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Cuomo Too Busy to Focus on Gaming Stalemate That Threatens to Deal Niagara Falls a Knockout Punch

By: Tony Farina

Gov. Andrew Cuomo may be focused on his re-election bid these days, but what is he doing about the latest stalemate with the Seneca Nation over sharing gaming revenue?

There’s not much evidence he is doing anything, and the city of Niagara Falls along with Buffalo and Salamanca–the three host cities for the Seneca casinos–are reeling from the loss of slot revenue more than a year ago.

The Senecas stopped paying the state about $110 million a year, some of which was shared with the host communities, when the Seneca tribal leaders discovered that a close reading of the 2002 gaming compact did not spell out payments of slot revenue to the state after the 14th year of the agreement. Too bad the state didn’t read it, if that’s what it says.

To say the state was blindsided would be an understatement. The state insists the Senecas are still obligated to pay in exchange for their exclusivity, but the Senecas don’t agree. The Senecas have always felt the state never honored the exclusivity agreement by opening other gaming facilites, and with nothing in writing about paying beyond 2016, they stopped. It seems inconceivable the state didn’t read the compact after the last dispute, but apparently the Cuomo administration fell short on its due diligence and now there’s hell to pay.

The two sides still have not agreed on a third arbitrator to hear the dispute, but there’s no agreement in sight on selecting that arbitrator. Meanwhile, Cuomo is raising millions to get re-elected–$31 million at last count–and the host cities are counting the millions they have lost.

Niagara Falls used $11 million of last year’s $16 million in casino revenue to come up with this year’s budget, but what about next year? City lawmakers have crafted a casino spending policy if they receive funds, but there’s not a shred of evidence any slot money will be coming in anytime soon, if ever. Maybe it would be wiser to try and work something out with the Senecas, but beyond a few meetings, nothing has happened.

And why hasn’t Mayor Paul Dyster taken a more active position in this crisis, like going to the extent of meeting with the Senecas himself to try and reach some sort of agreement outside of the arbitration process? Is he afraid to rattle the governor, who he has supported through thick and thin, including in the Hamister Hotel fiasco that took years to resolve?

Dyster did play a winning hand In the last gaming dispute that ended in 2013 with Niagara Falls receiving $89 million in overdue casino revenue after Cuomo negotiated a settlement during the arbitration process. But this time, things may be different and there’s no hint of any ongoing negotiations.

Things have changed a great deal since 2013. The tax-free Seneca casinos are still bringing in money but their handle is down by all accounts. The Senecas are also very likely unhappy over the state’s gaming expansion, viewing it as more competition. One of the three new commercial casinos that opened upstate, Del Lago in Waterloo, is reportedly falling far short of projections with one Wall Street rating agency warning it might not be able to pay off its debts. The other new casinos are also coming up short.

But the biggest crisis right now is local, right here in Niagara Falls as the tourist season is about to begin. There is not enough money to pave roads, incentivize economic development, or do much else. And that includes the Board of Education and Medical Center. And next year could be much, much worse if there’s no resolution of the crisis. And as we said earlier in this piece, no resolution is in sight.