An arbitration panel that will be chaired by the former chief judge of the state Court of Appeals will begin work early next month to determine whether New York State has violated the Seneca Nation’s exclusive rights to casino gaming in Western New York under their 2002 compact.

The three-person panel will include former Chief Judge Judith Kaye, University of Arkansas Law School Dean and Professor of Law Stacy Leeds, and Henry Gutman of the law firm Simpson Thacher.

Under the 2002 compact between the Seneca Nation and New York State, the Nation was granted gaming exclusivity in Western New York.  In exchange the state received 25 percent of the monies played on slot machines and other gaming devices offered at the Nation’s casinos. A portion of the state’s share was provided to the host communities – Niagara Falls, Buffalo and Salamanca.

The Seneca Nation claims that the state has breached its promise of gaming exclusivity by allowing gaming devices to be operated within its exclusivity zone.  These include “Moxie Mania,” which was played in area bars, and thousands of video lottery terminals (VLTs) at Hamburg Casino, Batavia Downs and Finger Lakes Casino & Race Track.

The Seneca Nation has placed into escrow $460 million that would otherwise be due to the state pending resolution of the dispute.