Laurel Track Woes: Passero To Consult, Pimlico Move On Hold For Now

The Maryland Thoroughbred Horsemen's Association (MTHA) and the management team at 1/ST Racing announced an agreement Tuesday morning that will allow for the MTHA's preferred track maintenance consultant, John Passero, to be retained to perform testing that will hopefully lead to the latest round of fixes in a years-long series of safety woes that have plagued Laurel Park's main dirt track.

The agreement, which was announced at an emergency meeting of the Maryland Racing Commission (MRC) Apr. 25, put off for the time being any action by the commission that would have mandated shifting racing to Pimlico Race Course some 30 miles north in Baltimore. 1/ST Racing owns both tracks under the corporate name Maryland Jockey Club (MJC).

Five horses have had to be euthanized this month at Laurel, including two who raced there Apr. 20. After last Thursday's fatalities, 1/ST Racing initially announced that racing would be canceled indefinitely, then later tried to fill an Apr.27 card that was abandoned when horsemen withheld entries. Management has maintained that the track is safe, while the horsemen have disagreed, at one point calling the situation a “catastrophic emergency.”

Passero used to be the MJC's track superintendent several decades ago, and the horsemen had lobbied for his inclusion as a consultant during the winter of 2021-22, which was when the last significant spate of equine deaths occurred over the Laurel dirt.

At that time, a Maryland racing commissioner described Passero during a public meeting as having the confidence of “rank-and-file horsemen” while noting that Passero felt “frustrated” when his input as a consultant “was not being heeded” by track executives.

Both in the past and for the present problems, 1/ST Racing has relied upon its own consultants, most notably Dennis Moore, known for his longtime track superintendent work at Santa Anita Park, another track in 1/ST Racing's corporate portfolio.

Craig Fravel, 1/ST Racing's chief executive officer, told commissioners during Tuesday's meeting that the negotiations with horsemen yielded “basically an access agreement for the MTHA to retain their consultant, John Passero, to come to the racetrack to perform whatever tests [and] evaluations [that] he feels are necessary to inform himself and his client [that could lead to] possible improvements to the racing surface.”

Fravel noted that Passero will be employed by the MTHA, and that the exact scope of his work is not defined by the agreement. Whatever data Passero uncovers will then be analyzed by track management, the horsemen, and the commission to determine the next steps.

Tim Keefe, the president of the MTHA, said he expected Passero to begin work as soon as Wednesday, Apr. 26.

Alan Foreman, an attorney who represents the MTHA, said, “We'll collectively assess his findings. Any work that needs to be done, our hope is that it is a relatively quick fix, and that we will be back to racing as quickly as possible.”

Fravel was asked directly by a commissioner about the possibility of relocating the current Laurel meet to Pimlico, which is scheduled to race May 11-29 for its GI Preakness S. meet.

“We're going to approach all of these questions in good faith,” Fravel said. “We're not taking anything off the table, but we need to let this process unfold,” before having discussions about moving to Pimlico.

MRC chairman Michael Algeo made it clear that the commission's top priority is safety.

“Racing will not resume here until this commission says it can resume,” Algeo said. “This is uncharted territory for the commission. This was not a hearing that we anticipated. It's not a hearing that we wanted. But I have emphasized throughout my time as chairman and member of this commission that we needed cooperation, communication and compromise.

“We cannot afford to get this wrong. We have to get it right,” Algeo underscored.

Algeo noted that the MRC has a regularly scheduled monthly meeting for next Tuesday, May 2, at which it could take next steps, unless sooner action is warranted. Although his tone was generally terse, Algeo added that he was “optimistic” the testing and the fixes could proceed as swiftly as possible.

Pimlico hosted an extended meet through the summer of 2021 the last time Laurel's track needed extensive repairs.

After years of freeze/thaw and drainage troubles, Laurel's main track was in such bad shape in the spring of 2021 that Laurel ceased racing on it Apr. 11, 2021, to begin an emergency rebuild from the base up. The project was repeatedly delayed and had its scope expanded, and it ended up taking five months before racing could resume instead of the initially projected one month.

When racing resumed in September 2021, the main track had no apparent safety issues. But the onset of cold weather revealed problems with seams in the base of the homestretch, then the cushion atop that layer needed substantial reworking to give it more body and depth.

Eight horses died from fractures while racing or training over Laurel's main track between Oct. 3 and Nov. 28, 2021, leading to weeks-long halts in racing through early the winter of 2022.

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Greg Means: An Appreciation

Greg Means died suddenly two weeks ago at the age of 62. If his name doesn't ring a bell, it should. For over two decades working with the National Thoroughbred Racing Association (NTRA), Greg and his firm the Alpine Group were our principal lobbyists in Washington. It was Greg's responsibility to promote and advocate for the economic health and well-being of our industry during very challenging times as competition from other forms of gaming grew and animal rights advocates questioned our relevance and very existence. He was a great advocate who was both influential and respected on Capitol Hill. I know. As a 20-plus year member of the NTRA Board of Directors, I was fortunate to have a front row seat and work with Greg as the NTRA grew its footprint in Washington, D.C. in support of the Thoroughbred industry. While the NTRA has been criticized for many things, its work on behalf of the industry on Capitol Hill has not been one of them. Much of the NTRA's success in the area of federal legislative advocacy can be traced to Greg and his firm.

Greg was a rare individual. He was not your typical silk-stocking lobbyist. He was different. Unabashedly blunt, with a southern drawl and downhome personality rooted in his small-town Arkansas upbringing, he was equally effective in the offices of some of the most powerful and influential lawmakers in the land or speaking before a small gathering of industry stakeholders worried about the future of Thoroughbred racing.

What distinguished Greg, and made for effective advocacy, was his own lifetime love of horseracing and betting, which began at his spiritual home, Oaklawn Park, long before he arrived in D.C. He was an informed, passionate and convincing advocate as a result of those early experiences. When he explained how the tax code worked against horseplayers, the Hill staff got it because he lived it and loved it. The Board of the Thoroughbred Horsemen's Association (THA), which I chair, loved his briefings. We learned as much about the current state of American politics as we did the intricacies of legislation or issues that he was promoting or deflecting.

Over the course of his career representing our industry, Greg kept a relatively low profile. Nonetheless, his impact on our business was enormous. Whether you are a breeder, owner, trainer, racetrack operator, bloodstock agent, jockey, sales company representative or horseplayer, Greg helped you by improving the business of racing and breeding Thoroughbreds.

Greg and the Alpine Group were first retained to help the NTRA establish relationships with key lawmakers and committees on Capitol Hill–those who could dramatically impact the entire industry with one vote or the stroke of a pen. Almost overnight, he helped form Horse PAC, which quickly became one of the racing and gaming industry's largest and most influential political action committees. By helping us handicap hundreds of Congressional races over 20 years, Greg's astute choices enabled the industry to build a core roster of Congressional allies, many of whom have supported our legislation over that entire time span.

In 2004, Greg helped us devise a strategy to secure passage of legislation to eliminate a 30% withholding tax on winnings by foreign nationals wagering into U.S. pools–something of vital importance to the Breeders' Cup and others pursuing an international wagering market.

In 2006, with internet wagering under assault by the Department of Justice (DOJ) and various lawmakers, Greg almost singlehandedly saved the industry ADW sites from being criminalized by the Unlawful Internet Gambling Enforcement Act (UIGEA) by negotiating a carveout for state regulated pari-mutuel wagering. The carveout preserved the status quo under which ADW sites were operating legally at the time.

In 2008, Greg led the charge to secure passage of the Equine Equity Act (EEA), part of the broader Farm Bill, that allowed for accelerated depreciation of racehorses from seven years (in most cases) to three years–an important change especially to many smaller owners and breeders. Greg and his partners at the Alpine Group helped us renew that three-year depreciation provision, which almost sunset in 2013, for many more years.

Over the years, Greg helped us pursue numerous industry objectives on Capitol Hill–sometimes on offense to pass legislation and often on defense to keep Congress from passing legislation that would hurt our industry. But nothing Greg helped us accomplish was more important than the win we achieved in 2017. After many years of unsuccessful attempts, Greg and his team devised a strategy to leverage the strength of thousands of horseplayers to convince the U.S. Treasury Department and the IRS to modernize antiquated withholding and reporting requirements relative to winning pari-mutuel proceeds, thus making our wagering product fairer and more attractive. The changes virtually eliminated what were referred to by horseplayers as “signers” and since 2017 have kept hundreds of millions of dollars in the pockets of horseplayers and within the pari-mutuel system.

Later in 2017, Greg and his team at Alpine made sure Thoroughbred racing and breeding where not left out of the Tax Cuts and Jobs Act signed into law by President Trump. That Act contained a number of tax provisions favorable to the Thoroughbred industry, including 100% bonus depreciation.

As the pandemic raged in 2020 and several COVID-19 relief bills were hurriedly passed by Congress, Greg and his team helped make sure that members of the horse racing and breeding industry would benefit from those critical economic assistance packages.

As recently as this past December, Greg's work was on full display. Through contacts at the Alpine Group, the NTRA played a key role in identifying and resolving the “shared wallet” challenge, opening the door for sports betting and ADW companies to offer sports betting and horse race wagering on the same platform using a common platform and wallet. The launch of horse racing wagering on the FanDuel app was another quiet, yet important, victory for Greg and for the NTRA in Washington.

Seeing all the important successes achieved on Capitol Hill over the past two decades with Greg's leadership and strategic acumen, it is no wonder that the NTRA has doubled down on its presence in our nation's capital by opening a D.C. office and hiring former Congressman Tom Rooney as its President and CEO. A lengthy and proven track record in Washington–made possible with Greg's able assistance–made these decisions easy for the NTRA.

Year after year, the Thoroughbred industry benefited from Greg's unique relationship-building skills, his ability to open doors and the respect and high regard in which he was held by all on Capitol Hill. We always celebrate and honor the successes and achievements of our equine athletes, owners, trainers, jockeys and breeders. We tend to forget that there are less-celebrated unsung heroes who make our industry better and stronger. All of us in Thoroughbred racing owe a debt of gratitude and many thanks to Greg Means.

Personally, I will miss Greg's intellect and his dedication to our industry. He was a true friend and a trusted colleague. People like Greg are hard to forget and even harder to replace.

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Court Decision On HISA Creates Chaos

By Bill Finley & Dan Ross

The bombshell decision Friday out of the United States Court of Appeals for the Fifth Circuit that ruled that the Horse Racing Integrity and Safety Act (HISA) was unconstitutional has opened up a pandora's box of problems and had legal experts scrambling to make sense of the opinion and figure out what is the best path forward for HISA after a resounding setback in court.

“We have a chaotic situation right now,” said attorney Alan Foreman, an expert in equine law and the Chairman/CEO of the Thoroughbred Horsemen's Association. “That's probably the easiest way to describe it. HISA is still in effect, the anti-doping program is anticipated to go into effect on Jan. 1 and now we have a court ruling that declares HISA unconstitutional. And there are still legal maneuvers that can take place. It would have happened regardless of who prevailed at this level because it is clear that the HBPA, its affiliates and those who joined in the lawsuit would have taken it further if there was an adverse ruling. Now it is HISA that has to take it to the next step.”

According to Frank Becker, a private Kentucky-based attorney, the next step for HISA will be to either petition the Supreme Court to take the case or to seek an “en banc” hearing before the Fifth Circuit. Friday's ruling was handed down by a panel of judges, while an en banc hearing would require the case to be heard by the full circuit court.

The Supreme Court hears oral arguments in fewer than 100 cases a year, but Becker thought the court might take this case.

“They might take this one because it's so unusual,” he said.

Foreman agreed.

“When you have different circuits issuing different rulings as has been the case with this those cases often ultimately end up in the Supreme Court,” he said. “I think this case will ultimately wind up with the Supreme Court and a lot of people feel that way. I think they will take the case. It's got to get there first and there has to be a reason for them to take the case, but what has happened so far has set the stage for them to take it.”

Attorney Bennett Liebman, a Government Lawyer in Residence at Albany Law School, said it was a tossup as to whether or not the Supreme Court would take the case, but said that if it does there are far from any guarantees that the court will rule in favor of HISA.

“This has never been a case from the HISA standpoint that you want to end up in the Supreme Court because the court is obviously very conservative and you just don't know how they are going to rule on this,” he said.

In the meantime, Foreman said, HISA will have to get a stay. Otherwise, it will have to disband on Jan. 10 when Friday's ruling goes into effect.

“Unless there is a stay HISA has to stop in its tracks,” Foreman said.

Foreman said he didn't see a problem getting a stay. Becker disagreed and said he is skeptical HISA will succeed in getting a stay on the ruling in the interim.

Liebman added that there is another way for HISA to prevail. The Fifth Circuit ruling was based on its findings that HISA is ultimately in charge and not the Federal Trade Commission (FTC). “But the Authority is not subordinate to the FTC,” the ruling read. “The reverse is true. The Authority, rather than the FTC, has been given final say over HISA's programs.”

Liebman suggested that HISA could go back to drawing board and ask Congress to rewrite the legislation so that the FTC is clearly put in charge.

“The obvious solution is to try to get Congress to remedy what the Fifth Circuit thought was the problem, that the FTC does not have enough power,” Liebman said. “You could make sure that the FTC had significant power over the rules of the Authority. They could in effect make the rules. They could take recommendations from Authority, but still but make the rules. That is the way to go, but can we achieve that? The way the government works these days, I don't know.”

Becker didn't see that happening.

“Have you seen Congress at work lately?” he said. “Congress is going to be in chaos for the next year or so.”

All three attorneys agreed that the plaintiffs picked the right court when deciding to take their case to the Fifth Circuit.

“It's the Fifth Circuit, which is an extremely conservative circuit, even more conservative as a general rule than the Supreme Court,” Liebman said. “In that sense, this decision is not surprising coming out of the Fifth Circuit. The judge (Circuit Judge Stuart Kyle Duncan) who wrote the decision is ultra conservative.”

Said Foreman: “The experts thought it was constitutional and now it has been declared unconstitutional. I suspect that has something to do with the Supreme Court and this whole focus on the federal government versus states rights. The one circuit that would have reversed the decision and declared it unconstitutional is this circuit. That's why they went there.  They were the ones most likely to declare it unconstitutional. The plaintiffs brought this case to the Fifth Circuit for a reason. They know this partuclar court has been very, very anti-government and very anti-regulation.”

In the days and weeks ahead, the industry will no doubt hear more from HISA and its plan of attack. But Friday was not a good day for the Authority. Can it survive and what will it take to do so? Amid the chaos, that appears to be anyone's guess.

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Private Property Rights Under HISA

The legal threads connecting the rights of licensees to ply their trade and racetrack owners to police their grounds have been pulled tighter than a rip cord these past few years, thanks to a series of high-profile battles involving Hall of Famers Jerry Hollendorfer and Bob Baffert.

These same threads hamstrung the years-long dispute between California's trainers and racetracks about what should be written into the race-meet agreement about fair procedures for trainers facing potential banishment from a facility.

It all boils down to this: How best to balance the rights of track owners to protect their businesses from bad actors alongside the rights of trainers and others from becoming targets of arbitrary bans—actions with often huge implications for their professional futures?

As Jan. 1 looms, when the full remit of the Horseracing Integrity and Safety Act (HISA) is scheduled to go into effect—including most crucially HISA's anti-doping and medication control program—how will federal oversight of the sport alter exclusionary rights, if at all?

“HISA is finalizing its policies in this area and will have more to share in the weeks ahead,” wrote HISA spokesperson, Liz Beadle, when TDN asked to discuss the issue with a HISA representative.

So instead, the TDN reached out to three legal experts in the field. Their main takeaway? Other than a tightened regulatory world, don't expect much to alter—at least for now.

“I don't think it will really change the legal analysis,” said Bennett Liebman, Government Lawyer in Residence at Albany Law School and an adjunct professor of law.

Nuances

First and foremost, “I don't think HISA preempts the common-law right of a racetrack to exclude someone for whatever reason they want absent some protective civil right,” said Alan Foreman, CEO and chairman of the Thoroughbred Horsemen's Association (THA).

This means that if a track or racing association decides that a trainer has contravened moral or ethical boundaries—irrespective of whether that same person has fallen foul of any rules and regulations—they have the authority to do so independent of HISA, Foreman said.

“HISA can regulate in areas which they're authorized to regulate, but they can't tell me who I have to allow on my property and who I don't,” Foreman said.

Such actions are rarely cut and dried, of course.

Private properties are required to afford licensees the legal framework of “fair procedure” when seeking to bar them from their grounds. For a state agency—including a quasi-state agency non-profit organization like the New York Racing Association (NYRA)—the legal standard is “due process and equal protection.”

With this in mind, racetracks try not to specify detailed reasons for excluding an individual “in almost all cases,” said Liebman.

“When they do that,” Liebman explained, “there's potential that they might damage the individual's reputation and perhaps give way to constitutional protections.”

Therefore, “the normal approach by most racetracks is to say, 'you're being excluded for our best business interests,'” said Liebman. And he doesn't expect that broad legal dynamic to change much under HISA.

There are nuances, of course.

Even if a racetrack in West Virginia or Pennsylvania excludes a licensee from its grounds, that licensee can then petition the racing commissions in those states to overturn the ban, said Foreman.

In the hypothetical scenario a racetrack in those two states excludes a licensee for a reason that falls under the remit of HISA—for a welfare and safety related issue, for example—and the licensee then tries to take their case to the requisite commission, the relevant track “is going to make the argument that HISA deprives the racing commissions of any jurisdiction over drugs and safety,” said Liebman.

“I don't think it's going to be successful,” Liebman added, about such an argument made by the tracks. “But they're going to raise it.”

Foreman is less sure. Although HISA pre-empts state law, he said, it's unclear whether HISA nullifies the right of those commissions to independently arbitrate track exclusions in their jurisdiction.

“Maybe HISA does have the right to stand in that area,” he wondered. “Maybe not.”

Right of Private Property

This leads to another hypothetical.

In the event a racetrack in other states excludes a licensee for a reason that falls under HISA's regulatory umbrella, there's a strong possibility that person will litigate the action on grounds that HISA should be the one to adjudicate the alleged offense, not the track owners.

“If I was a lawyer representing an individual, I'd argue, “HISA does have jurisdiction here, and HISA has to tell the track what to do because HISA preempts state law,'” said Foreman.

But even then, individual tracks wield enormous legal clout, Foreman added. “If I'm the track, I'd say, 'I'm not acting under state law, I'm acting under right of private property.'”

As Foreman sees it, a more streamlined regulatory environment under HISA—including more expeditious case handling times—should negate the need for tracks to weed-out so-called bad actors (more on this in a bit).

“I think the actions the tracks have been taking recently is because they thought the regulatory system was failing to address offenders, multiple offenders, or those who were giving the industry a bad name,” said Foreman.

As such, “I think it's unlikely we're going to see tracks take actions against individuals because of their records,” said Foreman.

“I think with the enactment of HISA and the implementation of HISA, that probably goes away somewhat,” he added, “unless HISA's a failure.”

But how much latitude does HISA really have in this sphere?

 

Fair Procedure

Earlier this year, trainer Juan Pablo Silva was handed a 180-day ban from Turf Paradise after a 1-20 shot he trained and owned was pulled up and eased shortly after the start of a race.

This past June, trainer Marcus Vitali reached an undisclosed settlement with NYRA, after the latter claimed the trainer had “engaged in conduct that is detrimental to the best interests of the sport of Thoroughbred racing or potentially injurious to the health or safety of horses or riders.”

These two trainers subsequently found a home at Mountaineer—alongside another trainer, Burton Sipp, who has faced multiple allegations involving insurance scams and dead horses, animal neglect cases at a zoo he operated, race-fixing stings and regulatory malfeasance over a 40 year period.

Interestingly, Vitali and Silva have recently saddled horses at Turf Paradise, which kick-started its latest 2022-2023 winter meet on Nov. 4.

The question raised by the professional conduct and inter-state activities of these individuals is this: Does HISA have legal sway to independently step in and exclude licensees it deems a detriment to racing's image when a racetrack fails to do so?

For many watching HISA closely, this particular question is where the rubber meets the road.

There's language in the rules that appears to give HISA fairly broad authority over conduct detrimental to the sport and to equine welfare. As Foreman explains it, however, HISA has the ability to “fine, suspend, or revoke registration” from a licensee registered with HISA, but only if that individual is found guilty of violating stipulated HISA rules, and afforded due process.

Ultimately, “If a person is suspended, that's HISA's jurisdiction. HISA is the new national racing commission,” Foreman said, before hammering home how “that has nothing to do with a track's private property rights.”

An important caveat is that every licensee begins life under HISA with a clean slate.

“Remember, everybody starts at zero when the medication rules go into effect on January 1,” said Foreman. “They're not allowed to take into account their prior record.”

And Foreman said he is hopeful that HISA's new stricter set of rules and sanctions in general will motivate better overall standards of equine care.

One salient example of how this stricter regulatory theater will look surrounds Boldenone, an anabolic steroid better known as Equipoise.

In September, the stewards at Gulfstream Park suspended trainer Nagib Aboughaida 15-days and fined him $500 for a Boldenone positive. Under HISA, Boldenone is a prohibited substance, a positive for which necessitates an ineligibility period of up to 14 months.

Still, beyond the purview of actionable conduct, HISA's wrists are still fairly tightly tied, Foreman conceded. This of course includes there being “no mandatory reciprocity among racetracks if a racetrack chooses to exclude an individual for reasons it determines are appropriate,” Foreman added.

“That will still remain moving forward.”

Penalties for Equine Injuries?

That's not to say HISA doesn't have the potential authority to exclude trainers for actions or behaviors that aren't currently specific violations, said Drew Couto, an attorney who has represented trainer Jerry Hollendorfer in the many-splintered litigations stemming from his exclusion from The Stronach Group facilities in June of 2019.

The trick, Couto said, will be to devise a set of objective criteria to specifically delineate expectations of ethical equine care.

Crucially, such criteria must be relayed to trainers and others in clear, easily understandable fashion, said Couto.

“I don't think somebody should be left alone without any idea that their license is in jeopardy and all of a sudden be blind-sided,” said Couto.

In other words, “being congratulated one week in the winner's circle for your winners, and then the next week being told you've got to get out of Dodge,” Couto added.

In this regard, what HISA would have to do is similar to what the California Horse Racing Board (CHRB) attempted last year, when proposing regulations that would have penalized trainers for certain equine injuries or fatalities.

The CHRB shelved that idea in favor of a blue-ribbon panel to review equine injuries, stymied—at least for now—by the practicalities of framing sanctionable regulations around what is often such a nuanced and multi-faceted issue.

As for HISA intervening in private property matters, Couto believes that in the early days of the law, the new federal Authority will prove reluctant to weigh in on many matters where licensees have been excluded from private facilities.

Absent that clear set of standards in cases where licensees haven't broken any specific rules, “I suspect HISA's not going to want to jump into the deep end of that pool—not at the outset,” said Couto. “Their lawyers are going to say, 'do we want to be the defendants in a Jerry Hollendorfer-type of case?'”

Given the sheer scale of litigation costs as well as the enormity of the undertaking still ahead in ensuring that HISA works as intended, said Couto, “does HISA want that?”

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