Wednesday, October 13, 2010

Why the Seneca Nation may have a case

The Seneca Nation Gaming Corporation has been withholding hundreds of millions of dollars in gambling revenue from New York State. It pains me to say it, but they may have a case.

It should have been obvious years ago to anyone who was willing to read the Gaming Compact between the Seneca Nation of Indians and the State of New York:
12(a)(1) Subject to [the next paragraph] the Nation shall have total exclusivity with respect to the installation and operation of ... Gaming Devices, including slot machines, within the geographic area defined by: (i) to the east, State Route 14 from Sodus Point to the Pennsylvania border with New York; (ii) to the north, the border between New York and Canada; (iii) to the south, the Pennsylvania border with New York; and (iv) to the west, the border between New York and Canada and the border between Pennsylvania and New York.
With "Video Lottery Terminals" (VLTs) installed at the Erie County Fairgrounds and elsewhere, it was only a matter of time before the Senecas decided to play this card and cut New York State out of the deal entirely. What's the difference between a VLT and a modern slot machine? Not much, it seems.

Carl Paladino and Gaming the Senecas

Here's my take on Carl Paladino. It has to do with Casino Gaming, the Senecas, and Mr. Paladino's recent promises to shut down Turning Stone and renegotiate the "Nation-State Gaming Compact between the Seneca Nation of Indians and the State of New York" (its full title).

I'm all for shutting down Turning Stone. I think it has in fact been ruled illegal. It is of course doubtful that the Seneca Nation would agree to re-open the Compact, notwithstanding Mr. Paladino's charm and persuasiveness. It's pretty generous to them. (Their withholding payment to the State may have some justification, based on all of the "Video Lottery Terminals" located in their area of exclusivity, but that's a topic for another post).

But Mr. Paladino was for casinos before he was against them. In 2002, he was advocating for the Seneca casino in downtown Buffalo. I think he thought he had some kind of profitable deal with them. When the Senecas decided they wanted to put it in Cheektowaga, he started turning against them. By the time they wanted to buy a street from the city to consolidate their property, he was fully turned against them.

I see Mr. Paladino as an opportunist. He was perfectly willing to sell the Senecas land for their gambling hall, but after whatever secret deals he thought he had with them fell through, he decided to go for payback.