things were further complicated when Hochul personally excused herself from the recent negotiations. That’s because her husband, William Hochul, works for and owns interests in Delaware North, a downstate casino venue that could potentially compete with the Seneca.

Instead, her senior aides were in charge of brokering a new compact.

Now that tentative agreement in principle will be going back to the drawing board.

“If the Assembly was willing to take up the legislation, the Nation was willing to make significant concessions from our previous agreement in principle,” said Seneca President Rickey Armstrong Sr.

“Unfortunately, we were not able to arrive at a revised agreement that met the needs of the Seneca people while also addressing the concerns of the Assembly and the Executive Office.”

Level of Trust

Staff from Hochul’s office addressed the Assembly last week. They said the Seneca and the state had renegotiated on the Rochester casino plans, and that such a venue would no longer be on the agreement.

However, Assembly members were still skeptical. The initial proposal was announced without many details, and the Rochester casino part of the agreement was only revealed after insiders leaked it to the media.

That clandestine approach to negotiations was not appreciated by some. Assemblywoman Sarah Clark (D-136) spoke out against the process, “given what has happened in the past week-and-a-half and how much we were kept out of the process initially.

“Not having that level of trust – we didn’t feel comfortable with a verbal statement that (the agreement) doesn’t include a Rochester casino.”

If any new gaming compact is negotiated over the break, it will need to return to the Assembly and then to the Senate again before Governor Hochul can sign off on it.

It will also need ratification from the Seneca Nation’s own internal governance.

However, the prospect of no deal being signed by December is not exactly a great outcome for either party.

“Continuing under the terms of our outdated current compact beyond its expiration on December 9 is neither a reasonable nor acceptable solution,” said Armstrong.

The Tribe will soon be facing more casino competition, as three downstate New York casino gaming licenses are set to be handed out before the end of the year. Massive national and international operators are competing for a New Yok City casino venue license, including real estate tycoon Larry Silverstein, the several tribal operators who back a Coney Island casino, and Wynn Resorts in the Hudson Yard neighborhood of New York City.