Seneca Nation to Withhold NYS Casino Payments

August 30, 2010 Updated Aug 31, 2010 at 12:15 PM EDT

By John Borsa

August 30, 2010 Updated Aug 31, 2010 at 12:15 PM EDT

BUFFALO, NY (WKBW) - The Seneca Nation of Indians will withhold future revenue-sharing payments to New York State from its three Western New York casinos, Tribal Council members voted on Monday.

J.C. Seneca, co-chair of the Tribal Council, claims the state has violated the terms of the 2001 Gaming Compact between the tribe and the state.

"[The state] has authorized casino-like operations in Hamburg, Batavia and the Finger Lakes," in violation of the compact's exclusivity agreement, Seneca said.

"The action the Council took tonight reflects our concern over several activities that seem to mirror our Class III facilities," he added in a statement.

When asked if the timing of the Council's decision has anything to do with Albany's efforts to collect sales tax on cigarettes sold by Indian retailers to non-Natives, Seneca said, " Timing is everything."

The Council's decision to withhold the state's share of slot machine revenue comes just hours after a judge declined to block the state from collecting the cigarette sales tax beginning September 1.

"The days are certainly running out," Seneca told Eyewitness News earlier on Monday.

The Seneca Nation has another chance to block the state from collecting the tax when a federal ruling by U.S. District Court Judge Richard Arcara is released on Tuesday.