Proposed HISA Rule Change: Emergency Power to Suspend Live Racing?

The opening months of 2019 were still fresh in California lawmakers' minds when they passed a bill that summer giving the California Horse Racing Board (CHRB) emergency authority to suspend racing at a track without the hitherto required 10-day public notice period.

The precipitating event, of course, was the spate of equine fatalities that had covered Santa Anita, and the racing industry in general, under a pall of public condemnation–the exact same kind of scrutiny Churchill Downs has faced these past few weeks, culminating with the announced switch of racing venue to Ellis Park.

As events have unfolded at Churchill Downs, representatives from the Horse Racing Integrity Act (HISA) have made it clear that they could stop the track from exporting their simulcasting signal out of state, if they deemed it necessary.

Here, however, it should also be noted that throughout this period, HISA officials have repeatedly stressed how the agency's actions have been in unison with both Churchill Downs and the Kentucky Horse Racing Commission (KHRC).

But the ability to block the export of a simulcasting signal is not enough, say several non-HBPA affiliated horsemen's groups, including the Thoroughbred Horsemen's Association, the Kentucky Thoroughbred Association (KTA), the Thoroughbred Owners of California, the New York Thoroughbred Horseman's Association, and the Thoroughbred Owners and Breeders Association.

Since the earliest days of the HISA rulemaking process, they have argued for a clear set of rules giving HISA the discretion to completely suspend racing at a facility by removing its accreditation in the event of a safety-related crisis.

“Some of these owner-trainer groups feel so strongly about this issue,” said Chauncey Morris, executive director of the KTA, who stressed that he believes Churchill Downs, the KHRC and HISA have taken the correct steps throughout the past few weeks.

In answer to a series of questions, HISA spokesperson, Mandy Minger, wrote that the federal agency is indeed considering such a rule change.

In background conversations with track officials, however, they've stressed the disruptive nature of such actions, which can have profound economic impacts on a wide swath of stakeholders. Others warn that such powers need clear definition.

Scott Chaney, CHRB executive director, agrees that the threat alone of pulling a track's simulcasting signal “is not a complete solution,” but the key question for him is this: What criteria would HISA use to justify the ability to suspend racing completely at a facility?

“Is it purely fatality based?” he said. “Or is it more response based–like, is the response of the track satisfactory?”

The Proposal

HISA cited Turf Paradise back in January for several safety-related problems like faulty track rails and a subpar racetrack surface maintenance program. Track management ultimately complied, but only after the HISA Authority applied the thumbscrews of a possible simulcasting export block.

In the Turf Paradise situation, therefore, there were clear racetrack safety violations that HISA used as enforcement leverage.

But what happens in a situation where a track experiences a rash of fatalities and there is no clear actionable violation? What if management at that track is not as cooperative with HISA's overtures as Churchill Downs has been? Then add to the mix the growing wingbeat of a national media calling for the sport's swansong.

This is the central conundrum prompting certain horsemen's groups to advocate for HISA to wield such discretionary powers–something the groups did during the first round of the rule-making process, submitting comments calling for the HISA Authority to be given “residual power to suspend accreditation and suspend racing in case of an unusual cluster of fatalities or other safety emergency.”

They added back then that “unambiguous language is necessary to provide that the Authority and its Safety Committee can actively monitor accreditation requirements during live racing, suspend accreditation immediately in order to ensure the safety of horse and rider, and suspend racing until corrective measures are undertaken.”

Those initial proposals were submitted at the start of 2022. According to Morris, the same groups are in the process of resubmitting similar commentary in the latest window to tweak HISA's rule. And HISA, it appears, is listening.

According to Minger, HISA's current rules bar them from prohibiting “Covered Horseraces at a Racetrack” without an accreditation suspension or a finding of a racetrack safety violation.

However, “for circumstances where that is not the case, HISA is closely examining and considering a new safety rule traditionally utilized by State Racing Commissions to summarily suspend Covered Horseraces at a Racetrack when circumstances present an immediate danger to the health, safety, or welfare of Covered Persons, Covered Horses, and Riders, or are not in the best interests of racing,” wrote Minger.

A formal process to remove a track's accreditation, however, still appears to leave a window open for live racing to continue–as in Texas, where the tracks there are not HISA accredited but continue to operate without the ability to export their simulcasting signal out of state.

Uniquely for Texas, the lack of an exported simulcasting signal has not dramatically affected the state's purse fund, buttressed as it is with monies from a sales tax on equine products. Purses in many other states, however, are funded heavily through wagering.

Without the ability to export a signal, the hypothetical question becomes: How long could a track operate without these monies coming in?

Specific Criteria

The CHRB rule giving it emergency discretion to suspend a track's license is prescriptive about the necessary steps the commission must take to execute that power.

The board must give track management at least 24 hours' notice of the hearing on the petition to suspend the license, which can be filed by the executive director or by the equine medical director, for example. The board also has five days following the petition's filing to make a decision on the suspension or license restriction order, among other requirements.

What's missing, however, is a clear set of detailed criteria delineating what set of circumstances warrant the CHRB's petition to be filed in the first place, and that's a big problem, said Chaney.

“From a regulatory standpoint, pressure and notoriety alone should not be the criteria,” warned Chaney.

Which leads to perhaps the thorniest aspect of the proposed rule change–what are the agreed-upon parameters so this regulatory trip wire isn't used capriciously?

The term multifactorial is routinely bandied around to explain fatal musculoskeletal injuries.

In a cluster of deaths, is there commonality in the way the horses were conditioned and medicated, for example? Are there glaring holes in the pre-race veterinary checks? Is the out-of-competition testing program rigorous enough? Has the racing office unduly pressured trainers to enter? Is the track surface at fault? What about their breeding, and the way they were raised?

This Iliad-like search for answers makes transparency of a baseline set of information vital in the quest to identify preventable fatalities, said Chaney.

“But since all reporting is not equal, it's hard to have an open and honest conversation about that,” he added.

Indeed, in recent weeks Churchill Downs has faced criticism over its decision not to publicly share equine fatality data through the Equine Injury Database. And it's unclear when HISA–which is mandated to publicly share this data uniformly–will step up to the task.

“HISA's accreditation team has been working with tracks to help them meet their internal review and reporting obligations. We're also in the process of developing internal systems so that reliable catastrophic injury data can be aggregated and made available to the public on an ongoing basis. Until such time as reporting and tracking systems are in place nationwide, The Jockey Club's Equine Injury Database continues to be the most reliable source for the type of information you requested,” wrote Minger.

But this particular data-set is only one part of the industry's current black-hole riddled nebula of unreported and hidden information. The sooner the industry at large begins sharing relevant data in a timely manner–everything from detailed vet's list info to stewards' reports–the better, said Chaney.

“Regression to the mean is just not good enough,” he said. “When it comes to safety, every track, every regulatory authority, has to do everything they can.”

Cautionary Tales

Attorney Drew Cuoto has long been critical of tracks unilaterally suspending individuals from their facilities, describing instances where he believes the horsemen have not been afforded the necessary due process rights of hearing and appeal.

Couto, it should be noted, has represented Jerry Hollendorfer in ongoing litigation stemming from The Stronach Group's 2019 decision to bar the trainer from the company's facilities.

And so perhaps surprisingly, Couto, one of the founding members of the Thoroughbred Owners of California, agrees with the fundamental premise that HISA is given these additional discretionary powers.

But before actually wielding that cudgel, the Authority should ensure that it has taken reasonable measures to get to the bottom of the problem, he said, mirroring Chaney's comments.

“Every situation is unique,” Couto said. “But in my many years of experience, in the event of these unusual clusters, typically there are issues related with the track itself.”

As such, Couto believes that such a scenario should immediately prompt HISA to bring in outside experts to evaluate the available information, like failure analysts and composite material science experts to evaluate track surface measurements.

Here it should be noted that one of the things HISA has done at Churchill Downs is bring in an equine forensics specialist to conduct an independent review of the necropsies.

This is especially needed at those facilities where track operators might not have the necessary training and experience to understand the complex set of factors behind fatality clusters, said Couto. He points out how–unlike many positions in racing like trainers and veterinarians–individuals filling certain racetrack operational roles aren't tested for proficiency through a formal licensing process.

Right now, “suspensions largely serve PR objectives over reasoned analysis,” he said. “And so, what I hope HISA can do is not take the current scientific consensus as gospel, but to see it as a starting point in the scientific process.”

As Morris sees it, however, HISA is uniquely placed to cut through the red-tape of competing interests to police the “triad” of American racing–the racetracks, the horseman and racing commissions–equally.

“In past situations, it can turn into a blame game between the racetrack, the horsemen and a state racing commission that feels it may or may not have the power or jurisdiction to step in,” said Morris.

“But HISA is an independent regulator,” he added. “That is something that was very, very appealing to our collective group.”

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KTA and TOBA Contribute $25,000 to Catastrophic Injury Study

The Kentucky Thoroughbred Association and Thoroughbred Owners and Breeders Association are
jointly funding a $25,000 grant directed to a catastrophic injury study conducted at the University of Kentucky Gluck
Equine Research Center.

The study will seek to identify horses at risk for catastrophic injury through the use of mRNA expression analysis of
blood samples. Drs. Allen Page, Emma Adam and David Horohov of the Gluck Center previously developed an approach for identifying horses at risk for catastrophic injury through the use of mRNA expression analysis of blood samples. It was recently demonstrated that horses with catastrophic injuries have significantly altered expression of IGF-1, IL1RN, and MMP2 when compared to non-injured control horses. Based on all the data and research to date, it is believed that Thoroughbreds which experience a catastrophic injury during racing will demonstrate multiple pre-race differences in mRNA expression when compared with non-injured, race-matched control horses.

“Allen's research should provide our Thoroughbred racehorse owners and their trainers and veterinarians a critical and valuable diagnostic tool in ensuring the health of their horses,” said Chauncey Morris, executive director of the Kentucky Thoroughbred Association. “Collective industry research on novel scientific methods looking for internal and external variables in order to reduce catastrophic injury is a step in the right direction.”

“TOBA and KTA are both committed to the health and safety of our Thoroughbred athletes, and we are encouraged by the progress being made by Dr. Page and his colleagues,” said Dan Metzger, president of TOBA. “If successful, the CI Study will have a lasting and far-reaching influence on our sport.”

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Thoroughbred Community Raises Tornado Relief Funds

LEXINGTON, KY–Kentuckians across the Commonwealth woke up with a text on Saturday morning: 'Are you okay?' For most, it was an uneventful night aside from perhaps being awakened once or twice to the sound of high winds. But for some, unimaginable destruction and immeasurable damage occurred overnight as a catastrophic tornado hit western Kentucky.

As of Friday, 77 Kentuckians have lost their lives due to a storm that is expected to have affected an estimated 227 miles, according to WLKY News.

Bradley Boyd, a professional Quarter Horse trainer based in Princeton, Kentucky, sent his children to the basement Friday evening when he heard news of the approaching tornado.

“The tornado passed about a mile behind our place,” the horseman recounted. “I watched it pass at 10:21 that evening; I'll always remember the time. By 10:40, I'd had a phone call from one of my best friends. It had killed three of his horses and his place was just gone.”

As Americans awoke the next morning to news of the devastation, Boyd drove to what was left of his friend's farm.

“By the time I got there, they had caught their horses so we just went digging stuff out of their house,” he said. “It's heartbreaking to see people who build and build and have it all taken at one time. It's heartbreaking. But to watch the horse community come together since this has happened, it has been incredible. It's one of my favorite things about the horse community is that when it comes to these horses, everyone steps up.”

It didn't take long for the Thoroughbred community to jump into action. On Sunday, the Kentucky Thoroughbred Association launched a GoFundMe page to aid in the relief efforts, kicking the fund off with a $7,500 contribution.

“It's something that the Thoroughbred industry has done in the past, most recently this February when there was some major flooding in Southeast Kentucky, ” said KTA Executive Director Chauncey Morris.  “We have a bit of experience not only in raising funds, but in figuring out what exactly to do with them when emergency strikes.”

As funds started to pour in, Morris got in touch with Don Campbell, a Thoroughbred trainer from Princeton and the next-door neighbor to Bradley Boyd, to find out what the immediate needs were for horse owners and farms in the area.

“Our farm didn't really have any damage,” said Campbell. “You can't even count it compared to what other people have. Most of the people who got hit lost everything–houses, barns, fencing, all their supplies, trailers, cars. It wasn't a typical Kentucky tornado where something gets torn up and something else gets left behind. It was more like if you were in the path of it, you just got wiped out. You can see the pictures, but it's nothing like it is in person. It's like a war zone. ”

Chauncey, Campbell and Boyd arranged to open up Boyd Performance Horses as a supply distribution center.

“Chauncey had told us to be ready because  they were going to send a bunch our way,” Boyd said. “I told them to bring it on and that we would make it happen one way or another.”

Since Tuesday, the KTA has organized shipments of hay, grain, water hoses, dog food, fencing and various supplies, working with agricultural centers in the area to help distribute incoming supplies to surrounding communities.

A church in downtown Mayfield, Kentucky

“The ag centers are sending people here to come pick things up and everyone is just overwhelmed with how much support we're getting,” Campbell said. “But still, we're getting more calls than we have stuff. I had 40 buckets sitting in a barn that I had kept over the years. I took them over to the distribution center and they were gone after an hour.”

“Just today alone, we've probably sent out almost 20,000 pounds of feed between hay and grain,” Boyd said on Thursday. “We're glad to be able to help in any way we can, but without Donn and the KTA, we wouldn't be able to do any of this right now.”

“We just heard that a semi-load of treated fence posts will be here on Monday,” Campbell said. “Chauncey has been ringing my phone off the wall to see what our needs are. I'm not talking about them sending a few pickup loads. Everything they're wanting to do is with semis. The way the Thoroughbred industry has stepped up has been unbelievable. That's the best way for me to put it and I'm proud to be a part of it.”

While the KTA will continue to provide necessary supplies for farms in western Kentucky, they are also beginning to look towards the future to determine how to best allocate their growing funds as the rebuilding process begins.

“We're taking care of immediate needs now, but for the medium and long term, we know that historically, federal disaster relief doesn't always pay for everything and some people fall through the cracks,” Morris said. “FEMA and SBA programs do not generally pay for people who are renting their apartments, homes or trailers. So that's where hopefully we can come in and help.”

Morris explained that the custodian for the funds raised through their GoFundMe will be the Foundation for Appalachia Kentucky. The Hazard-based organization is the same group the KTA worked with when they raised money for flood relief earlier this year and the program has already partnered with another organization in Paducah called the Community Foundation of West Kentucky.

“The scale of this disaster is so big and our industry generally has a very big heart,” Morris said. “Here in Kentucky, it's not lost on anyone just how good things are in the Thoroughbred business since the HHR bill was passed. We have a lot to be grateful for and this is our way of being good citizens of the Commonwealth of Kentucky.”

The KTA's GoFundMe has received major donations from outlets including The Jockey Club,  Juddmonte Farms, Stonestreet Farm, Godolphin and Lane's End. Spendthrift Farm gave what is currently the largest contribution with a $100,000 donation.

“This is a terrible tragedy and our donation represents our entire farm and our dedication to our brothers and sisters in need,” said the farm's owner Eric Gustavson. “We so appreciate the KTA, UK and every other organization that has stepped up to serve.”

Claiborne Farm also contributed to the relief fund.

“It's awesome to see the Thoroughbred business come together and raise so much money for those whose lives have been turned upside down,” Claiborne President Walker Hancock said. “In times of need, we are quick to lend a hand, which makes me so proud to be a part of this wonderful business.”

Hancock was featured on a local news outlet this week after discovering a family photo in one of the farm's paddocks on Saturday morning and suspecting that it might have come from an area affected by the tornado.

“I saw some mares sniffing it, I thought it might be a piece of trash I didn't want them to ingest so I jumped the fence and grabbed it and sure enough it happened to be this picture,” Hancock told WKYT on Wednesday.

Relatives of the two children in the photograph saw the story run on WKYT and notified the family, who lives over 100 miles away from Claiborne in Campbellsville, Kentucky.

 

Another high-profile stud farm in Lexington has helped raise awareness for the KTA relief fund as Coolmore's Ashford Stud auctioned off a 2022 season to Triple Crown winner Justify with the proceeds benefitting the fund. The bidding was announced on Monday and closed on Friday, with a winning bid of $95,000 from Craig Bernick. Additional bidders included Ken Donworth, Dennis Drazin and Bobby Rankin.

Coolmore will be making an additional donation along with the proceeds raised from the Justify season.

“One of the greatest things about this business is that even though we are competitors in certain aspects, when times are tough and the need is there, the horse business shows great solidarity,” said Coolmore's Adrian Wallace. “It's great to see farms, veterinary practices, breeders and trainers come together to help out. Western Kentucky has been very good to the horse business and it's time that we show our appreciation and help out where we can. Even though it won't bring these lives back, hopefully it will help ease the suffering that a lot of these people are going through.”

Other racing organization have also stepped up in the past week. Breeders' Cup donated $50,000 to disaster relief efforts, splitting the donation evenly between the KTA fund and the University of Kentucky's “Kentucky United for Tornado Relief” telethon, and the Kentucky HBPA donated $25,000 to the Team Western Kentucky Tornado Relief Fund organized by Governor Andy Beshear's office.

Several fundraising events have been organized by Lexington's equine community and will be happening in the coming weeks.

Multiple equine-related groups including the Kentucky Horse Council have joined forces to organize a supply drive for equine-specific needs. Donations including buckets, winter blankets, halters, lead ropes, wheelbarrows and water hoses can be dropped off at the Kentucky Horse Park's Alltech Arena from 8 a.m. to 5 p.m. on Dec. 18 – 20. Donated goods will be delivered on Tuesday by Brook Ledge Horse Transportation. Learn more here.

On Sunday, Jan. 2, Frank & Dino's restaurant in downtown Lexington will serve complimentary food and drinks from 12 p.m. to 8 p.m. All proceeds will benefit the families in Mayfield, Kentucky affected by the tornado. Owner/breeder/trainer and Frank & Dino's managing partner Carlo Vaccarezza spoke with the TDN on Thursday regarding the event.

As of Saturday afternoon, the KTA's GoFundMe had surpassed $308,000 in funds raised with over 290 donations made. Click here to view.

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Barr Introduces Legislation To Make Racehorse Tax Depreciation Schedule Permanent

U.S. Congressman Andy Barr (KY-06) reintroduced legislation to incentivize investment in Kentucky's signature equine industry.  The Equine Tax Fairness Act would make the three-year depreciation schedule permanent for racehorses, regardless of their age when put into service. Currently, Congress must reauthorize this provision in the tax law on an annual basis.

Additionally, this legislation would reduce the holding period for equine assets to be considered long term capital gains, putting them on a level playing field with other similar assets. Congressman Barr's bill is endorsed by the National Thoroughbred Racing Association (NTRA), the Kentucky Thoroughbred Association, the Jockey Club, the Thoroughbred Owners and Breeders Association, Keeneland, and the American Horse Council.

“Permanently delivering tax incentives for owners and breeders will strengthen investment in our signature equine industry,” said Congressman Barr, who serves as Co-Chair of the Congressional Horse Caucus. “I want to continue the momentum started with the enactment of the Horseracing Integrity and Safety Act to push another key industry initiative across the finish line that will help solidify the sport for decades to come.”

“The three-year depreciation of racehorses (similar to other investment assets) is critically important to encourage robust investment in Thoroughbred horses and to maintain the vibrant economy and trade we have seen throughout this Thoroughbred sales cycle and consistently over the past 85 years at Keeneland,” said Shannon Arvin, President and CEO of Keeneland.  “We appreciate Congressman Barr's consistent support of this legislation and the entire Thoroughbred industry.”

“Congressman Barr understands the horse racing industry and appreciates the impact this bill would have on attracting and maintaining ownership in racehorses,” said Alex Waldrop, President and CEO of NTRA. “We thank him for introducing the Equine Fairness Act and for helping support an industry that is a job-creating economic engine for his home state of Kentucky and for other states.  Both provisions offer a level of tax fairness and flexibility that racehorse owners seek when determining their level of investment.  This bill simply is good for business.”

“The Jockey Club wholeheartedly supports the Equine Tax Fairness Act, introduced by Congressman Barr,” said James Gagliano, President of the Jockey Club. “This bill will put horse ownership on par with other investment assets.  The three-year depreciation schedule accurately reflects the typical career of a racehorse since nearly three-quarters of foals that race have a career of four years or less. This change has been enacted by Congress on a temporary, year-to-year basis since 2008, and needs to be permanent law.”

You can read the Jockey Club's full statement on the bill here.

“The Kentucky Thoroughbred Association endorses the Equine Tax Fairness Act, and is very grateful to Congressman Andy Barr for introducing it.  Kentucky breeders produce foals that become racehorses in 38 states, and the 3-year depreciation encourages racehorse ownership which we know supports 241,000 direct racing sector jobs nationwide as well as the 60,000 direct, indirect and induced jobs in the Commonwealth of Kentucky,” said Chauncey Morris, Executive Director of the Kentucky Thoroughbred Association.

“The Thoroughbred Owners and Breeders Association fully endorses Congressman Barr's bill to reward investment in our great sport,” said Dan Metzger, President of the Thoroughbred Owners and Breeders Association.  “We thank him for his consistent support for owners and breeders and the Thoroughbred horse racing industry as a whole.”

“The American Horse Council is pleased to endorse Rep Barr's Equine Tax Bill, which will help ensure growth and investment in the $122 billion equine industry,” said Julie Broadway, President American Horse Council.

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