Oneida Nation Threatens New York with Suspension of Payments over Mobile Sports Gambling

The Oneida Nation has just raised the height of the hurdle New York State lawmakers must jump in order to introduce mobile sports gambling. It was already an inevitability that native Indian tribes with virtually exclusive gaming compacts in the state would make it difficult for New Yorkers to have access to virtual sportsbooks, but the Empire State is now looking at the possibility of a drawn-out legal battle with the tribe if a mutually equitable resolution isn’t found. The Oneida Nation has threatened to suspend its annual payments to New York if the state tries to circumvent its gaming exclusivity, which could cost the state $70 million each year.

New York’s Difficult Road to Mobile Sportsbooks

New York was already facing the difficult task of trying to find a way to appease tribes in the state in order to introduce mobile sportsbooks, but the new threat takes it to a different level. The tribe is arguing that its gaming compact gives it exclusivity to all gaming activity in its area of control and warns that, should New York decide to allow online sports gambling in its back yard, the $70 million it gives to state and local governments each year will disappear. The Oneida Nation covers a 10-county region that extends throughout the central part of the state.

Under the most recently-discussed mobile sports gambling legislation, the physical servers for online sportsbooks would be hosted at the four commercial casinos in Upstate New York, all of which operate outside the areas controlled by in-state tribes. However, blanket coverage across the Empire State has been suggested, which would include those areas where the Oneida, the Seneca and the Akwesasne Mohawks have exclusive gaming compacts.

New York in Potential Violation of Agreements

The Oneida tribe asserts that any attempt to introduce gaming of any type into its area of control would be a violation of an agreement that has been in place since 2013. Since then, the tribe has given the state 25% of the revenue it earns on slot machines at its casinos and, in return, has exclusive rights to all gaming activity in its region, including sports gambling. Oneida County Executive Anthony Picente has voiced his support for the tribe, saying on Twitter, “The proposed breach of one of the most historic settlement agreements in New York’s history would result in huge tax increases & the destruction of 1000s of full-time jobs in #OneidaCounty. NYS needs to honor the 2013 settlement in its negotiations on online sports betting.”

The Oneida Nation has extended an olive branch to the state and is offering what should be viewed as a common-sense and fast resolution. If New York is set on using the upstate casinos as the hub for mobile sportsbooks, then the tribe wants to have a dedicated server there to be used for its online sports gambling operations. However, that offer has apparently still not been given enough support by state lawmakers or Governor Andrew Cuomo.

Precedent Already Set on Payment Suspension

This isn’t the first time New York and an in-state tribe have been at odds over gaming payments. The Seneca Nation began withholding payments in 2017 after it decided that the existing gaming compact was unclear over how much was due. Although the state ultimately won the battle and the Seneca Nation was ordered to pay $255 million two years later, it showed how easily a tribe can pull back on its agreement and how difficult it is for the state to find a resolution. If New York is intent on introducing mobile sports gambling quickly and painlessly, meeting the Oneida Nation’s request is the easiest path to an equitable compromise.