Jun 24, 2001 7:50 PM

An agreement between New York Gov. George Pataki and the Seneca Indian Nation to build two casinos in Buffalo and Niagara Falls, and possibly a third, is being challenged with threats of a lawsuit by a group once affiliated with Donald Trump.

The New York Institute for Law and Society says Pataki’s agreement violates the state Constitution, which bars slot machines in New York, according to a Reuters report. The group also says the agreement violates the 1988 U.S. Indian Gaming Regulatory Act.

The institute played a prominent role in winning a state Supreme Court ruling earlier this year stating that Pataki cannot negotiate federally mandated gaming compacts with Indian tribes without the Legislature’s approval. That ruling has left a proposed $500 million casino in the Catskills in limbo.

At one time, the group received as much as $1 million in funding from Trump, its chairman, Thomas Hunter, told Reuters.

Trump has long opposed casinos in New York in an effort to protect his Atlantic City casinos from competition. His prior support for the institute netted him a $250,000 fine last year for not disclosing contributions to the group.

The state Senate has already signed off on the Seneca proposal, agreeing with Pataki that the casinos would be an economic development tool for the depressed northwest region of the state, promoting jobs and investment similar to the two casinos operating in neighboring Niagara Falls, Ontario.

Pataki has also been amenable to tribal casinos as a way to settle outstanding Indian land claims against the state.