What’s in a word?

Where I grew up, in Brooklyn, “gaming” was when you were hustling a sucker; “gambling” was when you were in a situation where you all had an equal chance, like shooting crap or playing poker or pitching pennies. I used to think that referring to casinos as “gaming” was a euphemism, but I’ve realized that it isn’t: Casinos always have the edge, always win in the long run, always control the odds. Dropping your money there is a sucker’s game, save for the people who run the joints, who are businesspeople, not gamblers. There is no gambling in a casino. You go there, you’re gamed.

More slots

A January 14, 2016, article by Matt Glynn in the Buffalo News—“Buffalo casino expansion driven by amenities”—leads off with a photograph of 14 men and women in red hard hats standing around a pile of dirt. Six of them hold gold-looking spades. None is identified. The only reason they are wearing the red hard hats is the photograph: They are outside; no construction is going on around or above them; the only thing that might fall on them is a bird turd. Only one of the spade-holders looks at the camera, Buffalo Mayor Byron Brown. 

A press release from the Seneca Nation of Indians the same day announces a $40 million expansion to the Seneca Buffalo Creek Casino. It is due for completion spring 2017. It will, the press release says, add 28,500 square feet on each of two levels, 300 more slot machines (808 are already in place), more table games (20 are there now), and a new large restaurant with banquet and meeting space. The casino currently employs 550 people; the expansion will add 300 more. 

“The new amenities,” wrote Glynn, “will include a new Western Door concept restaurant, and a performance stage for live entertainment at Stixx Sports Bar.” 

“Amenities” is such a sweet word. The Buffalo News article reads like a press release, which it is.

How the Seneca Buffalo Creek Casino got here

The gambling casino the Seneca Nation of Indians operates in downtown Buffalo is a direct consequence of the September 11, 2001 attack by Al Qaeda on the World Trade Center in Manhattan. 

Wall Street provides about 16 percent of New York State’s tax revenue. Other than the disaster years of 2007 and 2008, when Wall Street operated at a loss (occasioned entirely by Wall Street hanky-panky and more than compensated for by a government bail-out and huge profits in 2009), the lowest year in the past two decades for Wall Street money flowing into Albany was 2002, the year following the attack. 

New York Governor George Pataki was desperate for income sources to replace the then-moribund Wall Street money flow. So he cut a deal with the Seneca Nation of Indians (SNI): They could operate three casinos in upstate New York; New York would give them exclusive casino privileges; and they, in turn, would give the State of New York a slice of the take from slot machines. 

Pataki couldn’t cut that deal with a private developer because Article I of the New York Constitution prohibits full casino gambling on New York land. The New York Constitution doesn’t apply, however, to Indian land. The 2002 Gaming Compact gave the Senecas permission to run casinos on the Salamanca Reservation, on the site of the Niagara Falls convention center, and on a third at a site to be determined in Buffalo. 

In October 2005, SNI purchased a 9.5-acre parcel of land in downtown Buffalo and prepared to set up a gambling operation there. In 2006, Buffalo Mayor Byron Brown and the Buffalo Common Council sold SNI a two-block section of Fulton Street for $631,000. That street, which belonged to the citizens of Buffalo, bisected the 9.5-acre parcel. The sale meant the SNI owned it all.

A slots-only casino opened in a big shed on the site in 2007, then expanded to include table games. That expansion cost $130 million. There were plans to build a grand hotel/gambling complex, and a huge steel frame went up (which required destruction of one of Buffalo’s great architectural structures, the H-O grain elevator). But litigation stalled construction and the steel frame was eventually torn down because it had deteriorated so much it was no longer viable. A parking garage now occupies the space where the grand hotel/casino was to have been built.

That garage holds 715 vehicles; surface parking has space for 370 more. 

Accounting

The three Seneca gambling operations, according to the SNI web site, have “generated more than $475 million for state and local governments.” That covers a decade. In state terms, it is not very much money. The SNI has gathered a great deal more.

There is no tally of how much those casinos have cost New York. 

Few out-of-state license plates go in and out of the Buffalo casino’s parking lots. It is not a destination casino, like those in Las Vegas. The clientele is, mostly, local and low-income. 

The jobs the casino provides are, with few exceptions, jobs shifted from one venue to another. If the new casino has banquet and meeting facilities, they won’t be new, out-of-town banqueters and meeting-goers; they will be people who would otherwise have been doing the same thing at facilities that pay sales and real estate taxes (which the casino doesn’t do) and operate in terms of New York State’s health and safety laws (which the casino doesn’t do), and where someone mistreated can seek reparations in New York courts (which someone mistreated in the SNI casino cannot do). 

The casino, critics say, indeed provides “amenities” and jobs, but they all come at the cost of amenities and jobs elsewhere in the community. It is just moving pieces around, only subtracting the taxes and protections that help the community survive. Most of the real new jobs are in construction, but they are transitory, existing only for the time the new facility is being built.

SNI gambling officials point out they buy a lot of stuff locally—floorwax, window cleaner, glassware, paper towels—which is true. So would the places they are displacing because of their huge fiscal advantage resulting from their being out of the tax structure. The playing field isn’t close to level. 

Sam Magavern, co-director of Partnership for the Public Good, in a recent email responding to a Buffalo News request for his comments on the expansion press release, wrote:

The expansion of the casino is bad news for Buffalo’s growth and prosperity. Casinos, especially those located in high poverty urban areas, create more costs than benefits for the communities that surround them. For a large number of patrons, gambling becomes an addiction that too often leads to mental illness, bankruptcy, or crime…Disturbingly, research shows that living close to a casino dramatically increases your chances of becoming a problem gambler, as does being less educated, lower income, or a member of a racial/ethnic minority. The location of the Buffalo casino, near some of the poorest neighborhoods in one of the nation’s poorest cities, is particularly unfortunate. However much it expands, the Buffalo casino is going to draw mostly from local residents, especially given the rapid growth of gambling opportunities around the state and region. Proponents of casinos often claim that they create jobs. Careful research and analysis, however, proves that they destroy more jobs than they create. Casinos do not produce a useful product or service. Every dollar spent at a casino is a dollar that would otherwise have been spent at another business — at a restaurant, sporting event, or theater, or perhaps to make a house or car payment. Because slot machine gambling is highly mechanized, it produces fewer jobs than the businesses it displaces.

One thing more: Customers in the casinos can smoke and buy cigarettes. Dealing with lung cancer costs the state a huge amount of money. And causes families a huge amount of agony.

Litigation

Opponents of a casino in downtown Buffalo have been in federal court since shortly after the SNI bought the Buffalo parcel in 2005. 

The litigation has hinged on two Federal laws: the Seneca Nation Settlement Act (SNSA) of 1990 and the Indian Gaming Regulation Act (IGRA) of 1988. SNSA gave the Senecas reparations for a century of being short-changed by people with leases on their land, 65 miles south of Buffalo. Nothing in SNSA says anything about transfer of sovereignty or gambling. IGRA said how, where and when Indians could run legal gambling operations on Indian land; it says nothing about taking sovereignty away from the states unilaterally. 

On September 15, 2015, the Second Circuit Court of Appeals ruled that the SNSA gave the Department of the Interior authority to determine whether a Seneca property purchase converted that property from New York State land into Indian land, from property on which casino gambling could not occur into property on which it could occur. The Second Circuit said that Interior’s failure to act on that issue made the Buffalo parcel Indian land, hence gambling land. 

There is now a petition for certiorari in the Supreme Court—a petition asking the court to hear a case—on the Buffalo casino issue. 

Opponents argue that a federal agency cannot usurp state sovereignty, and that Congressional intent in SNSA was not to allow any Seneca purchase anywhere to remove the land in that purchase from state sovereignty. Changing sovereignty, they point out, requires not only a specific act of Congress, but specific consent of the state. New York State never relinquished sovereignty over that parcel in downtown Buffalo. It could not do that unilaterally. (And, by extension, neither could the city of Buffalo relinquish state sovereignty over those two blocks of Fulton Street.)

The basic question is, was it Congress’s intent in the Seneca Nation Settlement Act to allow the SNI to purchase land anywhere and have that land become part of the land outside of New York and its laws? 

If the answer is yes, the SNI could buy land in Syracuse, Rochester, or Albany, and it would not be subject to New York taxes or laws. 

It is hard to imagine that that was the intent of Congress, and one of the members of Congress who wrote that legislation expressly insists it was not.

Does tribal ownership of the land equate with tribal jurisdiction over the land? If yes, they can run a gambling operation there; if no, they cannot. Just as I own my house, but I can still be arrested in it if I’m doing something illegal under state law and I have to pay taxes on a business I might run out of that house. 

Much of the Second Circuit opinion seems driven by the Robert Moses theory of power: “If I can get a shovel in the ground, I’ve got them.” It refers to the SNI having its own marshals on the property and posting signs saying the property is SNI territory. So what? They are there, but if they shouldn’t be there, then they shouldn’t be there. And having your own armed guards on your property doesn’t mean you have sovereignty on that property; it means only that you have armed guards. Some corporations have armed guards who wear uniforms;, so do some universities and hospitals.

The presence of armed guards and signs on the Senecas’ Buffalo parcel surely don’t make what occurs on that property beyond the law. It is like you posting a sign in front of your house saying, “It is legal to sell opium on this property,” and you hiring a guard to keep intruders out. You did that, but so what? The cops are going to visit.

The Second Circuit opinion seems to say that since Congress did not specify in SNSA anything about gambling, gambling is therefore legal on land purchased by SNI. That makes sense only if you ignore the 10th Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” New York did not assign that territory to the US government sovereignty, to be then assigned to SNI. The legislature cannot unilaterally do that. Congress cannot unilaterally do that. A bill compensating a tribe for having been screwed on rent does not undo state sovereignty.

Something like 10 percent of certiorari petitions are accepted. If this petition isn’t accepted, the Buffalo casino lawsuit is dead, unless the opponents come up with another theory. If certiorari is granted, the entire issue goes before the Supreme Court, at which point it is anybody’s game.

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Bruce Jackson is SUNY Distinguished Professor and James Agee Professor of American Culture at UB. He is also affiliate professor of law in the UB Law School.