Restraining Order Denied In HISA Lawsuit

A federal judge has denied a motion for a temporary restraining order in a lawsuit designed to keep the Horseracing Integrity and Safety Act (HISA) rules from going into effect.

The order, dated June 30 but posted to the court docket on the morning of July 1, the effective date for HISA's implementation, was handed down in the aftermath of a 35-minute Thursday afternoon conference call that was hastily arranged at the urgent request of lead plaintiffs from the states of Louisiana and West Virginia in their suit against HISA and Federal Trade Commission (FTC) representatives.

“Participants discussed the Motion for a Temporary Restraining Order and Preliminary Injunction pending before the Court,” wrote Judge Terry Doughty of U.S. District Court (Western District of Louisiana). “Plaintiffs and Defendants both expressed their views on the pending motion. The Court also expressed its view, which is that issuing a temporary restraining order regarding an Act of Congress would be inappropriate.”

The plaintiffs had argued in court filings that a restraining order was needed to stave off the “irreparable harm” from “illegal rules” and the resulting “chaos created by HISA.”

The Department of Justice, representing the FTC, responded with its own court filing that stated the plaintiffs' “eleventh-hour challenge” to a set of HISA rules that have been publicly known to be going into effect for at least three months is “an emergency of their own making.”

The judge also wrote that the two-week briefing schedule set by the court on Thursday will “remain in effect with regard to the Motion for Preliminary Injunction. The Court will decide the Motion on briefs. If the Court determines that oral arguments are necessary in order to make its decision, oral arguments will be set.”

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Feds: Last-Minute HISA Suit An ‘Emergency of Plantiffs’ Own Making’

A federal judge on Thursday opted not to immediately grant the “expedited consideration” restraining order or injunction that opponents of the Horseracing Integrity and Safety Act (HISA) alleged was needed to stave off the “irreparable harm” from “illegal rules” that are set to go into effect at midnight Friday.

But within several hours of learning June 30 that Judge Terry Doughty of U.S. District Court (Western District of Louisiana) had given HISA and other defendants two weeks to file a response to the restraining order motion, the lead plaintiffs from the states of Louisiana and West Virginia made a separate plea to the court, asking for an “immediate” status conference to address “the chaos created by HISA.”

The judge granted that request, and according to the court docket, a telephone conference was to have happened at 5:30 p.m. Eastern, some 6 1/2 hours before the first set of HISA rules was to go into effect. As of 7:30 p.m. Thursday, there were no notations within the docket that the court made any new orders as the result of that status conference.

For details on the new federal lawsuit filed June 29 that seeks to block the HISA rules from going into effect, click here.

“[T]hese issues are extremely urgent,” the plaintiffs stated in the motion requesting the urgent conference. “Plaintiffs face severe and irreparable harm if not granted a temporary restraining order before the legally deficient rules purportedly take effect tomorrow, July 1.”

The Department of Justice, which represents the Federal Trade Commission (FTC), one of the defendants in the case, stated in a June 30 filing that “The FTC Defendants oppose Plaintiffs' requests. The three rules Plaintiffs challenge were approved on [Mar. 3, Mar. 25, and Apr. 1], All three were stipulated to take effect on July 1 by statute. Plaintiffs' eleventh-hour challenge to those rules on the eve of the statutory deadline is therefore an emergency of their own making. Having waited three months to come to Court, Plaintiffs are not entitled to abrogate the two-weeks that the Court has already allotted Defendants for their response briefs.”

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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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Senators Send Letter to HISA, FTC About ‘Chaotic’ Implementation Process

Four U.S. senators, Chuck Grassley (R-IA), Joe Manchin (D-WV), Joni Ernst (R-IA) and John Kennedy (R-LA), sent a letter to the Federal Trade Commission and Horseracing Integrity and Safety Authority Monday asking for clarification and explanation about HISA's ability to meet its upcoming July 1 implementation deadlines for the Horseracing Integrity and Safety Act (HISA).

“The Authority publicly stated in a December 2021 press release that it will not implement the Anti-Doping and Medication Control program by the statutory deadline of July 1, 2022,” the letter said. “This deadline is statutorily required and neither the FTC nor the Authority have the authority to extend this deadline. The Authority's release also makes clear that the Authority has not submitted proposed Anti-Doping and Medication Control program regulations to the FTC in compliance with the statute. HISA required the Authority to issue the rule for Anti-Doping and Medication Control not later than 120 days before the program effective date of July 1, 2022. This deadline has passed, and it appears the Authority failed to meet the statutory requirements.”

The letter also raised questions about reports of the Authority delaying rules regarding riding crops and horseshoes, calling the implementation process 'chaotic' and as a result difficult to comply with for horsemen.

“Recent news reports also highlight that the Authority will postpone enforcement of newly approved rules regarding horseshoes and riding crop specifications, initially set to take effect on July 1, 2022 under the Racetrack Safety Program. This is also concerning because we understand the initial rules were functionally impossible for industry participants to implement due to limited supply chain availability of horseshoes and riding crops. This raises questions about what industry representatives were consulted in the drafting of the rule. And now, only one week before the rule was set to take effect, the Authority published a notice announcing a one month delay in enforcement of these rules. This chaotic implementation process and poor communication by the Authority makes it difficult for industry participants to comply with the new rules and regulations. Additionally, continuously changing implementation dates for new rules and regulations, and last-minute delays, cause more confusion and difficulty with implementation.”

The National HBPA applauded the letter Tuesday, saying in a statement, “Hardworking, day-to-day horsemen and horsewomen want safe and clean horse racing, and the Authority is failing in its duty to realize this goal. The Authority and HISA staff are populated with members who do not offer a true inclusive representation for the entire industry, and because of that we are seeing what lack of proper input from all participants causes. They are brazenly violating federal law by missing deadlines and staff are admitting in public forums that the FTC gave them permission to do so. We fully support Senator Grassley's efforts to find out why this is happening.”

TDN has reached out to both the FTC and HISA for comment.

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