Please ensure Javascript is enabled for purposes of website accessibility
Home / Business / Mohawks stop sharing casino revenue with state

Mohawks stop sharing casino revenue with state

ALBANY — The St. Regis Mohawk Tribal Council has stopped sharing revenue from the casino along New York’s northern border with the state, claiming the exclusivity provision of its gambling compact has been violated.

Tribal Chief Mark Garrow said the second-quarter check for about $4.9 million has not been sent. He declined to specify what state officials did against the Mohawks’ seven-county exclusive rights to install and operate slot machines.

Garrow said the move isn’t related to Gov. David Paterson’s administration attempts to tax lucrative tribal cigarette sales to non-Indians and isn’t coordinated with the Seneca tribe’s withholding more than $200 million from its three casinos in western New York. The Mohawks’ letter to the administration was sent last week, he said.

“While the state has yet to comprehensively review the reasoning behind the suggestion that we have violated the gaming compact, one thing is very clear: The St. Regis Mohawks failure to pay the state is an egregious material breach of the gaming compact,” said Morgan Hook, spokesman for Paterson. “The state will now seek all remedies available under the compact including expedited arbitration in order to protect the state and local municipalities from losing this critical funding.”

The administration two weeks ago threatened to end the compact that allows the Seneca Indian Nation to operate three casinos in western New York because of withheld revenue sharing payments. Counsel Peter Kiernan said in a letter that the Senecas owed the state and local governments about $105.5 million from 2009 and $109 million for 2010.

That letter to Seneca President Barry Snyder Sr. requested a meeting within 14 days to negotiate a solution, threatening to otherwise start arbitration and seek a finding that the Senecas breached the compact.

Snyder responded that the state violated their 2002 gambling agreement for the past two years by allowing a video game called “Moxie Mania” at upstate New York bars and introducing slot machines at racetracks. He also proposed the Senecas directly pay the local governments their share, but Kiernan said the compact requires payments come directly to the state.

Seneca and administration representatives negotiated Tuesday and agreed to keep talking, Hook said. “We are confident that the differences … can be resolved.”

State Budget Division spokesman Eric Kriss said projected revenues from the Mohawk casino this year are about $12 million. The last check from the Senecas was for $55.5 million for 2008, he said.

“We are not in coordination with the Senecas,” Garrow said.

The Akwesasne casino has about 1,600 slot machines, and the casino is profitable regardless of the revenue sharing, Garrow said. “We have not sent a check to the state because the compact has been violated,” he said.

According to the tribe, its 2004 compact amendment approving slots at the casino obligated the state to ensure it has exclusive rights in Clinton, Essex, Franklin, Hamilton, Jefferson, St. Lawrence and Warren counties.

Garrow declined to identify any other slot machines operating or contemplated by anyone else in the region. “I think that discussion we’re going to save until we have a discussion with New York state,” he said.

Tribal Chief Monica Jacobs said the Mohawk council made its decision after talking to the community at their monthly tribal meeting.

The Mohawks, Senecas and Oneidas have pending federal lawsuits against the Paterson administration’s attempt to start collecting the $4.35 per pack tax on Indian cigarette sales to outsiders. The tribes claim it violates their sovereignty. The cigarette trade, in small stores and online, is also worth millions of dollars a year to them with the no-tax advantage over other retailers.

Last week the Oneidas won a temporary injunction from U.S. District Judge David Hurd against the state tax plan.

The Oneidas don’t share revenues from their central New York casino under an earlier compact with the state, though they do reimburse New York for state police and Racing and Wagering Board officials at Turning Stone Casino.