horseracing integrity and safety authority | Horse Racing Free Tips

Horsemen’s Groups File Federal Lawsuit Over HISA

Organizations representing some Thoroughbred horse owners and trainers have filed a federal lawsuit to stop the Horseracing Integrity and Safety Act (HISA), signed into law in the U.S. Congress's December omnibus spending bill.

The National Horsemen's Benevolent and Protective Association (National HBPA) and state affiliates in Arizona, Arkansas, Indiana, Illinois, Louisiana, Nebraska, Oklahoma, Oregon, Pennsylvania, Washington and West Virginia are suing HISA's newly-created “Authority” to regulate the sport and the Federal Trade Commissioners. In addition, they are suing the Nominating Committee and asking the court to immediately stop them from appointing the Board members of the Authority.

They are represented by attorneys at the Liberty Justice Center, which is contending that HISA is unconstitutional because it gives powers to private individuals and a private organization in an area where only a government entity should be allowed such powers.

Notably absent from the list are horsemen's groups representing owners and trainers in the four leading racing states, New York, Kentucky, Florida and California. The New York Thoroughbred Horsemen's Association has come out in favor of HISA.

The news of the lawsuit brought an immediate and strong response from those who have been working behind the scenes for the passage of HISA, which some believe is a necessary step in order for the sport to clean itself up and prevent cheating and the use of performance-enhancing drugs.

“If they are successful and they stop this, you can kiss the horse industry goodbye,” said breeder and owner Arthur Hancock. “Look at what has happened in the past. That so many have come together to try to clean up the sport is a wonderful thing. Everyone wants a level playing field and this will give it to them. I don't know why anyone would object to that.”

“This is ridiculous,” said Hall of Fame trainer Mark Casse. “I read this and thought, 'you've got to be kidding me.' All we are trying to do is clean up our sport. Looking at the states where they are backing this, those are some of the states that most need cleaning up. I don't know how anybody could be against cleaning up our sport. I can tell you one thing, they never asked me for my opinion.”

While it remains to be seen whether or not the lawsuit succeeds in circumventing HISA, it could cause delays. The United States Anti-Doping Agency is set to begin policing the sport and testing its participants on July 1, 2022. That date could now be in jeopardy.

According to its website, The Liberty Justice Center is “a non-profit conservative public-interest litigation center that fights to protect economic liberty, private property rights, free speech, and other fundamental rights in Illinois and beyond.” According to Wikipedia, The Liberty Justice Center is an associate member of the State Policy Network, a web of state pressure groups that denote themselves as “think tanks” and drive a right-wing agenda in statehouses nationwide.

“All Americans should be concerned when Congress gives power to regulate an entire industry to a private group of industry insiders,” said Brian Kelsey, senior attorney at the Liberty Justice Center, in a statement. “This goes way beyond setting rules for the sport of horse racing. This is not the NBA or the NFL. The 'Authority' has the power to make laws, issue subpoenas and effectively tax owners with little real oversight. Placing that power in a private organization is illegal and must be stopped.”

The Jockey Club, the main proponent of HISA, also issued a statement Monday.

“We are not at all surprised by the lawsuit filed against HISA today by a number of affiliates of the National HPBA,” it read. “We are confident that the law is constitutionally sound and legal, as it is patterned precisely after other longstanding law. It's a shame that the National HPBA has chosen this expensive and time-consuming path, but it is consistent with their well known pattern of conduct that has served to block or water down needed reforms that the vast majority of the equine industry and animal welfare organizations support. It is worth noting that this suit is also brought by state HBPA affiliates that are the greatest beneficiaries of the earlier federal legislation, the Interstate Horseracing Act of 1978, which confers upon them virtually unlimited authority over interstate wagering on Thoroughbred races.”

Jeff Gural, who owns the Meadowlands and has been one of the leading voices calling for harness and Thoroughbred racing to undergo sweeping changes when it comes to integrity issues, said he does not believe the lawsuit will ultimately stop HISA.

“I think it will prevail,” he said. “I don't think they have a chance because Judges will look at this and, instinctively, will want to keep the horses from being drugged. Them going in and saying drugging horses is OK is going to be tough to sell, especially after all those people were indicted. I'm not too concerned.”

The lawsuit was filed on Monday in the U.S. District Court for the Northern District of Texas.

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Iowa HBPA’s Moss Wants To Stop Recently Signed HISA Law From Being Implemented

The Horseracing Integrity and Safety Act, signed into law on Dec. 27, 2020, has been billed as the impetus for significant changes in the United States horse racing industry. The Iowa Horsemen's Benevolent and Protective Association executive director Jon Moss isn't sure that's a good thing, according to radioiowa.com.

“This new group that is being formed is unchecked in how much they can charge us as the state of Iowa in order to actually regulate the racing industry within the state,” Moss told radioiowa.com. “There's going to be a reckoning coming — we're going to be in a tough position. We may reach out and request something of your assistance to try and help stop this from being implemented.”

By law, the latest HISA can go into effect is July 1, 2022. The previously formed nominating committee is in the process of selecting the nine members who will comprise the Horseracing Integrity and Safety Authority (five independent members from outside of the horse industry, four from within the industry but without current investments or conflicts of interest). The Authority has been charged with contracting with the United States Anti-Doping Agency to oversee the anti-doping/medication control program on a national basis.

Two working committees also will be named. For more information on what comes next, read answers to frequently asked questions, as supplied by Marc Summers, vice president and general counsel for The Jockey Club, which helped steer the legislation through Congress.

TIF: How Will Racing Pay for HISA? Grow the Business!

by Thoroughbred Idea Foundation

The creation of the Horseracing Integrity and Safety Authority (HISA) is the most significant development in American racing at the federal level since the passage of the Interstate Horseracing Act in 1978.

Questions now being rightly considered include how much HISA will cost and where will its funding originate from. Below, we offer some perspective on the costs. But as the greater industry determines where the funding will come from over time, racing should proactively adopt policies which seek to grow the wagering business.

The industry already has a plethora of obligations–aftercare, backstretch programs, integrity matters, jockey health and equine research, not to mention purses, the main driver for investment from owners. HISA adds to these. The best way for horse racing to afford all of its obligations is to grow the business.

Racing’s wagering business needs to evolve–appropriate pricing of bets, improving access and reducing costs to accurate data, complementing pari-mutuel betting with fixed odds options, modernizing existing bet processing and infrastructure, all while increasing transparency to the public in many areas. Increasing costs to our already fragile wagering markets, or to a declining base of horse owners, without these needed improvements is a recipe for disaster.

Any step where costs to betting are increased to help pay for HISA programs will hurt the greater racing business.

Projecting Costs

There is every reason to expect that a new level of federal bureaucracy functioning on top of individual state commissions will be expensive.

As it relates to testing, these expenses are fairly clear. For example, if the per-race spending on testing alone from the more than 5,000 races across all breeds overseen by the California Horse Racing Board were extrapolated across the entirety of U.S. Thoroughbred racing, nationwide testing alone would run approximately $20 million annually at current standards.

This is a cost already borne by individual commissions.

Factoring in improvements and upgraded requirements, it should be understood that the $20 million–just for testing–merely represents a starting point.

Administratively, what it will cost to start a federal authority from scratch is more challenging to envision. The HISA creates a layer of federal bureaucracy where one never previously existed. This isn’t necessarily good or bad, it is a reality in development with little insight on costs to this point.

HISA requires the registration of all “covered persons”–an umbrella term which, according to the language of the bill, includes “all trainers, owners, breeders, jockeys, racetracks, veterinarians, persons (legal and natural) licensed by a State racing commission and the agents, assigns, and employees of such persons and other horse support personnel who are engaged in the care, training, or racing of covered horses [basically, all active Thoroughbreds].”

Most are already licensed by existing commissions, but some are not. Will that information be shared or require completely new registrations? The exact administrative requirements are (understandably) unknown to this point, but all of this will come with costs.

The United States Anti-Doping Agency (USADA), which will assist in the development of HISA, serves as a potential reference point to understand the possible administrative expenses.

According to its annual report, USADA conducted more than 14,000 tests in 2019 across various groups which include America’s Olympic and Paralympic athletes, services to the UFC or contracted services for other events, such as the Boston and New York City Marathons. Off a base of just 30,000 Thoroughbred races, down from 36,000 run in 2019, it is reasonable to expect the number of annual tests in U.S. Thoroughbred racing would be no less than five times larger than those conducted by USADA, and very likely more.

USADA’s testing costs in 2019 ran more than $13.5 million, but non-testing expenses, which includes results management, science, research and development and drug reference, education and awareness, as well as general and administrative expenses totaled an additional $9.3 million.

It would be reasonable to estimate that HISA’s costs would be similar, if not more, given a substantially increased number of tests, across a far larger base of competitors and events (races) requiring tests.

Whatever the exact costs, it will be more than in pre-HISA times.

Grow the Business

The best chance racing has of covering HISA costs is if racing finds a way to actually grow the business, turning around two decades of decline.

Grow the business. Grow the business. Grow the business.

State commissions are, for the most part, funded through fees assessed to, or withheld from, the sport’s participants. Receiving a portion of the hold from wagering takeout is one source of funding, licensing fees and starter fees are another. Some receive funding through a share of alternative gaming revenue too.

If wagering on racing continues to decline, recalling that it has dropped roughly 50% adjusted for inflation over nearly the last two decades, the ability to pay for HISA and plenty of other programs required of the industry–aftercare initiatives, jockey health, equine research, among others–would grow increasingly difficult. Takeout hikes would be a completely counterproductive measure to pay for HISA as betting churn would decline.

The path to a brighter future, where the industry’s liabilities can be covered, is wagering growth.

More wagering on racing yields a more sustainable business for all stakeholders. But yet, many of the decisions made by racing operators over the last two decades have been in opposition to growing wagering on racing. This has to change.

Whether it is the continuation of churn-killing jackpot bets, high takeout rates, an aversion from many to exploring fixed-odds options, or continuing to operate antiquated pari-mutuel bet-processing systems without modernization–these and other actions have greatly limited racing’s growth, all as the sport’s liabilities increase and its social license to operate becomes tougher to retain.

As racing and humanity emerge from a troubling calendar year, make no mistake that 2020 was a year of tremendous growth in legal sports betting. Those states doing the best with sports betting are those which have embraced online betting and competitive markets. While the overall environment for betting has never been stronger, racing’s wagering product remains stagnant.

If racing wants to succeed, and cover its growing liabilities which now include HISA, it must undertake measures to radically improve–and grow–the wagering business.

The post TIF: How Will Racing Pay for HISA? Grow the Business! appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Thoroughbred Idea Foundation: ‘Racing’s Wagering Business Needs To Evolve’ To Afford HISA

Questions now being rightly considered include how much HISA will cost and from where will its funding originate. Below, the Thoroughbred Idea Foundation offers some perspective on the costs. But as the greater industry determines from where the funding will come over time, racing should proactively adopt policies which seek to grow the wagering business.

The industry already has a plethora of obligations – aftercare, backstretch programs, integrity matters, jockey health and equine research, not to mention purses, the main driver for investment from owners. HISA adds to these. The best way for horse racing to afford all of its obligations is to grow the business.

Racing's wagering business needs to evolve – appropriate pricing of bets, improving access and reducing costs to accurate data, complementing pari-mutuel betting with fixed odds options, modernizing existing bet processing and infrastructure, all while increasing transparency to the public in many areas. Increasing costs to our already fragile wagering markets, or to a declining base of horse owners, without these needed improvements is a recipe for disaster.

Any step where costs to betting are increased to help pay for HISA programs will hurt the greater racing business.

PROJECTING COSTS

There is every reason to expect that a new level of federal bureaucracy functioning on top of individual state commissions will be expensive.

This is a cost already borne by individual commissions.

Factoring improvements and upgraded requirements it should be understood that the $20 million – just for testing – merely represents a starting point.

Administratively, what it will cost to start a federal authority from scratch is more challenging to envision. The HISA creates a layer of federal bureaucracy where one never previously existed. This isn't necessarily good or bad, it is a reality in development with little insight on costs to this point.

HISA requires the registration of all “covered persons” – an umbrella term which, according to the language of the bill, includes “all trainers, owners, breeders, jockeys, racetracks, veterinarians, persons (legal and natural) licensed by a State racing commission and the agents, assigns, and employees of such persons and other horse support personnel who are engaged in the care, training, or racing of covered horses [basically, all active Thoroughbreds].”

The United States Anti-Doping Agency (USADA), which will assist in the development of HISA, serves as a potential reference point to understand the possible administrative expenses.

According to its annual report, USADA conducted more than 14,000 tests in 2019 across various groups which include America's Olympic and Paralympic athletes, services to the UFC or contracted services for other events, such as the Boston and New York City Marathons. Off a base of just 30,000 Thoroughbred races, down from 36,000 run in 2019, it is reasonable to expect the number of annual tests in U.S. Thoroughbred racing would be no less than five times larger than those conducted by USADA, and very likely more.

USADA's testing costs in 2019 ran more than $13.5 million, but non-testing expenses, which includes results management, science, research and development and drug reference, education and awareness, as well as general and administrative expenses totaled an additional $9.3 million.

It would be reasonable to estimate that HISA's costs would be similar, if not more given a substantially increased number of tests, across a far larger base of competitors and events (races) requiring tests.

Whatever the exact costs, it will be more than pre-HISA times.

GROW THE BUSINESS

The best chance racing has of covering HISA costs is if racing finds a way to actually grow the business, turning around two decades of decline.

Grow the business. Grow the business. Grow the business.

State commissions are, for the most part, funded through fees assessed to, or withheld from, the sport's participants. Receiving a portion of the hold from wagering takeout is one source of funding, licensing fees and starter fees are another. Some receive funding through a share of alternative gaming revenue too.

If wagering on racing continues to decline, recalling that it has dropped roughly 50% adjusted for inflation over nearly the last two decades, the ability to pay for HISA and plenty of other programs required of the industry – aftercare initiatives, jockey health, equine research, among others – would grow increasingly difficult. Takeout hikes would be a completely counterproductive measure to pay for HISA as betting churn would decline.

The path to a brighter future, where the industry's liabilities can be covered, is wagering growth.

Whether it is the continuation of churn-killing jackpot bets, high takeout rates, an aversion from many to exploring fixed-odds options, or continuing to operate antiquated pari-mutuel bet-processing systems without modernization – these and other actions have greatly limited racing's growth all as the sport's liabilities increase and its social license to operate becomes tougher to retain.

If racing wants to succeed, and cover its growing liabilities which now includes HISA, it must undertake measures to radically improve – and grow – the wagering business.

The post Thoroughbred Idea Foundation: ‘Racing’s Wagering Business Needs To Evolve’ To Afford HISA appeared first on Horse Racing News | Paulick Report.

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