BUFFALO, N.Y. -- A long-worked-upon sit-down between Gov. Andrew Cuomo and the Seneca Nation was scuttled amid allegations by the New York State Gaming Commission that employees were eavesdropped on by the Seneca Gaming Authority.

According to a source close to the Erie County District Attorney’s Office investigation, gaming officials last year found a listening device in a casino space that was leased to state officials.

The governor office says Cuomo is now no longer open to meeting with the Nation President Todd Gates about casino revenue, about $125 million annually, due to the state. The Seneca Nation made its last payment in March and believes it's no longer required under the compact with the state. Tribal leaders say a casino exclusivity zone in the compact still remains in effect until 2023.

The Cuomo administration is also threatening new competition in Niagara Falls, potentially in the form of a non-Seneca casino there.

Niagara Falls mayor Paul Dyster says anyone who followed the issue between the state and the Seneca Nation knew that this position could happen.

In a statement, he said: "We know that the governor has the best interests of Niagara Falls and its residents at heart, and we remain confident that when this matter is resolved that those interests will be taken care of. We remain hopeful that a negotiated settlement can be reached and remember that sometimes the darkest hour is just before the dawn."