The Seneca tribe in western New York has built a $1.1 billion business in less than seven years thanks to three popular casinos and their amenities, but that hasn’t been enough to prevent the mothballing of a planned fourth.
With the troubled state and national economy, New York is considering taxing cigarettes sold by the currently exempt tribe – a potential $400 million per year revenue stream. The nation has also generated income selling tax-free gasoline.
So far, the Senecas have persuaded two governors to back off plans to collect taxes from the 7,300-member nation, but a federal legal challenge to the tribe’s existing casino in Buffalo and pressure from anti-gambling forces are tripping up plans for a $333 million expansion.
The Senecas have commissioned a poll and two multi-city print and broadcast advertising campaigns intended to shore up public support against proposed tax legislation that would prohibit manufacturers from selling tobacco products in the tribe’s smokeshops without a state tax stamp.
The potential tax burden is not the Senecas’ only problem.
The nation halted construction in August of a permanent casino in Buffalo, citing “challenging economic and capital market conditions.” A steel frame marks the site of the Buffalo Creek Casino, once promised as one of the largest private projects ever undertaken in the upstate city.
Work was also halted at an existing casino in Salamanca, where a $130 million expansion was under way.
“You tell me when the economy is going to change around and I’ll tell you when we’re going to start building again,” Seneca President Barry Snyder said. “I don’t think anybody can tell us that.”
The temporary Buffalo casino – conditionally open pending construction of the permanent venue – is also threatened by a federal lawsuit filed by Citizens Against Casino Gambling in Erie County.
In the meantime, declining revenues have forced 210 layoffs at the three Seneca casinos, imposed a wage freeze on employees making $70,000 a year or more, suspended year-end bonuses and cut senior managers’ pay by 5 percent to 15 percent.