HISA | Horse Racing Free Tips

FTC: Latest Anti-HISA Suit Doesn’t Come ‘Within a Furlong’ of Demonstrating Harms

The Arkansas-based lawsuit filed six weeks ago that is the most recent among five separate federal complaints attempting to derail the Horseracing Integrity and Safety Act (HISA) via alleged constitutionality claims was broadly rebuffed Monday in separate legal filings by the defendants in the case, who are executives with the HISA Authority and the Federal Trade Commission (FTC).

The plaintiffs, led by Bill Walmsley, president of the Arkansas Horsemen's Benevolent and Protective Association (HBPA), and Jon Moss, the executive director of the Iowa HBPA, had asked a judge in United States District Court (Eastern District of Arkansas, Northern Division) on Apr. 6 to declare HISA unlawful and to impose an injunction prohibiting the defendants from enforcing the Anti-Doping and Medication Control (ADMC) rules scheduled to go into effect May 22.

The HISA Authority's opposition brief stated that the plaintiffs in this case, much like those in the other four cases currently swirling in the federal court system, represent only “a faction of the industry long opposed to any change” who continue to “search for a favorable forum” by essentially making similar arguments in front of different judges.

And, the HISA Authority's filing pointed out, both Walmsley and Moss are already involved as parties who have taken various legal actions in three of the other four anti-HISA cases.

“Apparently discontent with those courts' rulings, the Iowa HBPA, Walmsley, and Moss now seek the same extraordinary relief here,” the HISA Authority's May 15 filing stated.

The HBPA-affiliated plaintiffs wrote in their complaint last month that HISA “barely pretends to comply with the Constitution's separation of powers. The Act allows a private corporation to issue binding rules with no guiding principle. The FTC's ostensible oversight serves as a mere mirage.”

The HISA Authority saw the situation differently in its filing.

“The vast majority of industry participants and horseracing states have welcomed the uniform national standards, which took effect on July 1, 2022. Two [presidential] administrations have now supported the law and two bipartisan Congresses have embraced it–including through a statutory amendment that reinforced the Act's constitutionality in December 2022,” the HISA Authority's filing stated.

“Plaintiffs come nowhere near the showing required for a court to dismantle this critical federal regulatory program. Most notably, Plaintiffs cannot demonstrate a likelihood of success on the merits: All four federal judges that have considered Congress's recent amendment to HISA have concluded that the Act is constitutionally sound,” the HISA Authority's filing stated.

“Plaintiffs next rely on a meritless public nondelegation claim that the challengers in the other cases wisely abandoned, or did not consider worth [pursuing], in light of the clear intelligible principles Congress provided,” the HISA Authority's filing stated.

“And Plaintiffs' final claim under the Appointments Clause is contradicted by the undisputed fact that the Authority is not a governmental entity [and] by the decisions of the two federal courts that have already denied the same Article II claim,” the HISA Authority's filing continued.

“None of the other preliminary injunction factors favor Plaintiffs, either. Plaintiffs fail to show irreparable harm: They have been subject to HISA's racetrack safety rules for over 10 months and to similar anti-doping rules under State law for years; purses in Arkansas and Iowa have surged; and the racing season in Arkansas has now ended,” the HISA Authority's filing stated.

“The balance of harms and the public interest also weigh heavily against disrupting a federal regulatory scheme that Congress has mandated (twice) and that has enjoyed substantial compliance already,” the HISA Authority's filing stated. “This Court should deny Plaintiffs' motion for a preliminary injunction.”

The FTC's May 15 filing put it this way: “[The plaintiffs] do not come within a furlong of demonstrating, with evidence, that any purported 'harm is certain and great and of such imminence that there is a clear and present need for equitable relief.'”

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An open letter to The Jockey Club from the U.S. Trotting Association

“Because a body of men, holding themselves accountable to nobody,
ought not to be trusted by anybody.”

~Thomas Paine (1791)

We did not anticipate reaching out to you, but we couldn't help reacting to the broadside that your president, James L. Gagliano, directed at the National Horsemen's Benevolent and Protective Association (NHPBA) on May 12 for having the temerity to challenge The Jockey Club's wounded sacred cow, the Horseracing Integrity & Safety Act (HISA). You didn't mention the U.S. Trotting Association (USTA) by name, but there's a clear implication that the USTA is one of those “unrelated, agenda-driven, special interest activist” plaintiffs that you flippantly accuse as trying to “hoodwink” the racing public. How ironic.

Let's set the record straight. First of all, the National HBPA is a plaintiff in only one of the five lawsuits challenging HISA, and the Fifth Circuit Court of Appeals unanimously agreed with their position and ruled HISA unconstitutional. The USTA is party to another lawsuit. Yes, there are lots more of us who stand up for our constitutional rights, including several state Attorneys General who were duly elected by the people of their states to protect their interests. There are 10 states in the case that see the same constitutional issues with HISA that we do.

You claim that HISA wasn't passed “in the middle of the night.” It was. Inserted at the 11th hour as a miniscule part of a 5,593-page omnibus spending bill that included COVID relief funds as its selling point, the bill was signed into law at 11:40 p.m. on the evening of Saturday, Dec. 19, 2020, just 20 minutes before the deadline for shutting down the federal government. This was made possible by a uniquely powerful senator from Louisville. The colossal document, described three days later in The Hill as “a pork-filled cluster filled with anything and everything that has nothing to do with the coronavirus pandemic or relief,” also included money to support gender programs in Pakistan, study a race riot that occurred in Springfield, Ill., in 1908, and develop a statement of policy regarding the succession or reincarnation of the Dalai Lama. We kid you not.

What HISA didn't get, at any stop along its five-year journey, was one minute of floor debate in the House or the Senate. That's right, this industry-changing bill was not debated by either the full House or Senate. Its passage was a result of the type of power play politics and backroom dealings that have, sadly, become the hallmark of The Jockey Club.

We say this because we did, indeed, meet with you on two occasions when you wanted our support. In September 2016, two Jockey Club representatives came to Columbus to “invite” the USTA to be part of what would eventually become HISA. We met again with a Jockey Club executive two months later in Louisville and indicated that we found the described legislation as being a bad fit for harness racing. Count us out, we said, and that was that. Or so we thought. In the spring of 2017, you gave us a courtesy call to say that, “Hey, we're introducing that bill in Washington, D.C. tomorrow, and, unlike our failed 2015 version that was limited to Thoroughbred racing, this one's open to all breeds, and there's a pretty good chance that you're getting pulled in. Welcome aboard!”

As with the harness racing industry, there are significant problems in Thoroughbred racing, but that's your business, not ours. It does puzzle us, however, as to why you dismiss out of hand the opinion of a Thoroughbred organization like the NHBPA, which has almost 30,000 members (and a democratically-elected board) who are the backbone of the industry, in favor of what your elite, private, invitation-only, 130-member club wants. Money talks, apparently, and quite loudly.

For five years, we asked how much HISA would cost. You never provided an answer, and you never asked for any public funding. Now we have a clearer picture – $66 million in assessments for Thoroughbred racing alone that have been pushed down to the states and horsemen. That's how much the Horseracing Integrity & Safety Authority, the privately-held monopoly that was formed as a result of HISA's passage, says it needs to operate in 2023.

Unlike state racing commissions, which are statutorily mandated to conduct their business out in the open, the Authority has no such obligation. Want to know how much the Authority's executives make? So do we, but they're not talking. What was discussed at the last board meeting? Your guess is as good as ours, because no minutes are made available. Want to review an itemized budget? They don't have to show you that. Think you can use the Freedom of Information Act to compel discovery of this information? Sorry, but it doesn't apply to private entities.

One last point about money. We took special notice of Mr. Gagliano's cavalier remark about how the various lawsuits “are driving up the industry's expense.” That's a coded threat to horsemen that if you keep trying to voice your opinion in the Courts, we're going to make you pay. Literally. Because, as with other unidentified assessments to the industry, “the industry” means the rank and file, the people in the trenches. “The industry” means the horsemen.

HISA is, for now, the law of the land, but was going nowhere on Capitol Hill until Thoroughbreds tragically started breaking down and dying at Santa Anita in 2019. We heard over and over how this legislation was needed to make horse racing – excuse us, Thoroughbred horse racing – safer. But it hasn't, and it's quite unlikely that the full implementation of the medication control program, portions of which are already in place at the major racetracks, will have any appreciable effect. For five years (and still today), we asked how HISA would be an improvement. We're still waiting for an answer, and the evidence suggests quite the opposite. As the Authority admitted, Churchill Downs was in “full compliance” with HISA rules and processes during Kentucky Derby week. The recent spate of equine fatalities there is not, as Mr. Gagliano says, “unfortunate.” The casualties are appalling and they keep happening at alarming rates.

HISA failed to prevent seven deaths at Churchill Downs during Derby Week. Another horse broke down and was euthanized on Sunday. That's a fact that none of Mr. Gagliano's bluster can change. HISA is not the solution. It never was, and it never will be. That's why we're working to introduce a federal bill that will better serve racing's needs.

The bottom line? HISA is a terrible fit for harness racing, and one that has been foisted upon the sport by one of those “agenda-driven, special interest, activist” groups about which you, The Jockey Club, have so graciously deigned to warn us.

Namely, yourselves.

To read the May 12 statement from James L. Gagliano, president and chief operating officer, in Support of HISA, click here.

Dan Leary
Director of Marketing and Communications

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Eric Hamelback: Now Is Not The Time To Go Low Or Assign Blame

National HBPA CEO Eric Hamelback response to Gagliano's statement:

While we will not respond in a tit-for-tat with The Jockey Club, we want to make one thing abundantly clear. That is to quote the Authority's own statement in response to these tragic deaths last week: “Churchill Downs has been cooperating with HISA since its inception and is in full compliance with our rules and processes.” To suggest that these deaths were somehow attributable to the HBPA is simply wrong. HISA clearly stated in its own press release that Churchill Downs has been and is in full compliance with the HISA rules, and HISA has been the law of the land for almost a year. To insinuate any other narrative is backwards and is shameful coming from those who wanted and did gain control of the regulations of this industry.

The National HBPA has never done anything more than insist that the regulatory authority writing the rules for this industry be structured in a way that respects the constitutional rights of all horsemen and be operated in a way that is transparent, responsive and accountable. We will continue to fight for these rights in court. We believe the best path forward for the industry — the best way to keep our horses and their humans safe — is a regulatory framework built on those principles: transparent, responsive, accountable, constitutional.

Now is not the time to go low, point fingers or assign blame. This is a time to come together as an industry, not to drive a deeper wedge with personal attacks and gratuitous insults. Both sides' lawyers should make their best arguments in court, while outside the courthouse we all work together to keep horses safe under the governing rules.

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James L. Gagliano

It has been increasingly difficult to watch as the opponents of the Horseracing Integrity and Safety Act of 2020 (HISA) continue to ramp up their campaign to see it derailed. Much like throwing spaghetti against the wall to see what sticks, they continue to pitch mistruths and diversions and file myriad lawsuits across the nation in an attempt to get something to stick in the minds of lawmakers, judges, and policymakers.

I would like to set the record straight about HISA and to comment on its opponents' most recent actions.

Over the past months these opponents, principally the National Horsemen's Benevolent and Protective Association (NHBPA) and a handful of state racing commissions have trafficked in a series of mistruths and fabrications to try to hoodwink members of the racing industry and the public to oppose HISA. All this is underwritten by a couple of unrelated, agenda driven, special interest activist groups, which have zero involvement in our sport and have no interest in its long-term viability.

They have argued that HISA was passed in the “middle of the night” in 2020. It wasn't. It's first form of a bill was introduced in 2015 and re-introduced in 2017 and 2019, it received hearings in Congress, was carried forward by a House Committee in 2020, and was, in September that year, passed unanimously by the House of Representatives as a stand-alone piece of legislation. A month later it was passed by the Senate as part of a larger bill, due to the expiring legislative session.

Opponents also claim to not have had input into HISA. Nonsense. As someone fully involved in the development of HISA, I can attest to the countless times horsemen's groups and racing commissioners, specifically, met with backers of the bill and its original sponsors. In fact, I recall flying leadership of the NHBPA to Colorado Springs to meet and discuss the bill. I'll foreshadow the rest of this essay by sharing that at that time counsel for the NHPBA said their most significant concern was including anything in a bill that would open the Interstate Horseracing Act of 1978 (IHA) to any form of amendment or tampering. We've spoken with them in closed rooms and debated them in public for years – but somehow, they were “never included.”

Against this background of spin and untruths, the opponents have become serial litigators: they have filed six federal lawsuits across the nation – making redundant claims in each – in an effort to find the “right” federal appeals court to find HISA unconstitutional.

Thus far, the opponents have failed in the U.S. Sixth Circuit, which in a comprehensive and well-reasoned opinion found HISA to be constitutional. Last week, they failed again when a federal district court in Texas issued another extensive opinion finding HISA constitutional. The opponents are going to take another shot at it with the U.S. Fifth Circuit Court now that the court's earlier decision on HISA has been made moot by way of a legislative amendment in December. Not being content with these bites at the apple, opponents have recently filed additional nearly identical lawsuits within two other federal circuit court jurisdictions.

While helping plaintiff's lawyers live their dreams, the HISA opponents expend great energy complaining about how much HISA might cost. While assessments will continue to be fine-tuned – one thing is for sure, they are driving up the industry's expenses by continuing to sue with no end in sight.

All this brings us to this past week. Once again, the challenges facing our athletes and our industry have come to the forefront – directly to a national audience at the time of our sport's biggest event. Following the unfortunate equine fatalities at Churchill Downs, and the massive national media attention it garnered, opponents of HISA have chosen not to get behind a collective effort to solve these issues but, instead, to break down the industry's best hope for ensuring horse safety and industry integrity. Early this week, they continued their scorched earth efforts to derail HISA in favor of maintaining the status quo by immediately seeking an injunction against the rollout of the HISA anti-doping and medication control program on May 22. This, despite the fact that the very same court they are asking for the injunction just found HISA to be constitutional.

These injunctions take a toll. One judge delayed HISA's implementation of its medication program by a month, making it impossible to begin before Derby week. HISA will not be fully implemented until later this month now, due to the NHBPA. Would a unified, independent medication and track safety program have made a difference? Thanks to the NHBPA, we will never know.

Most organizations would have kept a low profile after such an embarrassment. Not the NHBPA, they doubled down. They got their few supporters in Congress to prepare legislation that would immediately repeal HISA and offer the illusion of a state compact-based regulatory model. The draft legislation would enable states to choose to keep the current state-by-state regulatory approach or create a regulator whose board of directors would be hand-picked by state commissions – under rules that specifically allow the directors to have conflicts of interests. The medication regulation by compact regulatory model is a recycled version of an idea first trotted out by the Association of Racing Commissioners International in 2010 and which has continued to be touted by opponents to HISA since. Obviously, it hasn't worked yet, and it will not work in the future.

Further, this trojan horse of a bill takes a carrot and stick approach that would put simulcast wagering across the U.S. at risk of an immediate and summary cessation. Under this bill, if two states enter into a compact to create the conflicted new regulatory body ALL other states would be forbidden from simulcasting until they enter into the compact as well. As I foreshadowed earlier, NHBPA's lawyer told us years ago that anything touching the IHA was an absolute no-go for them – now that they are blinded by their hate for HISA, they seemingly no longer care. This “we have to destroy the industry to (possibly) save it” approach is an absolute affront to everyone in our industry – those who support HISA and those who do not.

The horses that perished last week have recent racing histories within numerous states for which there is no single regulator that has the ability to conduct complete cross-border investigations. HISA changes this dynamic. Under the HISA opponents' preferred approach, each state is an investigatory island, limited to inquiries within their own borders. One would think that the NHBPA would want the fullest possible investigations in support of their members who lost horses – and to avoid the same things happening to other horses in the future. They focus instead on hobbling HISA while leaving their constituents and our equine and human athletes at continued risk.

I've spent every living moment of my professional life working in this industry, in many roles, including at some of the smallest tracks and the largest. It's a sport I have loved since I was a child, and it remains with deep roots among my friends and family. Racing safety and integrity are matters concerning everyone at all levels of the game – and to so many outside of it. Who among us in the sport didn't hear over the last few days: “What's going on with horse racing?” and “What can be done to fix it?” The answer is clear: HISA.

Unlike what the opponents of HISA are peddling, the industry should embrace the opportunity to safeguard our horses and our game by moving forward with HISA, not taking a trip backward to the tired and worn-out programs of the past.

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