For evidence that little good comes from gambling, we refer you to the dispute that is raging between the state of New York and the Seneca Nation of Indians. The City of Niagara Falls was supposed to benefit from hosting the Seneca Niagara Casino – which pays no taxes to the city, county or state. But instead, the casino has become its burden, and through no fault of the city.
The problem is that in Niagara Falls – as well as Salamanca and Buffalo, where the Senecas also have casinos – the Senecas are withholding payments owed to the state and the cities because they contend – and not without reason – that the state has violated the zone of exclusivity granted them by the agreement that permitted casino gambling 10 years ago.
As a consequence, Niagara Falls has been robbed of more than $60 million that it was due for hosting the casino, even as it continues to pay the costs of having the gambling hall within its city limits.
The Senecas claim the state has violated the compact by allowing gambling at race tracks in Hamburg, Batavia and Canandaigua. New York disagrees, but says that even if it has, the Senecas were wrong to withhold all of the money owed to the state, equal to 25 percent of the take from the casino slot machines. The matter is in arbitration with no indication of a prompt resolution.
But there is at least a ray of good news in this. Speaking recently with The Buffalo News editorial board, Gov. Andrew M. Cuomo agreed that Niagara Falls should be held harmless in this dispute.
In other words, if the result of the arbitration process is that the state is found to have violated the compact and that the Senecas appropriately withheld revenue from the state, Albany will be on the hook for the revenue Niagara Falls has lost. If the Senecas are found at fault, they would be required to pay up.
One way or another, then, it appears that Niagara Falls will get its money.
That may be cold comfort, though, given how close to the financial edge the city is and the dim prospects for any quick resolution. Even if arbitration concluded tomorrow, an appeal by the losing side is all but certain.
That suggests a clear lesson for any community that lusts after a casino over which it has no control: You might do all right, but don’t bet the house on it.