4 August 2006

Downtown Buffalo Seneca Casino Faces Hurdles

Looks like the Seneca Indians have made a big mistake. It could be big that is, if they don't rectify it soon.
The City of Buffalo wanted guarantees that half of the 1000 jobs at the proposed new casino, would go to Buffalo residents, and that many would go to minorities. Sounds reasonable, but the Indians said no. Nor would they agree to not add to their "sovereign" land portfolio in Buffalo.
This prompted the city to stop the sale of Fulton St. to the Indians. The street sale is necessary for the Indians if they want to build a large casino.

Now the Indians have opted to build a temporary 5,000-square-foot casino with 100 slot machines in Buffalo. At least, that is what they are saying today.

An Indian Casino does not benefit an area or a territory like Canadian Casinos not owned by Indians do. In Canada, only 10% of the house winnings go to the owner of the casino, and that is taxable, unlike the proposed Buffalo casino, where Indians pay no taxes, and keep everything. Well, except a small amount. Most Canadian casinos are located at racetracks. 10% goes to purses, which is a benefit to the local economy in way of horse industry jobs. In Canada, the bulk of the casino winnings goes to the government, which distributes most of it back into improvements.
Thomas Golisano, owner of the Buffalo Sabres has written an article, showing how the proposed Buffalo casino is a terrible deal:

"A downtown casino is a terrible business decision for Buffalo’s economy. Based on the Seneca’s projections and government filings, the Buffalo Creek Casino will take in $154 million to $188 million from gamblers, mainly living in Buffalo and surrounding suburbs, in the first year alone. That’s money that will not be spent at local businesses. In return, the city of Buffalo would only receive $5 to $7 million annually in lieu of taxes. What a “deal.”

Furthermore, the money the Senecas take out of our local economy goes to them tax-free. They pay no local real estate taxes, no sales taxes and, as a sovereign nation, the Senecas themselves pay no income taxes on money earned from the casino.

How can surrounding businesses compete on a level playing field when the casino can offer all its products and services tax-free? They simply can’t."

One more argument has been set made via a lawsuit. The charges are that Interior Secretary Gale Norton and other federal officials evaded or misapplied laws governing the siting of Indian casinos, the environment and historic preservation when they approved casino plans negotiated by Gov. George Pataki and the Senecas.

At issue is whether a casino should be allowed even if the property is found to meet the legal threshold for sovereign territory. Opponents say no because of a provision in the IGRA that generally prohibits gaming on lands acquired by tribes after 1988. The Senecas bought the nine-acre Buffalo parcel in 2005.

The government says this case is an exception to the no-gambling provision because the Senecas acquired the land as part of the Seneca Nation Settlement Act of 1990, which was meant to compensate the tribe for an unfair, century-old lease agreement.

Skretny is scheduled to hear oral arguments in the case in October.

This angle may not be successful because precedent has already been set:

'Nationwide, the country’s 408 Indian gambling facilities brought in $22.6 billion in revenue last year. The vast majority of tribal casinos have been built on existing reservations, but some three dozen are in places that weren’t Indian land in 1988, and many more tribes are seeking to develop property off their reservations.'

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