HISA | Horse Racing Free Tips

Q&A with HISA’s Lisa Lazarus: Part One

Last week, an important piece of the Horseracing Integrity and Safety Act (HISA) puzzle was slotted into place when the Horseracing Integrity and Safety Authority's board of directors announced that Drug Free Sport International (DFSI) had been selected as the enforcement agency for the Anti-Doping and Medication Control (ADMC) arm of the program.

DFSI has helped administer drug testing programs to a slew of human sports organizations, like the National Football League, NCAA, National Basketball Association, Ladies Professional Golf Association, the PGA Tour, NASCAR and Major League Baseball.

Last week's announcement included a new wrinkle in the enforcement side of the ADMC program: DFSI will establish the Horseracing Integrity and Welfare Unit (HIWU), led by a five-member advisory council.

To discuss DFSI's newly minted role within HISA, the evolving shape of the ADMC program and implementation of the safety program on July 1, TDN spoke with HISA CEO Lisa Lazarus. The following has been edited for brevity and for clarity.

TDN: Why did you choose DFSI as the enforcement agency over some of the other possible organizations touted?

Lazarus: The first and most compelling reason is that they have a tremendous amount of experience in drug testing and test planning. As you would know by now, they handle all of the drug testing for the NFL, for the NBA, for Major League Baseball, NCAA, PGA Tour, NASCAR. They really have a wide range of experience, and they've operated in some really very challenging circumstances.

There's going to be a heavy lift, right, to get this all done by Jan. 1. [But] the amount of testing in horse racing is going to be at around the level of what [DFSI are] doing right now, if you add all their testing together. They do more human testing than any other agency in the U.S.

Sarah Andrew

The reason why I was also really impressed with them and convinced that they could make it happen is that around the time that COVID began–and a lot of these testing agencies realized that without sport they'd be really challenged, sort of economically–was [DFSI] quickly dovetailed to COVID testing. They very quickly launched a very good and effective COVID testing program that helped bring a lot of the major sports back into operation. What they were able to show us about how they made that happen in a relatively short timeframe, how successful it was, was one of the things that convinced us that they'd be up for the job.

The other thing was the value proposition. Ultimately, it's the industry that's funding HISA, and so, we want to be sure that whatever money we're spending, we're spending efficiently and wisely. That there's a good value proposition there. We felt that they did. And they also embraced the concept that we had to create this Horseracing Integrity and Welfare Unit, which I modeled after very successful international units, like the Athletics Integrity Unit, Tennis Integrity Unit. It's been the new wave in the last five or so years, and I really love the idea of trying to make that happen for horse racing. They've shared that vision and we're happy to get behind it and support it.

TDN: The Horseracing Integrity and Welfare Unit–this five-member advisory council–what is their role exactly?

Lazarus: So, the way that it's working is that HISA has entered into a contract with the Center for Drug Free Sport, and the Center for Drug Free Sport is creating this Horseracing Integrity and Welfare Unit. There are a couple reasons why we're doing it this way.

One is the horse racing testing business essentially is so big that it really requires, we believe, its own separate entity and its own sort of separate business model. Also, DFSI did not have sufficient existing expertise in some of the areas that we required to run the program effectively…

TDN: Which areas are those?

Lazarus: Those would be prosecutions, like result management–they didn't have an existing legal staff to carry those prosecutions out. Just take a step back for one second. It's very unusual for the testing agency to also do the prosecutions–[DFSI are] not doing that for other clients. That's something we have to build separately. We [also] wanted to put a lot of resources into investigations and they didn't have sufficient in-house resources for investigations.

So, by building this integrity unit, it's allowing us to hire and bring people in that have expertise in those areas.

TDN: You've said the new unit will require 32 employees to do everything from lab accreditation to results reporting, investigation and education. So, those 32 employees will fall under the remit of the Horseracing Integrity and Welfare Unit?

Lazarus: Correct. While some of those employees are existing Center for Drug Free Sport employees that will move over, it's going to be a separate unit that operates on its own. The advisory council is essentially like a smaller board that has the expertise in each of these different pillars to help guide the full-time employees.

TDN: But ultimately it's DFSI who will sign off on whatever the advisory council suggests?

Lazarus: Yes.

Sarah Andrew

TDN: How far along are you in getting that 32-strong workforce together?

Lazarus: I would say we have about half of the key people and I expect in a couple weeks from now, we'll have all of the top people identified and agreements reached with them.

To hire the more junior workers below might take a little bit more time, but we don't expect those to be as difficult to fill–[those are] people that you need to execute the testing, some regional directors and all that. That might take us another few weeks after those two weeks, but I'm confident we're going to have everyone in place by the end of the summer.

TDN: Do you have an idea of cost?

Lazarus: If you saw the budget that was made public, you would see that there's about $5 million to $6 million in anti-doping startup costs for 2022, which also includes some tech costs, because there's various apps, things that we're going to need to build. For 2023, we don't have those costs yet because part of what we want the advisory council to help us decide is the optimum level of tests.

There are three categories of tests in horse racing. We have your out of competition, you have your TCO2 for milk shaking, and then you have regular race-day testing. We have some research and some ideas of what those numbers are optimally, but that's part of what the advisory council is going to help us decide. It'll also involve some determination around what's the right amount of money to spend on investigations. That's part of their role.

TDN: With less than two months to submit the ADMC rules to the Federal Trade Commission (FTC), specifically, what parts of the materials that U.S. Anti-Doping Agency (USADA) has put together will DFSI use?

Lazarus: Something like 90%. I mean there's only 5%, 10% where we're actually going through to make sure that we haven't missed anything, that everything is fit for purpose.

TDN: Will DFSI take a binary approach to regulating medications like USADA outlined with primary and secondary substances? Or will it look more like the Association of Racing Commissioners International (ARCI) model rules' alphanumeric system?

Lazarus: It'll be 100% only based on the [World Anti-Doping Agency (WADA)] code system, right? You saw the drafted rules and proposed rules that were based on a WADA code philosophy structure but were modified to be sensible for horses. So, that's essentially what it's going to look like. It will not be the ARCI model rules. There are some things in the ARCI model rules that are working really well, that we're going to borrow and integrate, but the system itself is going to be a WADA-based system, philosophically.

TDN: How far along are you in putting together the regulated therapeutics list?

Lazarus: That is something we hope to have together by the end of the summer. That's not something that's going to be subject to review.

TDN: Not?

Lazarus: I'm sorry, we're not going to be ready to release that list when we release the [ADMC] rules for public comment. But everything [ultimately] has to be approved by the FTC. I didn't mean to suggest that wasn't the case.

Coglianese

TDN: Some industry stakeholders have voiced concern about transparency aspects of the USADA materials. For example, “A” sample results aren't necessarily going to be made public until the “B” samples are returned. Is that something DFSI will address?

Lazarus: Yes, that's something that we're still discussing. We recognize how important transparency is. I come from the International Equestrian Federation and their system is to publish as soon as the A sample results are available. They're published unless it involves a minority, so a child, basically. That's a system I personally favor, but we're still evaluating what the right system [is] going to be for this program.

TDN: What laboratories will be used come Jan. 1? Will DFSI bring in its own set of labs?

Lazarus: No. So, the way the system is built is to allow for some fluidity so that we don't have any problem to be up and running January 1st. The law actually provides that any lab accredited by the RMTC [Racing Medication & Testing Consortium] will have a one-year provisional accreditation while we start accrediting the labs. There are nine labs that are currently accredited by the RMTC.

TDN: Does the variance in testing capability between those batch of labs pose any legal liability under this uniform banner?

Lazarus: You raise a really good question. That's something that is going to be a part of the program, which is the harmonization piece. We're going to require the labs to be harmonized, so that they [ultimately] reach agreement where screening limits are consistent from lab to lab once they're reaccredited. It would not be a success if labs had different levels of positive test assessments. If the levels or the testing had any discrepancies, that wouldn't be optimal, obviously, so that's something that we're going to work very hard at achieving.

TDN: How quickly are you hoping that harmonization process to occur?

Lazarus: Obviously as soon as possible. That's not my area of expertise. We have Dr. Larry Bowers [former chief science officer at USADA], who's going to be our resource in that regard. I don't know off my head, but obviously we're hoping to work toward it quite quickly. And we also hope that with a smaller number of labs that are accredited, that will be something achievable [without] a whole lot of difficulty or challenge.

TDN: You had talked before, prior to DFSI coming on board, about the whereabouts program being phased in over time. Is that still the case?

Lazarus: Yes, we're looking at the optimal whereabouts program. It's something that we hope we'll be able to get off the ground fairly quickly. The question is: Given that most horses are stabled at the race tracks, what does a whereabout system really need to be?

A horse that needs to be available for testing [within] several hours notice, we need to know where the horse is. But we've realized, and as we've thought through this, that for the vast majority of horses, we already have that information. So, it's going to take us a little bit of time to figure out what the best program is, but we do expect to have one within the first couple years.

Coady

TDN: 5 Stones intelligence (5Si) is going to be bought on board as an investigative body. What layers of transparency will surround the investigative work that 5 Stones does to make sure that that work will hold up legal scrutiny?

Lazarus: The first thing I'll say is that the reason why we thought it just made a lot of sense to involve 5 Stones–and they were eager to be supportive–is that there already are entities like The Jockey Club [and] The Meadowlands that have spent considerable amount of funds to have 5 Stones investigate actors in racing. So why wouldn't we want to take the benefit of their knowledge, their research, their information base to help us?

From my standpoint, with regards to the Horseracing Integrity and Welfare Unit, our job is not to prosecute actors, or to make sure things stand up in court. The way that we'll use the investigative resource is to try to help us figure out who the cheaters are and what they're using and when to test them and for what. And that's how we'll mostly use the investigative resource.

Obviously, if they're used for prosecutions, I think they're fairly capable and also experienced at making sure that evidence is strong. But for us, it's really about getting the information that allows us to test in a way that's really efficient.

If you test humans, horses, anyone without that investigative resource, you usually have about 1% to 2% hit rate in terms of positive tests. When you use investigative resources, that goes up to 15% to 20%. So, it's a huge difference.

TDN: It's been discussed how a centralized database could be used to identify outliers, potential cheats and whatnot, as well as to help with the safety side of things. How far along is that database from being fully built and operational?

Lazarus: In one way we're far along and one way we're not far along at all.

We've already started the process of registering horses, so the database is live, it's available. If you go to our website, you could register yourself and your horses. But we don't have a huge body of data yet because the registration processes just started in the last couple of weeks.

However, come July 1, if you want to participate in the covered horse race, which is in any horse racing jurisdiction that exports their signal, then you'll have to register with us. So, we expect, in a few months, to have a very considerable database. Then we'll let the veterinary experts help us figure out how to use it in a way that's going to help horses, help keep everyone safe.

TDN: Do you have a rough date with which you'd like to see something really substantive up, a close approximation of an ideal end goal for this database?

Lazarus: I think a year from July 1 [2022]–which is our deadline [for implementation]–we'll be in a position to really have the data that we need to perform the sort of analysis that we think will make a difference. Two or three years down the line, it'll be even better.

Note: Part two of this Q&A will encompass the working relationship between the Authority and DFSI, media criticisms of the new enforcement agency and potential problems when HISA launches in less than two months.

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HISA Tabs Drug Free Sport International as Enforcement Agency Partner

Edited Press Release

The Horseracing Integrity and Safety Authority's (HISA) Board of Directors has selected Drug Free Sport International (DFS) to build HISA's independent Anti-Doping and Medication Control (ADMC) enforcement agency. The decision followed months of discussions with several potential enforcement agencies and marks another major milestone in the implementation of the Horseracing Integrity and Safety Act.

HISA sought out DFS given its history of drug testing and enforcement partnerships with leading sports organizations, including the National Football League, NCAA, National Basketball Association, Ladies Professional Golf Association, PGA Tour, NASCAR and Major League Baseball. DFS will establish the Horseracing Integrity and Welfare Unit (HIWU), led by a five-member Advisory Council, to serve as the new ADMC enforcement agency for Thoroughbred racing.

“I am thrilled that Drug Free Sport International is partnering with us to serve as HISA's independent ADMC enforcement agency by establishing the Horseracing Integrity and Welfare Unit,” said HISA CEO Lisa Lazarus. “DFS is an established leader as demonstrated by its success and ongoing engagement with several U.S. and international sports organizations and leagues. HISA and HIWU intend to work closely with state racing commissions to establish a comprehensive and robust program that includes uniform testing protocols, adjudication processes and enforcement mechanisms to increase accountability and enhance the integrity of the competition for participants, fans and bettors.”

“We look forward to working with DFS and the Horseracing Integrity and Welfare Unit to level the playing field for the overwhelming majority of racing participants who follow the rules while identifying and holding accountable those who attempt to violate them,” said Adolpho Birch, Chair of HISA's ADMC Committee and Senior Vice President of Business Affairs & Chief Legal Officer for the NFL's Tennessee Titans. “HISA also recognizes and thanks Travis Tygart and USADA for their collaboration and leadership in crafting the proposed regulations that will serve as the foundation for our work moving forward. Together with their efforts leading to the passage of HISA, they have left an indelible mark on horseracing and horse welfare.”

“On behalf of the entire DFS team, we are excited to expand our work to safeguard the integrity of sport into thoroughbred racing,” said Chris Guinty, CEO of DFS. “Creating a new enforcement agency is a significant task, but we are starting from a strong position thanks to the efforts of so many to date.”

The HIWU will be chaired by Jonathan Taylor QC, a London-based partner and leader of the Sports Group at the international law firm Bird & Bird. Taylor has a deep and extensive background in anti-doping issues in international sports, including previously serving as the chair of the World Anti-Doping Agency's (WADA) Compliance Review Committee, an independent Standing Committee under WADA's Executive Committee. Taylor is also long-standing outside legal counsel to the International Equestrian Federation and the British Horseracing Authority.

“I'm honored to be joining Lisa, Adolpho and the entire HISA team as they work with DFS to develop and implement the first-ever national uniform anti-doping and medication control standards for Thoroughbred racing. These standards will meaningfully enhance the integrity of U.S. horse racing and help to ensure a robust future for the sport for generations to come,” said Taylor.

In addition, HISA announced the appointment of four other members of the HIWU Advisory Council, including:

Larry Bowers, former Chief Scientific Officer at USADA; during his time at USADA, Dr. Bowers played a significant role in developing the first ever WADA International Standard for Laboratories and established research funding programs for both USADA and the Partnership for Clean Competition. Prior to joining USADA, Dr. Bowers made groundbreaking contributions to anti-doping science.
Larry Bramlage, DVM, MS, DACVS, equine orthopedic surgeon at Rood & Riddle Equine Hospital; Dr. Bramlage serves on the board of the Grayson-Jockey Club Research Foundation and has received numerous awards, including the American College of Veterinary Surgeons Legends Award, The Jockey Club Gold Medal and a British Equine Veterinary Association's Special Award of Merit, for his work.
Sonja Keating, General Counsel, United States Equestrian Federation (USEF); Keating has been with USEF for more than 15 years and previously practiced litigation in the Lexington office of Dinsmore & Shohl, LLP.
Günter Younger, Director of Intelligence and Investigations at WADA; prior to joining WADA, Younger served as the Head of the Cybercrime Division at the Bavarian Landeskriminalamt (BLKA), in Germany. During this period, he also served on WADA's three-member Independent Commission that investigated and exposed widespread doping in Russian athletics.

It is expected that the investigative function will be supported by 5 Stones intelligence, a leading professional services company comprised of former DEA, FBI, IRS, ATF, and NYPD Special Agents and Detectives who have led some of the largest sports investigations in history. Information from 5 Stones played a role in the federal indictments of several dozen people involved in horse racing by the United States District Attorney, Southern District of New York.

“We are deeply grateful to the members of the HIWU Advisory Council and to 5 Stones for lending their expertise and hard-won experience in support of our effort,” said Lazarus.

Working extensively with USADA and a wide range of industry stakeholders, HISA has already developed comprehensive draft ADMC rules. HIWU and HISA will build on that foundation in the coming weeks and will release updated draft rules for industry and public comment later in May. The draft rules will be presented to the HISA Board of Directors for approval and then submitted to the Federal Trade Commission (FTC) by July 1 to initiate its rule-making process with the goal of implementing the FTC-approved program on January 1, 2023.

Statement from Breeders' Cup Ltd:

“Breeders' Cup strongly supports HISA entering into an agreement with Drug Free Sport International (DFS) to build their independent Anti-Doping and Medication Control enforcement agency. DFS has a long track record of success in drug testing and enforcement at the highest levels of professional sports, including the NFL, NBA, MLB, PGA Tour, LPGA, NASCAR and NCAA, and they will help HISA protect the health and safety of equine athletes and enhance the integrity of racing. We are greatly encouraged by the formation of the new Horseracing Integrity and Welfare Unit (HIWU) and by the exemplary Advisory Council chosen to lead it. From its beginnings, HISA has shown professionalism and leadership, and today the Authority continues to take critically important steps forward in fulfilling its mission. We look forward to the law's full implementation in 2023.”

Statement from National Thoroughbred Racing Association:

“Drug Free Sport is a known leader in drug testing and enforcement in sports and we are thrilled to see HISA partner with this expert organization to operationalize their Anti-Doping and Medication Control program and create the Horseracing Integrity and Welfare Unit,” said NTRA President & CEO Tom Rooney. “We all share HISA's goals of protecting equine athletes and raising the bar for integrity in racing, and with the help of DFS, HISA is well on its way to doing just that. I commend Lisa Lazarus and the entire HISA Authority on all their hard work and due diligence in meeting this important milestone under the law.”

Statement from The Jockey Club:

“The Jockey Club applauds today's announcement from the Horseracing Integrity and Safety Authority (HISA), which named Drug Free Sport International (DFS) as the organization to develop HISA's Anti-Doping and Medication Control enforcement agency. DFS has an impressive track record in handling drug testing management in a range of sports, and its partnership with HISA is another critical step toward creating a gold standard of integrity and welfare in Thoroughbred racing. The Jockey Club has believed for years that reforms in safety, integrity, and welfare are necessary for the sustainability of our sport. We look forward to following the progress of DFS and supporting the efforts of DFS and HISA with any resources we can provide.”

Joint Statement by Thoroughbred Horsemen's Associations, Inc, Kentucky Thoroughbred Association, Thoroughbred Owners and Breeders Association:

HISA represents a critical turning point for the industry. Its implementation provides the best opportunity for us to change the perception of our sport through our collective efforts to protect the health, safety and welfare of the horse and rider and the integrity of horse racing.

We commend the HISA Board for its deliberative approach towards the establishment of the most practical and effective Anti-Doping and Medication Control Program of any sport. HISA's partnership with Drug Free Sport International, and the creation of the Horseracing Integrity and Welfare Unit, fulfills the industry's need for an effective, independently controlled enforcement agency that will build upon and improve Thoroughbred racing's well-established medication and anti-doping rules, bring long-sought uniformity, oversee and improve our testing system, implement a streamlined, but fair adjudicatory process, and develop a new investigative arm that the industry once had but lost.

While some may be disappointed with HISA's decision, we believe it is entirely consistent with the enabling legislation and the intent of those who were responsible for its development. We look forward to working with the DFSI team and the HISA Board and will offer whatever resources and support we can to fulfill the fundamental goals of equine health and safety and the integrity of racing.

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West Virginia in Limbo Over HISA

The West Virginia Racing Commission (WVRC) on Tuesday opted to take no action either way on whether to collect and remit fees on behalf of the new Authority created by the federal Horseracing Integrity and Safety Act (HISA).

States are facing a May 1 deadline to declare “in or out” middleman status pertaining to the safety portion of the HISA program that will go into effect July 1. This first phase-in of oversight does not include HISA's drug testing and medication control programs, which aren't expected to be up and running until 2023.

“I'm not going to make a decision to say yes to that today,” said WVRC chairman Ken Lowe Jr., adding that he wants feedback from the state attorney general and/or the governor's office on how to proceed on the matter.

Over the course of the past year, Lowe has repeatedly spoken out against HISA, portraying it as a federal statute crafted by elitists within the racing industry whose interests aren't aligned with the realities of small-circuit racing in West Virginia.

But since the input that Lowe wants from West Virginia's state officials is unlikely to materialize in the next four days, the HISA Authority will likely treat the WVRC's in-limbo response to the May 1 opt-in deadline as a “no.”

According to WVRC executive director Joe Moore, “The one real issue here by not agreeing to it, what [the HISA Authority] will do is now pass [responsibility and costs] to each of our tracks, Charles Town and Mountaineer.”

Last week California and Minnesota became the first two state racing commissions to agree to work with HISA by paying their pro-rated portions of costs. They also have to figure out how to use state employees (like stewards) to enforce federal-level safety rules (like whip-use guidelines).

Racing commissions in New Jersey, Maryland and Texas have already said no to HISA, with several citing as a reason that they don't have the statutory ability to make budgetary and spending changes that involve federal or private entities.

West Virginia is also a plaintiff in an active federal lawsuit joined by several other states aiming to get HISA voided for alleged constitutional violations before the Authority even goes into effect.

That case is currently facing a motion to dismiss; it is separate from the federal lawsuit spearheaded by the National Horsemen's Benevolent and Protective Association (HBPA) that got thrown out of court several weeks ago.

Charles Town HBPA president Jim Miller told commissioners that HISA was “a great overreach” that amounted to an “abomination.”

But Miller was also cognizant that by not signing off on acting as an intermediary, the WVRC will be essentially passing on the Authority's costs to the horsemen on a per-start basis.

“If [the commission or the tracks] don't pay HISA, we lose our right through the Interstate Horse Racing Act to simulcast, which, of course, is a big issue for us as well,” Miller said.

“We're looking at what revenues we trade one way to go the other way,” Miller continued. “This will be a big burden for both the tracks and a huge burden on horsemen. We definitely cannot afford it at a time when, hay, oats, feed, veterinary; all those costs have gone up dramatically in the past couple months.”

Moore also articulated a concern that opting into the safety part of the Authority's program would bind the WVRC to also go along with the medication and doping controls, too.

“We can't even tell anyone how much this is going to cost,” commissioner J.B. Akers added, alluding to the drug and medication control assessments that would follow.

Akers also questioned “the so-called equitable nature of this assessment,” which he said seemed to be calculated too high for a relatively small state like West Virginia.

Added Moore: “This is a mess whether you agree to do their work for them [via] this voluntary agreement or not. Because whether or not our stewards are carrying out their functions, if here's a violation under their code, the recourse of appeal is not to our stewards at Charles Town or Mountaineer Park. It automatically goes to a HISA-appointed Authority.”

With regard to the costs borne by the horsemen and the tracks, Moore said there could be a possible state legislative solution in the pipeline, but that it would be at least two years before it could be implemented.

Tracks and horsemen having to pay directly “could be avoided in future years should we all agree on some additional revenue stream to the racing commission passed through legislation,” Moore explained.

“We could work together on figuring out a revenue stream that gave the racing commission an amount of money to absorb that assessment that would then come back from the racetracks and the horsemen [in a way that] wouldn't be as sudden and impactful as maybe just a direct assessment,” Moore said.

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California First State to Opt Into HISA

California became the first state to opt into the Horseracing Integrity and Safety Act (HISA) enforcement structure on Thursday when the California Horse Racing Board (CHRB) voted 7-0 to collect and remit fees on behalf of the new federal HISA Authority.

For 2022, HISA has assessed California's portion of the Authority's budget to be $1.4 million, a figure that is based on starts and purses, and amounts to roughly 10% of the overall nationwide budget. It includes only the safety portion of the HISA program that will go into effect July 1 (and not the still-in-limbo drug testing protocols that won't yet be up and running).

California will fund its commitment by recalculating market access fees derived from advance-deposit wagering (ADW).

Commissioners articulated a consensus during the board's monthly meeting that if the CHRB didn't proactively step up to support HISA, the state's tracks, horse owners, and other industry stakeholders would have to not only pay the costs, but figure out how to set up and staff a new infrastructure to enforce the federal regulations.

“We had a meeting with associations, owner groups and the California Thoroughbred Trainers last week,” said CHRB executive director Scott Chaney. “And most voiced support for this. Because tracks, it's my impression, don't want to be burdened with getting a bill and having to figure out who's going to pay it and how they're going to pay it.”

The unanimous Apr. 21 vote was conditional upon receiving statutory approval to allow state employees to enforce federal rules and to make budgetary and spending changes that the CHRB is not yet able to do.

“We, the CHRB, do not currently have that authority,” Chaney said. “But we are seeking it through budgetary language, which would amend the Business and Professions Code to allow us to do this, in addition to a budget change proposal, which would give us the spending authority to include the Authority's fee in our budget.”

Chaney underscored to commissioners that he does not expect that process to be complicated or cumbersome. It will likely be accomplished by attaching what is known as a “trailer bill” to the state's annual budget legislation.

Chaney added that government officials have been made aware by CHRB staff that the HISA changeover is in the pipeline, and that agencies he's dealt with have been “really accommodating,” to the point that he is “hopeful that it wouldn't be a big deal.”

Commissioner Wendy Mitchell termed partnering with HISA as “a no-brainer, only because if we don't opt in, then [the responsibility will] go directly to the tracks and we don't have a say. And certainly, you know, you can't fight city hall. So we should be part of the process versus opting out.”

Other states haven't been as welcoming. Facing a May 1 deadline to declare in-or-out status on the collection and remittance of fees, state racing commissions in New Jersey, Maryland and Texas have already said no to HISA.

“While short-term [for] some states it feels good to opt out, kind of to be obstructionists. [But] in the long run, I think this is actually a cost savings for the industry,” Chaney said.

“Kentucky and Minnesota appear to be leaning toward opting in,” Chaney told commissioners prior to the vote. “[New York] initially indicated that they were opting out. From what I understand, in talking to some of their officials, it's an open question now. They're kind of warming more up to the concept as it became more clear.”

Chaney said that details about the Authority are emerging rapidly, so it won't be unusual to see other jurisdictions altering their opinions on whether to opt in or out.

“Frankly, this has come much better into focus in the last month, and so everyone is trying to get up to speed with respect to the implications to their particular state,” Chaney said.

So what will change?

HISA's Authority is tasked with regulating both racing safety and anti-doping and medication control. The safety rules have already been approved by the Federal Trade Commission and will be phased in starting July 1. Snags in getting a medication control agency under contract have caused that portion of the program to be delayed.

With respect to the accreditation and “best practices” safety protocols, Chaney said California will see little change in those areas, because “our current regulations were largely the model for the Authority's structure.”

Chaney continued: “For the most part, the rules mirror ours with two notable exceptions, The shoeing rule is more restrictive than our current one, which I applaud. And second, the crop rule is less restrictive than our current rule, which I find very troubling.”

The HISA whip regulations have the same six-strike limit as California's. But HISA will permit using the whip in the overhead manner, which California does not.

If a jurisdiction doesn't undertake the enforcement of these new rules, “The Authority has to supply another set of stewards and all the things that it's going to take to actually enforce the safety regulations.”

And if that happens, Chaney added, tracks and stakeholders can expect to “be billed for that additional expense.”

On the drug enforcement side of the program–which isn't expected to be up and running until at least 2023–Chaney said that the stakeholders the CHRB met with last week did express concerns about that process and its associated expenses.

“There are some question marks that still linger, notably how much the anti-doping and medication control part will cost,” Chaney said.
Commissioner Thomas Hudnut said he supported the HISA opt-in. “But I do want to register concerns about the lack of clarity thus far when it comes to anti-doping measures,” he added.

Hudnut said that giving control “to the United States Anti-Doping Agency, which is an on-again, off-again proposition, is probably not very good. We have a record of being a leader in this state in testing. The Maddy labs and UC-Davis are the recognized top dogs in the field, and I think it would be a great disservice, not only to our state, but to racing in general, were they not part of the solution.”

Chaney said that once the HISA Authority identifies an agency to run that program, he doesn't think there will be “any real question” about whether the Maddy lab will continue to do testing. But the scope of the work and its funding will still have to be negotiated.

So who ultimately pays?

Once the Authority begins extracting fees from states to fund its budget, it's up to the states (either via their commissions, the tracks, or stakeholders) to figure out how to pay for the oversight.

Chaney said that “associations could structure this in any way, but most seem to be contemplating a fee per start paid by the owner. I think that many tracks are worried about this approach, as it may create a competition among tracks based on how much the Authority fee is to start in a particular race.”

By going the route of using the ADW revenue stream to fund its portion of the program, horse owners will be spared direct expenses.

According to the California Business and Professions Code (CBPC), the market access fee “means the amount of ADW handle remaining after the payment of winning wagers, and after the payment of contractual compensation, if any, to an ADW provider.” Market access fees are then distributed in accordance with a long list of other CBCP provisions.

As Chaney explained it, “There are several distributions from market access fees. Those wouldn't change. What would happen is, the stakeholders would come up with a separate formula [for] this particular expense as well.”

So does that mean bettors will end up being stuck with paying California's HISA bill?

That topic didn't come up during Thursday's meeting, but TDN asked the CHRB for a clarification.

“No change in takeout. Stakeholders will just be voluntarily giving up a bigger share of their revenue from ADW. Won't affect bettors at all,” wrote CHRB spokesperson Mike Marten.

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