As Many Questions As Answers On Eve Of HISA Implementation

A year and a half after being signed into law, the Horseracing Integrity and Safety Act (HISA) is expected to kick into action Friday, meaning a new uniform set of medication rules and safety standards that everyone can abide by–that, at least, was the plan.

The execution has somewhat thrown those intentions to the wind in the near term, with a piecemeal approach to implementation that has seen the anti-doping and medication control arm of the program pushed back to early next year, and several other features of the law–such as horseshoe requirements and whip specifications–pushed back a month.

In response, four U.S. Senators have requested answers from the Horseracing Integrity and Safety Authority–the umbrella non-profit established by the Act to oversee the program–about the legality of this staggered approach. The Authority has until July 11 to respond.

Though a legal challenge by the states of West Virginia and Louisiana to block HISA going into effect Friday failed, there still remains the possibility of any number of unregistered horses being scratched around the country over the next few days and, perhaps, weeks.

The registration deadline has been pushed back a day, to July 2. As of the morning of June 29, 20,537 people and 23,070 horses have been registered, as per the Authority.

The Authority was unable to provide estimates as to the numbers of both covered persons and covered horses that are still left to be registered.

“Since such a registration process has never existed at the national level before, it's unclear how many people and horses are or will be participating in racing come July 1. It should be noted that the universe of people expected to register is limited to the 24 states conducting covered horseraces under HISA's authority,” wrote a spokesperson for the Authority.

As a potential guidepost, 30,846 individual Thoroughbreds have made at least one start at a U.S. racetrack between Jan. 1, 2022, and June 29, according to DRF data. This includes Thoroughbreds starting at Quarter Horse and Fair tracks.

As of Friday, some of the law's key safety rules go into effect, including those governing crop use and voided claims. More on that in a bit.

Fee Assessments…

Another pressing concern for racetrack operators, industry stakeholders and the betting public is the question of cost–more importantly, who's going to pick up HISA's tab?

HISA's first-year operating budget is about $14.3 million. The way the fees have been calculated, those states or tracks with the highest handle, purses and number of starts have the largest assessments.

Each state commission has already decided whether to opt in or out of collecting and remitting fees for the program. When a commission opts out, that responsibility then falls to the tracks and the horsemen.

According to HISA, five states have chosen to fund their portion of HISA: California, Colorado, Kentucky, Minnesota and Virginia. And so, how are these five states choosing to collect their fees?

California: The Golden State owes some $1.4 million to the HISA Authority for calendar year 2022.

“Conditioned on proposed statutory authorization, the payment will be split equally between thoroughbred horsemen (purse revenue) and Thoroughbred racetracks (commissions) from their shares of Advance Deposit Wagering (ADW) revenue. This will not affect bettors,” stated the California Horse Racing Board (CHRB) in a recent press release.

Kentucky: Kentucky's portion of HISA is about $1.28 million. According to Kentucky Horse Racing Commission (KHRC) spokesperson Kristin Voskuhl, in an email, “The KHRC will disclose the annual HISA fees to Kentucky's racetracks upon receipt of an invoice from HISA. The process for how and when the KHRC will assess these new fees has not been finalized.”

Colorado: Jim Mulvihill, interim executive director of the Colorado Horseman's Association, wrote in an email that the Colorado Division of Racing stepped up to pay it out of their own budget. “So, no cost is being passed on to the track or horsemen,” he wrote.

Minnesota: According to Charlene Briner, interim director of the Minnesota Racing Commission, the commission is “continuing to evaluate the mechanism for collecting funds to pay the fees that will be assessed.”

Virginia: Executive secretary of the Virginia Racing Commission, David Lermond, explained that the commission has elected to pay its share out of its operating fund. “We're not making the horsemen pay for this,” said Lermond.

The TDN asked the Authority for information about how individual tracks are electing to collect their fees. “Would advise asking the tracks themselves that question,” the spokesperson responded.

The TDN reached out to some of the tracks facing the largest fee assessments, starting with the big three in New York: Aqueduct, Belmont Park, and Saratoga Race Course.

The New York Thoroughbred Horseman's Association (NYTHA) and the New York Racing Association (NYRA) have agreed to split the cost “and HISA has approved our plan,” wrote Joe Appelbaum, NYTHA president, in an email.

NYRA will pay approximately $800,000 and the remaining $800,000 comes from a per-start fee. The fee will begin in Saratoga and will be $50 at Aqueduct, $70 at Belmont and $90 at Saratoga. We are hoping to reimburse all runners from fourth on down,” Appelbaum wrote, adding in a follow-up call that NTYHA and NYRA area still working out the reimbursement part of the equation. Officials at NYRA confirmed Appelbaum's remarks.

Now to the Maryland tracks.

“The Maryland industry has historically divided joint expenses 50% track, 44% horsemen (Purse Account), 6% Bred Fund, consistent with the Ten Year Agreement effective 1/1/13.

“For the HISA assessment for 2022, the stakeholders have agreed to divide the cost of HISA in accordance with that formula,” wrote chairman and CEO of the Thoroughbred Horseman's Association (THA), Alan Foreman, in an email.

No individuals will be assessed or charged with starter fees, explained Foreman, adding that the tracks “cannot dictate” an inequitable formula.

“HISA encourages agreements among the stakeholders, and we have done that in [Maryland]. We have encouraged our fellow horsemen's organizations to do the same,” he wrote.

According to Bill Badgett, executive director of Florida operations at Gulfstream Park, that track has yet to settle on a final method of fee collection.

TDN also reached out to the operators of Monmouth Park and Parx Racing–both tracks among the higher end of the fee assessments–but hasn't received a response before publication.

Voluntary Agreements…

As of Friday, key portions of the racetrack safety program are scheduled to go into effect.

Among these regulations is a uniform crop rule and baseline fitness requirements for jockeys, a voided claim rule (allowing owners or trainers to void claims in the event of post-race lameness or other problems), and veterinary treatment documentation requirements for owners and trainers.

Who's going to be responsible for overseeing HISA's new safety-related duties, which would similarly include tasks like the regulatory examination of horses?

In short, commissions can enter into voluntary agreements with HISA, permitting existing staff within those states to perform the tasks outlined by HISA.

If a commission chooses to eschew that agreement, then HISA must send in substitute staff to fulfil these functions.

The TDN asked the Authority for a list of tracks which have signed a voluntary agreement with HISA but received no response. Nor did the Authority answer questions about whether it has enough staff to accommodate the needs in states that eschew the voluntary agreement.

According to the Association of Racetrack Commissioners International's (ARCI) Ed Martin, the following 15 states “have some sort of written representation with HISA of what they are currently doing, and how that fits into what HISA would like to have done.”

These state are: Arkansas, California, Colorado, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, Washington and West Virginia.

Martin stressed that this isn't a definitive list, with some states potentially having entered into some kind of agreement with HISA without his knowledge.

It's currently unclear if the New York State Gaming Commission has entered into such an agreement with HISA, but according to NYRA, its staff are fulfilling HISA's new safety functions.

According to NYRA spokesperson Pat McKenna, “a NYRA designee will be enforcing the HISA rules that are beyond the purview of the state steward.”

In a follow-up call, McKenna explained that these personnel will include a safety steward, a steward designee, and regulatory veterinarians.

As of Friday, a number of prohibited practices go into effect, including blistering, the pin and freeze firing of horses (beginning with the foal crop of 2022), and the use of “electrical medical therapeutic devices including magnetic wave therapy, laser, electro-magnetic blankets, boots, electro-shock, or any other electrical devices that may produce an analgesic effect within forty-eight (48) hours of a training activity or of the start of the published post time for which a Horse is scheduled to race.”

What are the possible sanctions in the event of a prohibited practice violation? And who exactly could face sanctions? The Authority failed to respond when asked.

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Sports Betting Regulatory Association Announced, HISA Discussed at ARCI Conference

LEXINGTON, KY–The Association of Racing Commissioners International (ARCI) announced the official launch of the Sports Betting Regulators Association (SBRA) during the closing session of the group's 88th Annual Conference on Safe Horses and Honest Sport.

ARCI president and CEO Ed Martin explained that the formation of the SBRA has been in the works for several years and was organized to meet a growing need to support government agencies assigned with the responsibility of regulating sports betting within their jurisdiction. Sports betting in America continues to expand and has now been legalized in 33 states.

“With some of the sports that people are allowed to wager on, there is no transparency,” Martin explained. “The states have a responsibility to ensure that everything they allow people to wager on is on the up and up. It's a new era and it's an area that horse racing regulators have tremendous experience in. The world has changed in these past couple of years and there's a need. More and more states have gone into the business of regulating sports betting.”

The goal of the SBRA will be to ensure standards and best practices are set in place to promote integrity and transparency in the sports betting field. Martin said that the SBRA will function as an autonomous committee of the ARCI that will be open to all sports betting regulatory entities, including those that are not existing members of the ARCI. SBRA policies will emulate the rules and standards established already by the ARCI in horse and greyhound racing.

“This is an expansion of what the ARCI will work on,” Martin said. “We will not lessen what we do on the horseracing side in any way. The perception is that we're part of the racing industry, but the reality is that we serve the general public. Based on the integrity concerns that are going on in human sport, and when you look at the comparison of what is done in horse racing in regards to transparency of officials and anti-doping, it's that transparency that provides consumer protection for the public that is wagering on and supporting these sports.”

Martin said that the SBRA will conduct its first meeting on July 10 in Boston in conjunction with the National Conference of Legislatures from Gaming States.

Also during Wednesday's session of the ARCI conference, Ben Liebman, a Government Lawyer in Residence at Albany Law School, examined the pending federal court challenges to the Horseracing Integrity and Safety Act.

Liebman looked at the two court cases that have challenged HISA–the federal lawsuit filed by the state of Oklahoma in April 2021 and another lawsuit filed by the National Horsemen's Benevolent and Protective Association (NHBPA) that was dismissed in March 2022 when U.S. District Court Judge James Wesley Hendrix said that while the Court recognized that HISA pushes boundaries of public/private collaboration, the law as constructed stays within the current constitutional limitation.

Liebman said that one of the main issues regarding the case of HISA's constitutionality is the question of to what extent the Horseracing Integrity and Safety Authority is subordinate to the Federal Trade Commission (FTC).

Liebman used an example comparing HISA and the FTC to the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission (SEC). FINRA, a private, self-regulatory authority that regulates 624,000 financial brokers, is overseen by the SEC. Liebman explained that before a rule created by FINRA goes into effect, the SEC must approve that rule. The SEC's ability to control and supervise FINRA makes FINRA constitutional.

“You have a very strong belief that because of how FINRA has worked, HISA's authority should have the powers that are accorded FINRA,” Liebman said. “This issue becomes a matter of if the Authority controls racing regulation or if it is controlled by and subordinate to the Federal Trade Commission.”

Liebman added that while the FTC can review and approve rules set forth by HISA and can suggest modifications, it cannot promulgate rules itself and has no power over authority members and their terms. This prompts the question of if the FTC has sufficient authority over HISA. In the NHBPA case, Judge Hendrix said that based on how the law is currently written, HISA is subordinate to the FTC because only the FTC can approve its rules and because the adjudicative process does satisfy due process.

Another question that could come forward in the current court cases concerns anti-commandeering, meaning that Congress cannot take over a state's governing apparatus and force it to do its bid. Liebman said the court must determine if HISA would cause states to lose their ability to fund their racing integrity programs and if it would strip law enforcement agencies into federal service via mandatory cooperation. Liebman admitted that this issue alone will likely not lead to a total invalidation of HISA and its power.

Liebman listed several changes that could be made to HISA to help it defend its constitutionality including ending the mandatory cooperation clause, giving the FTC power over Authority member terms and the ability to remove members, giving the FTC greater authority over rules or even the ability to promulgate rules itself, and making all or nearly all Authority members unaffiliated with the racing industry.

“Even if the higher courts change the concepts of delegation and public control of private regulatory power, it's hard to envision that most of HISA cannot be salvaged because it is so much like FINRA,” he said. “It is unimaginable that a court ruling would take a wrecking ball to the current system of financial regulation in the country. Maybe the Authority doesn't always win and maybe it won't get what it wants, but it is likely that it will get what it needs.”

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Opening Session of 2022 ARCI Conference

   LEXINGTON, KY – The Association of Racing Commissioners International (ARCI) hosted the first day of their 88th annual conference on Safe Horses and Honest Sport on Monday, April 11 at the Griffin Gate Marriott in Lexington. The three-day event is held in conjunction with the meetings of The National Racing Compact and The Horseracing Integrity and Safety Authority.

ARCI President Ed Martin opened the first session, emphasizing that racing currently sits at a crossroads in the sport's history with the impending implantation of the Horseracing Integrity and Safety Act.

“We are going through a massive change in the regulation of the sport in general,” he said. “We have a responsibility ultimately to the general public, secondly to the industry and sport that everyone in this room loves and in many cases comes from, and we have a moral responsibility to these wonderful animals that are the cornerstone of our sport.”

Martin introduced speaker Liza Lazarus, the CEO of the Horseracing Integrity and Safety Authority (HISA), who spoke on the current state of HISA and implored regulators that to “give us a chance” as they begin to put their regulations into action.

“The industry is facing pressure from the public and from owners, trainers and riders [asking] where is this industry going and what we can do to make it the best version of itself,” she said. “I know that all of you who work for state racing and gaming commissions are on the front lines regulating and doing good work. We are not coming in to say that your work isn't good work, instead we want to take it further and really focus on uniformity.”

She noted that there is much for racing to do in order for it to catch up with other sports in terms of uniformity.

“Our mission it to make the sport safer for horses and jockeys and to provide consistency and clarity around rules and consequences for racing participants,” Lazarus said. “Above all else, we must adhere to our mission of enhancing equine safety and the integrity of the sport. We believe that national uniform standards will benefit all participants who want to play by the rules and we approach the creation and implementation of the rules with a spirit of collaboration with the industry.”

The start date for HISA's Racetrack Safety Program is July 1 of this year. Lazarus said this program will have a significant impact on equine safety by establishing national standards for racetrack accreditation, expanding veterinary oversight, enhancing claiming rules, setting surface maintenance and measurement standards, collecting nationwide data and conducting research on medications, treatments, injuries and fatalities.

At the end of 2021, it was announced that HISA Authority was unable to reach an agreement with The United States Anti-Doping Agency (USADA) as an enforcement agency for the Horseracing Integrity and Safety Authority. Lazarus said to expect an announcement next month regarding an anti-doping control program, which will likely start in January of 2023. Until then, the states will continue with their own oversight.

Lazarus also discussed the economic impact that will come with the implementation of HISA.

“The cost allocation model approved by the FTC [Federal Trade Commission] accounts for the number of starts and the purse levels per start in each state to ensure that costs are distributed fairly and equitably across the board. We're going to work diligently to make sure that we use efficiencies and minimize costs. We are looking for supplemental funding to help the industry bear the cost of these rules and regulations.”

She continued, “The promise to you is that at HISA, we are going to do our very best. We really want this to work. We love this industry, we care about the horse and we recognize that many of you have spent your lifetime in this industry. We're going to do our best to get it right and our philosophy will always be to collaborate. Our one ask in return is that you would just give us a chance. We are going to do our very best to get it right, but we are going to make mistakes and we're going to have to look at things over again because this has never been done before. I ask that you give us a chance to get it right and that if you have a criticism, you tell us and give us a chance to fix it so we can work together. There's not going to be positive change unless it is done as an industry.”

Robert Lopez, Chair of the Washington State Horse Racing Commission and outgoing Chair of the ARCI, also spoke via teleconference about HISA in the opening session of the day, but pointed out that he had hoped a closer relationship could have developed already between the ARCI and HISA.

“We see many exciting possibilities to improve upon the good work that we collectively do,” he said. “But we also see how missteps and missed opportunities might make it more difficult for the industry and those in it to survive in the highly-competitive marketplace. During my tenure, we offered to help guide HISA through the maze of various state governments. We offered our best advise on how to make this all work, but [this advise] was often ignored. Perhaps it was the enormity of the challenge they face and the fact that almost all involved have never done this before. They are certainly within their rights to do so, but to ignore the wisdom of those who understand the challenges of the state government was inexcusable.

He concluded by saying that he hoped their partnership could improve in the future throughout the implementation of HISA rules.

“The HISA Racetrack Safety rules going into effect this summer are based upon the hard work that has been done by all of you [regulators] over the years as they have relied heavily on the ARCI model rules. We take that as a compliment. I trust that our new colleagues at HISA will come to the level of commitment and expertise we all share for the safety and honesty of the sport of horseracing and the welfare of both human and equine participants.”

During the day's second session, Dr. Susan Stover, a professor at the University of California at Davis School of Veterinary Medicine, Chair of the Racetrack Safely Committee and board member of the Horseracing Integrity and Safety Authority, gave a lecture on 'Protecting Our Horses.' She discussed current data on injuries and fatalities in horse racing, noting that almost all come from pre-existing conditions. She emphasized that if such conditions can be caught early, horses are able to return to the racetrack in many cases without issue.

The day's third session featured a panel of the Equine Welfare Committee.

Scott Chaney, the Executive Director of the California Horse Racing Board, spoke on the many changes that have taken place in California since 2019. He said that the year brought forth a watershed moment for the state not necessarily because of an increased number of fatalities, but because of increased media attention. Chaney said that in implementing new regulations, which have now proven to be successful, they focused on four different categories: medication control, identifying high-risk horses, education and research, and perception and transparency.

Scott Palmer, the Equine Medical Director of the New York Gaming Commission, represented the Mid-Atlantic Program.

In regards to medication, Palmer said that there was a significant decrease in the total number of positive tests in the Mid-Atlantic region in 2016 and 2017 following the implementation of their Mid-Atlantic Strategic Plan. Since then, the total number of positive tests were constant from 2017 to 2021 except for a decrease in 2020.

Ann McGovern concluded the panel as the representative for HISA's Safety Program, which goes into effect July 1. She said that the positive results outlined by Chaney and Palmer are an example of what can be achieved under effective regulations and noted that HISA looked at various pre-existing successes in the industry as they were outlining their program.

“We want to assist racetracks as they adopt the medication and safety standards that are outlined by HISA,” she said. “We want to provide educational opportunities for all the industry members and through research, we want to identify injury-reducing best practices. Our regulations rely heavily on the industry sending us data and we are requiring members of the industry to provide data.”

McGovern explained that with the collected data, HISA will conduct research to give input to the industry and make improvements. She added that the data will not be used to monitor trainers and veterinarians, but to give everyone more information.

John Roach joined McGovern on the panel to explain the different components of HISA, specifically the differences between Rule Series 2100 and 2200.

Roach said the 2100 series revolves around the accreditation process for racetracks, noting that every racetrack under HISA authority will be granted an interim accreditation as many racetracks will have work to do in order to meet HISA standards. Rule violations will not take place during that time as long as racetracks are working in good faith as they move forward to meeting the outlined standards.

“We realize that there are going to be tracks that this is going to be a bit of a heavy lift for,” McGovern said. “Most racing jurisdictions [present today] are meeting the majority of the standards already and I don't think it will be that difficult to get to standard of HISA if you are not already there, but for the smaller tracks that might find it more difficult, we're not going to ask them to have all this in place on July 1. What we're looking for is a good-faith effort to do what is necessary to save horses and reduce injuries in jockeys.”

In contrast, Rule Series 2200 includes rules that will be enforced starting on July 1. Examples of these regulations include the limited use of the riding crop, as well as enforcement of safety vests and safety helmets. These rules will be enforced with sanctions set forth in the regulations immediately upon implementation.

“We know that things change and as research tells us and as you tell us, these rules will evolve,” McGovern said. “If there's something we didn't get right, we are open to suggestions. We are working as hard as we can to get everything up and running, but the next steps are to education everyone in the industry as to what HISA means, what the regulations are, and what will be needed in order to comply. I think we're all in this for the same reason. We want to save horses lives, reduce jockey injuries and deter and remove the bad actors in our industry who make the good guys look bad.”

Monday's session concluded with a panel on the topic of if cheaters should be given a pass for cooperating, which featured United States Trotting Association President Russell Williams and Nebraska Racing and Gaming Commission's Executive Director Tom Sage, as well as a panel on Federal-Jurisdiction Cooperation in Canada with Canadian Pari-Mutual Agency's Executive Director Lisa Foss, Alcohol and Gaming Commission of Ontario's Director of Regulatory Compliance Brent Stone and Horse Racing Alberta's Supervisor of Racing Doug Fenske.

The ARCI conference continues on Tuesday.

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Straight Talk About HISA: NHBPA, ARCI CEOs To Appear On Kentucky Racing Spotlight This Friday

The Horseracing Integrity and Safety Act (HISA), legislation scheduled to go into effect July 1, will be the subject of a special edition of Kentucky Racing Spotlight this Friday from 6-7 p.m. ET on Louisville's ESPN 680 AM.

Eric Hamelback and Ed Martin, the CEOs respectively of the National Horsemen's Benevolent & Protective Association (NHBPA) and the Association of Racing Commissioners International (ARCI), will be the featured guests discussing one of the most fundamental changes to the administrative structure of horse racing in history. Peter Ecabert, the National HBPA's general counsel, also will participate.

HISA general counsel John Roach and the HISA Authority's interim executive director Hank Zeitlin declined invitations to take part.

“We look forward to opportunities for discussion with you after Lisa Lazarus takes on her role as CEO next month,” Zeitlin responded in an email.

Roach and Zeitlin referenced pending litigation as the reason for not participating. The National HBPA and 12 of its state affiliates have a lawsuit pending in Federal District Court in Lubbock, Texas. Additionally, nine individual states, along with two state racing commissions and the Oklahoma Quarter Horse Association, filed a separate suit in Federal District Court in Lexington, Ky.

The National HBPA believes HISA is an unconstitutional delegation of legislative authority to a private non-governmental organization – the Authority. The Kentucky HBPA, the radio show's presenting sponsor, did not join the suit, though it was represented on the National HBPA's executive committee that voted unanimously to pursue a legal challenge.

HISA is now the acronym for both the legislative act and the regulatory Authority the law created.

The HISA legislation was passed by Congress in late 2020 and included as part of a year-end spending and Covid-19 relief bill. The law grants the Authority broad powers to create, regulate and enforce rules with respect to medication/drug, safety and integrity matters for thoroughbred racing in the United States. The Authority is under the jurisdiction of the Federal Trade Commission, which must approve any regulations it proposes. Currently, regulations have been submitted to the FTC and published for public comment, others await submission, while no regulations have been approved or disapproved.

“We are less than 5 1/2 months from HISA's legislatively mandated implementation,” said Kentucky Racing Spotlight co-host Jennie Rees, a veteran turf journalist who works as a communications consultant for both the National and Kentucky HBPA along with other entities in horse racing. “Our show by design is not political. HISA is clearly a polarizing issue, but we thought this close to such a paradigm shift in thoroughbred racing that it was important to get straight talk, facts and informed perspective about what it means for the industry – including racing's consumers, the horseplayers – without the rhetoric or heated emotions.

“We are disappointed that HISA thus far has declined to participate. The invitation remains. I dare say the majority of racing participants – including many supporting or opposing the law – have no idea what is and isn't in the legislation. We wanted to take one step toward changing that.”

The National HBPA represents close to 30,000 licensed owners and trainers throughout America, making it the largest thoroughbred horsemen's organization in the world. ARCI is the umbrella organization of the official regulatory and rule-making bodies for horse and greyhound racing throughout North America and parts of the Caribbean. The organization's members heretofore were the only independent entities recognized to license, enforce and adjudicate matters pertaining to racing.

Kentucky Racing Spotlight, co-hosted by Joe Clabes, airs weekly through March 4 on ESPN 680-AM/105.7 FM, the region's sports-talk leader. The program also will be streamed live at espnlouisville.com, on the ESPN 680 app and the TuneIn and iHeart apps. The replay will be available on espnlouisville.com under the podcasts tab. All shows also are archived at davisinnovation.com/kyracing.

Kentucky Racing Spotlight is also sponsored by Davis Innovation equine marketing, the Louisville Thoroughbred Society and NKYTribune.com.

Previous shows archived at
https://www.davisinnovation.com/kyracing

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