BUFFALO — A federal judge Friday upheld an arbitration award against the Seneca Nation of Indians to pay New York State more than $225 million in casino revenue.
The Senecas had notified state officials in March 2017 that the fourth quarterly payment in 2016 would be the final payment under the 2002 Seneca Gaming Compact. The notification set off a year-long arbitration process that ended in January 2018 when the arbitration panel ruled 2-1 that the Senecas owed the state $225.8 million plus its 25 percent contribution back to early 2017.
In his 30-page decision, U.S. District Judge William Skretny wrote: “Whether this Court or any other would interpret the Compact the same way is not at issue, for a federal court must confirm an arbitration award so long as there is a ‘barely colorable justification for the outcome reached,’ a standard that is easily met here. Because there exist no grounds to vacate the majority’s arbitration award, it must and will be confirmed.”
Skretny noted “a majority of the arbitration panel assigned to the dispute definitively held in the State’s favor, Rather, the exceedingly narrow question before this Court is whether the panel majority ‘manifestly disregarded’ governing law in reaching its determination. Because this Court finds that it did not, the State’s cross-petition to confirm the arbitration award must be granted, and the Nation’s petition and motion to vacate the award must be denied.
Referral to the Department of the Interior is “unnecessary,” Skretny wrote, adding the issue “was not whether the (Interior) Secretary explicitly approved state-contribution payments during the renewal period, but rather, whether the terms of the Compact that the Secretary did approve provide for payment of the state contribution during that term.”
The court affirmed that, and called for “making all future payments in accordance with the compact.”
Rich Azzopardi, senior advisor to Gov. Andrew Cuomo, reacted to the federal court ruling affirming the Nation’s obligation to pay the casino compact funding.
“The court confirmed what we’ve said all along: the Seneca Nation needs to fulfill their obligations, make their neighbors and the state whole, and pay what they owe in exchange for their exclusive gaming rights,” Azzopardi said. “It is our hope that they end this charade, stop using the courts to delay, and pay what they owe.”
Seneca Nation President Rickey Armstrong Sr. issued a prepared statement that said, “Our Compact agreement is clear in what it says and in what it does not say. Despite that lack of ambiguity, a majority of an arbitration panel interpreted that a new, unwritten obligation exists for the Seneca Nation. Today, the Court has affirmed their interpretation.
“We understood the reality that the arbitration and court proceedings may not ultimately uphold the language of the Compact as written,” he said. “Yet, it is our obligation to defend our agreements, so they are not compromised for the benefit of others. We will take the time to review today’s decision and determine how the Nation will proceed.”
After the Nation stopped payments, the state withheld much of the casino revenue sharing from host municipalities including Salamanca, Buffalo and Niagara Falls. Normally, the city of Salamanca received about $6 million a year, while the Salamanca City Central School District and Cattaraugus County receive about $1 million each.
The city recently received an emergency allocation from the state because it had spent most of its reserves since the state’s casino revenue sharing payments stopped 22 months ago.