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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Taking Up For Bettors: Kentucky Rep. Koenig Seeks To Eliminate ‘Breakage’

Kentucky State Representative Adam Koenig is taking up the banner for the most-neglected component of horse racing: the bettors.

Koenig is co-chair, with Sen. Damon Thayer, of the Pari-Mutuel Wagering Taxation Task Force appointed to review taxation policies on gambling on the Commonwealth's horse-racing products. Koenig said on last Friday's Kentucky Racing Spotlight weekly radio show on Louisville's ESPN 680 that based on the task force's findings, he will introduce legislation for a flat 1.5-percent tax on the gross (before winning bettors are paid off) of pari-mutuel wagers, including the highly successful historical horse racing operations. Such a measure would substantially increase the tax on bets placed on Kentucky racing through online platforms, known as Advance Deposit Wagering (ADW).

Another provision Koenig is championing in the bill he plans to introduce during the current 2022 state legislative session: rounding payoffs down to the penny, rather than down to the dime on a $1 mutuel.

The practice of rounding down is known as breakage. It's a decades-old policy that allows racetracks and any licensed bet-taker, including ADWs, to keep the extra money, to the frustration of horseplayers who believe it should be returned to winning bettors.

“The thing I'm perhaps most excited about is the elimination of breakage on live racing,” Koenig told Kentucky Racing Spotlight hosts Joe Clabes and Jennie Rees on the show. “It's something that happens at every track everywhere. Win, place, show … they (pay off) – at least in Kentucky and most other states – to every 20 cents (on a $2 mutuel). You pay $3.20 or $3.40 or $3.80. But it doesn't work out that way. You might deserve $3.47 or $3.68. We're going to try to make that happen. Because it's your money and it goes back to – I don't know, the 1930 or 40s – when the only place you could gamble legally was the track. There were long, deep lines, and they didn't want to pay everybody to the penny every time they came up.”

If Koenig is successful, Kentucky would be the first state to essentially eliminate breakage. New York, with a sliding breakage calculation, is the only state in the last 30 years to address breakage, but the proposed plan for Kentucky is easily the most player-friendly of any, according to industry expert Pat Cummings of the Thoroughbred Idea Foundation.

“I think not only will it be great for the bettors, but I believe it will be an incentive for people across the country to bet on Kentucky racing,” said Koenig, an Erlanger resident whose district in Boone and Kenton County is adjacent to Turfway Park. “Maybe if you're a bettor like me who bets $5 to win, place on a race, it's not that big a deal. But if you're somebody who doesn't mind betting $200 across the board on a horse, that adds up to real money over time. I think the tracks will get the money back with additional wagering.”

“… I'm not doing it to cost the (tracks) money or even to help their product. I'm doing it because with the passage of this HHR (legislation) and increasing the numbers of HHR machines, we've taken care of the breeders, taken care of the owners; the trainers and jockeys are running for bigger purses,” Koenig continued, referencing legislation passed last February to protect historical horse racing. “The only person we haven't taken care of is the bettor. You can't run the show without all of those people — but you have to have the bettors.”

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The task force was convened in the wake of last year's passage of SB 120 that cleaned up the language to ensure that historical horse racing was legal under the Kentucky constitution. Some lawmakers felt HHR should be taxed at a higher rate, with more money going to the state's General Fund. Subsequent testimony documented that — by being taxed on the gross rather than on net revenue and with a mandated amount going toward purses for live racing — the excise tax on HHR is effectively 32.2 percent.

That places Kentucky's tax rate on the high end of surrounding states with casino gaming, testimony before the task force documented. While standardizing the 1.5-percent excise tax, Koenig's bill would increase the tax on online and phone wagers made in the state from 0.5 percent to 1.5 percent.

“There is a range of tax rates when you make a wager,” said Koenig, who continues to work on the language of the bill before filing. “… When you're at a track and you go to the window, go to a (self-bet) machine, there's a 1 1/2-percent tax on that. But if I am at Keeneland or Churchill Downs and I bet on a simulcast race, say Oaklawn, that's taxed at 3 percent. If I bet on that same race at Oaklawn on my phone, it's taxed at one-half of 1 percent. I'm sure these tax rates made sense when they were created. But now, they don't make so much sense.

“… I believe we're going to generate a fair amount of money, especially with raising the ADW tax from a half of a percent to 1 1/2 percent. It's very complicated because within those tax rates you're funding purses for thoroughbreds, for standardbreds, funding the University of Louisville (equine business) program. Funding pays for improvements at the track. It's more complicated than I ever thought. We're going to make it more even, so that it makes more sense, and we're going to generate some additional revenue for the General Fund.”

Koenig said his bill also will remove any restrictions on how Kentucky Thoroughbred Development Fund (KTDF) supplements can be used as long as recipient horses are foaled in the commonwealth and sired by a Kentucky stallion. The bill would leave it up to the Kentucky Horse Racing Commission's KTDF advisory committee to set the policy but would be expected to allow the Kentucky-bred supplements to be added onto claiming races for the first time.

Among other likely provisions:

Funding for the equine programs at the University of Kentucky and the Bluegrass Community & Technical College.

Requiring that the horse-racing industry pay for the cost of its regulation, with the budget for the racing commission currently coming out of the General Fund.

Creation of a revenue stream to provide help for problem gamblers. HHR facilities would be required to maintain and share self-exclusion lists, where problem gamblers who ask to join the list will be refused admission to such properties.

Kentucky's 2022 legislative session runs through April 14.

Kentucky Racing Spotlight, presented by the Kentucky HBPA, will run Fridays from 6-7 p.m. ET through March 4 on ESPN 680/105.7 with streaming at espnlouisville.com, the ESPN 680 app and the iHeart and TuneIn apps. The shows are archived at davisinnovation.com/kyracing. In addition to the Kentucky HBPA, Kentucky Racing Spotlight is sponsored by Davis Innovation, NKY Tribune and the Louisville Thoroughbred Society.

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Robby Albarado On Ky Racing Spotlight Friday; Damon Thayer, Gene McLean Also Join Jennie And Joe

Robby Albarado, rider of two Horses of the Year and two Preakness Stakes winners, will be in studio for the second edition of Kentucky Racing Spotlight presented by the Kentucky HBPA this Friday from 6-7 p.m. ET on Louisville's ESPN 680/105.7.

Albarado's final mount in a career spanning 34,113 races, 5,222 victories and more than $221 million in purse earnings will be Saturday at Turfway Park. He retires from a career that began in 1990 and saw the jockey capture the 2020 Preakness Stakes on the 3-year-old filly champion Swiss Skydiver. Albarado's career highlights include the 2007 Preakness and Breeders' Cup Classic and 2008 Dubai World Cup with two-time Horse of the Year Curlin and riding 2003 Horse of the Year Mineshaft.

Program co-hosts Jennie Rees and Joe Clabes will talk with Albarado about his career and future plans. Also joining this Friday's show will be Kentucky Senate Majority Floor Leader Damon Thayer and Louisville Thoroughbred Society co-founder Gene McLean.

In addition to airing on ESPN 680-AM/105.7 FM, the region's sports-talk leader, Kentucky Racing Spotlight will be streamed live at espnlouisville.com, on the ESPN 680 app and the TuneIn and iHeart apps. The replay will be available on espnlouisville.com under the podcasts tab and posted on Kentucky Racing Radio's Facebook and Twitter accounts.

If Kentucky Racing Spotlight should get pre-empted for breaking news – as happened last week — the show will be pre-recorded and air Saturday morning at a time to be determined. Check out Kentucky Racing Spotlight's Facebook page (@Kentucky Racing Spotlight radio) and Twitter (@KyRacingSptlght) for any updates.

The Kentucky HBPA, the show's presenting sponsor, represents about 6,000 licensed owners and trainers at all five Kentucky thoroughbred tracks. Other sponsors include Louisville Thoroughbred Society, NKYTribune.com and Davis Innovation.

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Jennie Rees, Joe Clabes Launch ‘KY Racing Spotlight’ Radio Show On ESPN 680/105.7

Lucky 7 Stable's Mike Mackin, horse owner/celebrity bettor Jim “Mattress Mack” McIngvale and Kentucky Senate Majority Floor Leader Damon Thayer are among the guests as Kentucky Racing Spotlight presented by the Kentucky HBPA debuts Friday. The weekly radio program will air 6-7 p.m. ET Fridays through March 4 on Louisville's ESPN 680/105.7, the region's sports-talk leader.

Hosted by horse-racing communications veterans Jennie Rees and Joe Clabes, Kentucky Racing Spotlight assumes the time slot filled much of the year by Inside Churchill Downs. The program will showcase Kentucky racing and horsemen, with one focus being Turfway Park's winter meet, while also featuring the week's major stakes nationally as well as the breeding industry and horse auctions. This week's featured handicapper is Horse Racing Nation's Ed DeRosa.

In addition to being on ESPN 680-AM/105.7 FM in Louisville, Kentucky Racing Spotlight will be streamed at espnlouisville.com, on the ESPN 680 app and the TuneIn and iHeart apps. The replay will be available on espnlouisville.com under the podcasts tab.

Regular segments will include interviews with Kentucky racing's policy-makers, the Louisville Thoroughbred Society's corporate member of the week and behind-the-scenes looks at aspects of the racing or breeding industry.

“When Jennie and Joe came to us with their vision for the show, our board knew it was a concept we wanted to embrace,” said Marty Maline, executive director of the Kentucky HBPA. “The show will help bring attention to what should be a strong meet at Turfway Park as well as keeping tabs on Kentucky horsemen who head south for the winter. One of the Kentucky HBPA's missions is to promote our horses and horsemen, and this show will do just that.”

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