CATTARAUGUS TERRITORY (WIVB) – It was a gut punch to Seneca Nation of Indians President Matthew Pagels.

The Seneca Nation had just released hundreds of millions of dollars in disputed casino revenue to New York State and other local governments. It was a battle which lasted for more than five years. And then, Governor Kathy Hochul announced the state’s $418 million dollar share would go toward the Bills stadium project.

“I think the strong-arm nature in which she used to get that money, to glorify the casino financing was probably the biggest gut punch,” Pagels said.

The Seneca Nation said days prior, New York State froze their accounts. The Seneca Nation Council then voted to transfer the long-disputed funds in a special meeting.

“You subpoenaed all of our operating accounts just so that you could receive the payment and the next day you’re going to announce that money is going toward the Bills stadium,” Pagels said. “That was the gut punch that – it didn’t need to happen that way.”

The backstory dates back to 2002, when the Seneca Nation and New York State entered into a gaming compact. When it renewed in 2016 for another seven years, the Seneca Nation argued it no longer had to issue revenue sharing payments to state and local governments. New York State argued it did.

An arbitration panel agreed with New York State. So did a federal judge and the U.S. Court of Appeals.

But the Seneca Nation still didn’t pay up until March 29, after it said New York State froze its accounts.

The issued seemed to be over two months earlier, in January, when New York State and the Seneca Nation came to a settlement agreement. But the state says the money never came. In a March 9 letter, the state demanded payment.

“(I)n the event that the Nation fails to honor its pledge, the state intends to immediately commence enforcement and collection efforts to the full extent of its legal rights to recover on the Judgement and recoup its cost,” a lawyer representing the state wrote.

In a statement, a spokesperson for Governor Hochul argued that she has worked to resolve this issue since she took office in August 2021.

“Time and time again, the Nation failed to fulfill their court-ordered obligations,” the spokesperson said. “After the Nation once again failed to make payments under the terms of an amicable agreement, the State had to take action to enforce the judgment, and we are pleased to have finally secured these long-overdue funds for Western New York communities.”

Despite the courts affirming the arbitration panel’s ruling in favor of the state, Pagels says the Seneca Nation refused to pay because it believed the panel’s decision was beyond the scope of the compact.

“The compact as a four-corners document is the agreement,” Pagels said. “What the arbitration panel decided was to add language to the compact that wasn’t there saying that you have to pay for the remaining seven years of exclusivity.”

The Seneca Nation appealed to the National Indian Gaming Commission, which Pagels says declined to get involved.

“Their inaction hurt the nation,” the president said.

The current gaming compact expires in December 2023. While the Seneca Nation said back in January that negotiations would begin, Pagels says that still hasn’t happened.

“Good faith negotiations need to happen now,” Pagels said.

“Time is of the essence,” he added.

Chris Horvatits is an award-winning reporter who joined the News 4 team in December 2017. See more of his work here.