Seneca off-reservation casino case appealed

Business | Law

Monday, October 27, 2008

The Department of Justice on Friday said it will defend the legality of an off-reservation casino whose operation has a major impact on the western New York economy.

The Seneca Nation has been running a temporary facility in downtown Buffalo for more than a year. But the future of the Buffalo Creek Casino was placed in doubt when a federal judge said the site wasn't eligible for gaming.

The tribe acquired the land for the casino after the passage of the Indian Gaming Regulatory Act of 1988. The law, generally, bars gaming on newly acquired lands.

The tribe claimed an exception under Section 20 of IGRA that allows gaming on land acquired in connection with a land claim settlement. In 1990, Congress enacted the Seneca Nation Settlement Act, which appropriated money for the tribe to purchase new lands.

The National Indian Gaming Commission said the site qualified for an exception but Judge William M. Skretny disagreed. In July, he said the SNSA, despite its title, was not a true land claim settlement because it addressed tribal leases.

Despite the decision, the tribe refused to stop gaming at the casino even after the NIGC issued a notice of violation in early September. However, the tribe stopped all work on a $333 million, 90,000 square=foot permanent facility at the site only a month later.

The tribe cited the downturn in the national economy, rather than the court fight, as the reason for the suspension. Either way, the spring 2010 opening for the permanent facility will likely be put off for several months, along with 1,000 jobs and an annual payroll of $38 million.

Through the Seneca Gaming Corporation, the tribe employs more than 4,200 people at its casinos, including another off-reservation facility in Niagara Falls that also was acquired in connection with the SNSA. The legality of that site, however, is not at issue in the Buffalo case.

"Seneca Gaming Corporation has established itself as a dynamic and growing presence in the gaming industry and in the Western New York economy, and we expect that to continue," Brian Hansberry, the corporation's president and CEO, said earlier this month.

A group called Citizens Against Casino Gambling in Erie County, the lead plaintiff in the case, says the negatives of the project outweigh the benefits. Opponents link gambling to an increase in crime, addiction and other social ills.

The fight began in January 2006 when casino opponents sued after the NIGC approved the tribe's gaming ordinance. In January 2007, Skretny ruled that the agency failed to analyze the legality of the casino site.

After the NIGC re-examined at the issue and approved the gaming ordinance in July 2007, opponents filed the current suit. They are now seeking to have the NIGC held in contempt court, accusing the agency of failing to shut down the casino in response to Skretny's decisions.

If the 2nd Circuit Court of Appeals upholds Skretny, that doesn't necessarily mean the tribe will be shut out of Buffalo forever. The tribe could claim another Section 20 exception or go through a lengthy process that requires the state governor's approval for an off-reservation casino.

The tribe could also seek Congressional approval or clarification of the SNSA to ensure the casino site is legal. The appeals process could take up to a year to resolve.

Court Decision:
July 8, 2008 | August 26, 2008

Earlier Case:
Citizens Against Casino Gambling in Erie County v. Kempthorne (January 12, 2007)