Slow jurisprudence, permanent gambling

The latest Securities and Exchange Commission filings by the Seneca Gaming Corporation are almost three years old. They contain details of a remarkably profitable set of operations—one in Niagara Falls, one just outside Allegany State Park, and one in Buffalo, which holds 457 slot machines and a snack bar in a little blue building next to the Perry Projects and the Malamute Bar just east of where the Buffalo Sabres one day may once again play a post-season game.

The Buffalo casino, which new Buffalo School Board member Carl Paladino lobbied heavily for until it dawned on him that the Senecas weren’t going to allow him to partner on any affiliated development, will soon grow much larger because of a recent decision by a Federal District Court judge who just a few years ago held that this particular casino was illegal and should close.

Judge William Skretny ruled, on July 8, 2008, that the federal agency responsible for regulating Native American casinos had made a determination that was “arbitrary, capricious, and not in accordance with the law” when the agency let the Senecas go forth with gambling on the Buffalo land they’d purchased from Carl Paladino.

The judge subsequently instructed the Bush Administration to close the casino “forthwith,” a somewhat antique English locution meant to convey urgency, speed, quickness, and such.The Bush Administration didn’t close the casino. The gambling continued. On the very last day the Bush Administration was in office, just hours before Barack Obama took the Presidential Oath of Office, Bush’s appointees made an administrative determination that has been litigated twice, ruled on by Skretny twice (and quite differently), and which is now being appealed to a higher court than Skretny’s. All along, the Bush Administration’s policy has been in force: notwithstanding a very straightforward rule that has been applied everywhere else in the United States since 1989, a rule that land acquired after that year could not be used by a Native American group to operate an off-reservation casino, the Bush Administration allowed the Seneca Gaming Corporation to go ahead with operating a gambling casino.

Old land, new land

The surprise finding in Judge Skretny’s first decision was that the land in Buffalo was “Indian country” at all. The norm in Indian Land Claims cases for the past 70 years has been that the people who claim or acquire a piece of land have some historic claim to it. The Senecas had asserted such a claim to Buffalo-area land as recently as the 1990s, but their claim had been rejected by another federal judge—in part because of a big document or exhibit of “stipulated” or undisputed facts.

It’s not that there weren’t any native Americans here. The non-Seneca Iroquoian-speaking Erie people, whom the French called nation du chat (cougar nation), had lived here until their conquest by the Senecas in 1651; those events are described in the Jesuit Relations, the annual reports home by the French priests who were the only Europeans in the area. The Senecas’ home territory was in the Genesee Valley, and eastward to Seneca Lake, until the cataclysm we know as the Revolutionary War. The colonists won; the British and their allies, including the Six Nations confederacy that included the Senecas, were forced to retreat, and to formally cede territory in treaties. The fact of that long-ago conquest of the United Kingdom had immediate relevance in the land-claims case brought by the Senecas for some Niagara River islands, including Grand Island -- a case that was decided in 2002 by Federal District Court Judge Richard Arcara, who sits in the same Federal District Court as William Skretny on Niagara Square in Buffalo. Arcara’s ruling, upheld on appeal, was that the lands in Western New York weren’t aboriginal territory of the Senecas.

But of course, things here in the post-Revolutionary War era were complicated. From the time of Colonel Sullivan’s expedition against the Six Nations in 1779, and the Pickering and Jay Treaties in the 1790s (the British didn’t even turn over Fort Niagara to the United States until 1794), the Senecas and others of the Six Nations were first driven from their old lands, and then settled on a brand-new 49,920-acre reservation at Buffalo Creek and two other major reservations, on Cattaraugus Creek and on the Allegany River. That lasted until 1842, when the Senecas agreed to dissolve the Buffalo Creek Reservation, keeping Cattaraugus, Allegany, and an uninhabited one-square mile tract near Cuba Lake under the rule of a brand-new governance structure called the Seneca Nation of Indians, with the Tonawanda band of Senecas remaining part of the old Six Nations system.

Not until Carl Paladino sold the Seneca Nation of Indians a 9-acre parcel in October, 2005, had any Seneca group had a formal presence in the place that had been their reservation between 1794 and 1842. The question for Judge Skretny in 2008 was whether this non-aboriginal land, this land that was not anywhere near the Cattaraugus, Allegany, or Oil Spring reservations, and that is even farther from the Genesee River that everybody acknowledges is the Seneca homeland, had the same status as those sites, or whether it was ineligible for use as a place for a casino.

The group filing the lawsuit against the Bush Administration, Citizens Against Gambling in Erie County, plus its initial co-plaintiff Erie County government, argued that the federal law was crystal-clear: any land bought by a Native American group after 1989, even if that land were purchased with the proceeds of a land-claims settlement case, couldn’t be used for gambling. (Curiously, nobody sued, however, on whether the Senecas could keep their off-reservation land in Niagara Falls, where the Seneca Niagara casino-hotel-entertainment complex had been operating in what had been the publically-owned Niagara Falls Convention Center.)

After all the history, all the complexity, and all the litigation, the simple question was this: was the Buffalo 9 acres Indian land? Judge Skretny in 2008 said yes. That should have been answer enough, but there was a critical second question: Can the Seneca Gaming Corporation then operate a casino there, just like hundreds of Native Americans who self-describe as bands, tribes, and also as nations do all across the United States since the Indian Gaming Regulatory Act was passed in 1989? Judge Skretny said No, at first, but both the Bush Administration, and then the Obama Administration, essentially ignored him. And as Judge Skretny didn’t ask for federal marshalls to come in and enforce his July 2008 decision, the Senecas continued to run their gambling operation.

And now, with the Governor of the State of New York having made an agreement with the Presiident of the Seneca Nation of Indians about the Senecas’ revenue-sharing in return for their exclusive right to operate gambling casinos west of the Genesee River, the issue would seem to be settled—again. Unless Judge Skretny’s most fundamental finding is overturned, that being that the 9 acres is Indian Land that is regulated by the Federal government that has decided it’s fit for casino gambling, then it’s going to be used for casino gambling, just as it has been for the past 6 years.

The cost. The benefit?

The latest press release from the Seneca Gaming Corporation about the Buffalo casino couldn’t be more celebratory. At a job fair held last week in Niagara Falls, more than 300 new jobs were advertised, including a couple of dozen for the newly-expanded “Buffalo Creek” casino which is slated to open “later this summer.” The new Buffalo casino will feature “808 slot machines, 18 table games, a new central meeting place called Stixx Sports Bar and two restaurants.” In all, Seneca Gaming Corporation will employ 3,700 by the end of 2013, running 6,500 slot machines in its three locales, and selling meals, hotel rooms, entertainment, and now, too, with its Hickory Stick golf resort in Niagara County, a seasonal outdoor attraction, too.

Economists have long known that gambling has been a part of the “unofficial” economy of every metro area in the United States. In the 1960s, state governments started moving into the gambling business formerly run by the Mob, in its various iterations, when states created legal lotteries to replace the old “numbers game.” First Las Vegas, then Atlantic City, moved into the casino business. Then Native Americans got into the business. According to Alan Meister’s annual “Casino City’s Indian Gaming Indutsry Report.” Indian-owned casino revenue grew to $27.4 billion in 2011, and non-gaming Indian casino-resort revenue grew to $3.3 billion, putting the 242 tribes that run these 460 separate gambling sites slightly ahead of where they were before the global financial collapse of 2008.

In a $16 trillion national economy, $30 billion is not a big deal. In the Buffalo-Niagara Falls metro area’s $46 billion economy, the $500 million or so in Seneca casino operatiions would not seem to be a big deal. But it actually is. According to the Bureau of Economic Analysis, which collects numbers on who earns what from which industry, the 3,700 employees of the Seneca Gaming Corporation work for an enterprise that is a large and growing part of the entertainment industry in the area. Total wages and salaries paid by all the sports teams, theaters, museums, and “amusements” in Erie County in 2011 amounted to about $440 million. The “accommodations” industry paid out over $800 million in wages and salaries. The food and beverage industry paid out another $1billion.

As the Seneca Gaming Corporation entertainment, food, beverage, and potentially even the “accommodation” product grows in Buffalo with the growth of the Buffalo Creek casino from a blue warehouse to a huge operation paralleling the Niagara Falls and Salamanca sites, expect the same impact as in those places, to wit: more reduced-price and tax-exempt entertainment and meals competing with taxable, full-price entertainment, food, and drink. Niagara University Professor Steve Siegel found in a 2010 analysis of the Seneca Niagara Casino’s practices that over $42 million in free and reduced-price meals and entertainment essentially wiped out any competitive opportunity for market-rate restaurants in Niagara Falls. The Seneca Gaming Corporation’s tax-exempt status and other advantages “pose a formidable threat to any and all other hospitality operations” in the area.

Judge Skretny’s most recent ruling has been appealed. There is, of course, no guarantee that even if the appeal succeeds, the Obama Administration will act any differently toward the Buffalo casino than the Bush Administration did. Buffalo should expect that the impact of the expanded Buffalo casino on the downtown hospitality industry will be similar to that of the Seneca Niagara casino’s impact on the downtown hospitality industry in Niagara Falls, unless the Buffalo casino complex does not grow to include a hotel. At the moment, Carl Paladino’s proposed waterfront hotel, like the new crop of hotel rooms just on the market in the Lafayette, Tishman, Statler, Avant, and other refurbished buildings, won’t face competition from the tax-exempt Seneca Gaming Corporation. But then, according to Judge Skretny, the 9-acre parcel Paladino sold them can be used for anything the Senecas want, perhaps even if Skretny’s finding is overturned.

Bruce Fisher is a former deputy executive for Erie County and director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.