NHBPA, Industry Statements on HISA Decision

After Thursday's dismissal by a federal judge of the National Horsemen's Benevolent and Protective Association (NHBPA)'s lawsuit questioning the constitutionality of the Horseracing Integrity and Safety Act (HISA), the NHBPA issued the following response:

“Aspects of this law will have a devastating effect on our industry and put many hardworking horsemen and horsewomen out of business,” said National HBPA CEO Eric Hamelback. “We've been saying for several years that this legislation was illegal. We are considering our options to appeal the decision and remain committed to doing due diligence to ensure a legal solution that protects the health and welfare of our equine and human athletes is adopted.”

The statement continued, “In his decision, Judge Hendrix acknowledged his court cannot “expand or constrict” the precedents, which makes the ruling ripe for appeal. Judge Hendrix wrote, 'The Horsemen are correct that HISA creates a novel structure that nationalizes regulation of the horseracing industry…Although the Horsemen make compelling arguments that HISA goes too far, only appellate courts may expand or constrict precedent. This Court cannot.'”

National HBPA and affiliates in Arizona, Arkansas, Indiana, Illinois, Louisiana, Nebraska, Oklahoma, Oregon, Pennsylvania, Washington, West Virginia and Tampa Bay are represented by the Liberty Justice Center, a national nonprofit law firm.

“We are encouraged that Judge Hendrix recognized the strength of our arguments and plan to push them vigorously on appeal,” said Daniel Suhr, managing attorney at the Liberty Justice Center. “Congress cannot cede its legal authority to regulate an entire industry to a private organization. This case remains important to protect the integrity of not only the horseracing industry but also our Constitution.”

The statement concluded, “HISA still faces a separate federal lawsuit challenging its constitutionality. That suit filed in Lexington, KY., was brought by the United States Trotting Association; the states of Oklahoma, West Virginia and Louisiana with support from six additional states; and other entities that include two racing commissions and the Oklahoma Quarter Horse Association. In the best interest of horse racing, horsemen and horsewomen, we must continue to exercise our due diligence and see this through. The National HBPA appreciates the process. We believe Judge Hendrix has done deliberative, supportive work and has provided a path to move forward with our challenge.

 A number of state and industry officials also issued statements on the decision:

James L. Gagliano, President and COO of The Jockey Club:
The Jockey Club congratulates the Horseracing Integrity and Safety Authority and its counsel on the Federal Texas District Court's finding that the Horseracing Integrity and Safety Act of 2020 is indeed constitutional.

For those long supporting the passage and implementation of the Act, this is a result we have long anticipated. To HISA Chairman Charlie Scheeler, CEO Lisa Lazarus, and the entire HISA team and its counsel, we express our gratitude for your continued dedication to the cause of equine safety and integrity in our sport. We look forward to HISA beginning the first prong of its programs to enhance our sport on July 1.

Marty Irby, Executive Director of Animal Wellness Action:
We applaud the court for validating what we knew all along, the Horseracing Integrity and Safety Act is in sync with the U.S. Constitution and intent of the Commerce Clause–some of the most brilliant legal minds in Congress, the animal protection space, and Thoroughbred horse racing prepared and vetted a bullet-proof measure that's now the law of the land.

It's time for the Horseracing Integrity and Safety Authority to swiftly implement the new law as intended and secure a contract with the U.S. Anti-Doping Agency to oversee all testing and enforcement so the eradication of doping can begin. We congratulate the Authority on this tremendous victory leading up to the running of the 148th Kentucky Derby.

U.S. Senate Repulican Leader, Ky Senator Mitch McConnell:
Kentucky's signature horseracing industry is a key part of our heritage and supports 24,000 workers across the Commonwealth. Working closely with sport leaders, horse advocates, and fans, Congressman Barr and I led the Horseracing Integrity and Safety Act of 2020 to passage to promote safety and fairness across Thoroughbred racing, ensuring the sport's future viability. This legislation's advocates knew from the beginning that it was fully constitutional, and I am pleased the court agreed with our arguments, which I supported through an amicus brief. I congratulate the Horse Integrity and Safety Authority for their recent positive momentum, moving us all closer to a safer, better-regulated American Thoroughbred racing industry.

Ky Congressman Andy Barr:
The Horseracing Integrity and Safety Act was carefully and thoroughly drafted with an eye toward ensuring the Authority it created was constitutional in its structure and powers. Throughout the process Senator McConnell and I consulted with lawyers and relevant precedent to ensure the statute would survive any constitutional challenge. The fact that the Northern District of Texas has upheld HISA reinforces that due diligence. I look forward to seeing the Authority begin its programming this summer and the further advancement of the sport.

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Legislation Introduced to Ease Tax Burden

U.S. Congressman Andy Barr, a Kentucky Republican who represents Lexington, has reintroduced the Equine Tax Fairness Act, which, if passed would make changes to the tax laws favorable to horse owners and breeders, it was announced by his office Wednesday.

The bill calls for new regulations that would make the three-year depreciation schedule permanent for racehorses, no matter their age when put into service. Currently, Congress must reauthorize this provision in the tax law on an annual basis.

The legislation would also reduce the holding period for equine assets to be considered long term capital gains, putting them on a level playing field with other similar assets.

“Permanently delivering tax incentives for owners and breeders will strengthen investment in our signature equine industry,” Congressman Barr, who serves as Co-Chair of the Congressional Horse Caucus, said in a statement. “I want to continue the momentum started with the enactment of the Horseracing Integrity and Safety Act to push another key industry initiative across the finish line that will help solidify the sport for decades to come.”

Barr's bill has been endorsed by the National Thoroughbred Racing Association (NTRA), the Kentucky Thoroughbred Association, the Jockey Club, the Thoroughbred Owners and Breeders Association, Keeneland, and the American Horse Council.

“The three-year depreciation of racehorses (similar to other investment assets) is critically important to encourage robust investment in Thoroughbred horses and to maintain the vibrant economy and trade we have seen throughout this Thoroughbred sales cycle and consistently over the past 85 years at Keeneland,” Shannon Arvin, President and CEO of Keeneland said in a statement. “We appreciate Congressman Barr's consistent support of this legislation and the entire Thoroughbred industry.”

“The Jockey Club wholeheartedly supports the Equine Tax Fairness Act, introduced by Congressman Andy Barr,” Jockey Club President & CEO Jim Gagliano said in a statement. “This bill will put horse ownership on par with other investment assets. The bill addresses two key deficiencies of the tax code. First, the bill will decrease the depreciation schedule eligible to racehorses from seven years to three, permanently rescheduling racehorses that are put into service before the age of two into the three-year depreciation asset class. The three-year depreciation schedule accurately reflects the typical career of a racehorse since nearly three-quarters of foals that race have a career of four years or less. This change has been enacted by Congress on a temporary, year-to-year basis since 2008, and needs to be permanent law.

“Second, the Equine Tax Fairness Act will reduce the holding period required for equine assets to be considered long-term capital assets from 24 months to 12 months, putting them in line with other investments, such as homes, stocks and bonds.”

Along with Congressman Paul Tonko, Barr was the original sponsor in the House of Representatives of the Horseracing Integrity and Safety Act.

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Barr Introduces Legislation To Make Racehorse Tax Depreciation Schedule Permanent

U.S. Congressman Andy Barr (KY-06) reintroduced legislation to incentivize investment in Kentucky's signature equine industry.  The Equine Tax Fairness Act would make the three-year depreciation schedule permanent for racehorses, regardless of their age when put into service. Currently, Congress must reauthorize this provision in the tax law on an annual basis.

Additionally, this legislation would reduce the holding period for equine assets to be considered long term capital gains, putting them on a level playing field with other similar assets. Congressman Barr's bill is endorsed by the National Thoroughbred Racing Association (NTRA), the Kentucky Thoroughbred Association, the Jockey Club, the Thoroughbred Owners and Breeders Association, Keeneland, and the American Horse Council.

“Permanently delivering tax incentives for owners and breeders will strengthen investment in our signature equine industry,” said Congressman Barr, who serves as Co-Chair of the Congressional Horse Caucus. “I want to continue the momentum started with the enactment of the Horseracing Integrity and Safety Act to push another key industry initiative across the finish line that will help solidify the sport for decades to come.”

“The three-year depreciation of racehorses (similar to other investment assets) is critically important to encourage robust investment in Thoroughbred horses and to maintain the vibrant economy and trade we have seen throughout this Thoroughbred sales cycle and consistently over the past 85 years at Keeneland,” said Shannon Arvin, President and CEO of Keeneland.  “We appreciate Congressman Barr's consistent support of this legislation and the entire Thoroughbred industry.”

“Congressman Barr understands the horse racing industry and appreciates the impact this bill would have on attracting and maintaining ownership in racehorses,” said Alex Waldrop, President and CEO of NTRA. “We thank him for introducing the Equine Fairness Act and for helping support an industry that is a job-creating economic engine for his home state of Kentucky and for other states.  Both provisions offer a level of tax fairness and flexibility that racehorse owners seek when determining their level of investment.  This bill simply is good for business.”

“The Jockey Club wholeheartedly supports the Equine Tax Fairness Act, introduced by Congressman Barr,” said James Gagliano, President of the Jockey Club. “This bill will put horse ownership on par with other investment assets.  The three-year depreciation schedule accurately reflects the typical career of a racehorse since nearly three-quarters of foals that race have a career of four years or less. This change has been enacted by Congress on a temporary, year-to-year basis since 2008, and needs to be permanent law.”

You can read the Jockey Club's full statement on the bill here.

“The Kentucky Thoroughbred Association endorses the Equine Tax Fairness Act, and is very grateful to Congressman Andy Barr for introducing it.  Kentucky breeders produce foals that become racehorses in 38 states, and the 3-year depreciation encourages racehorse ownership which we know supports 241,000 direct racing sector jobs nationwide as well as the 60,000 direct, indirect and induced jobs in the Commonwealth of Kentucky,” said Chauncey Morris, Executive Director of the Kentucky Thoroughbred Association.

“The Thoroughbred Owners and Breeders Association fully endorses Congressman Barr's bill to reward investment in our great sport,” said Dan Metzger, President of the Thoroughbred Owners and Breeders Association.  “We thank him for his consistent support for owners and breeders and the Thoroughbred horse racing industry as a whole.”

“The American Horse Council is pleased to endorse Rep Barr's Equine Tax Bill, which will help ensure growth and investment in the $122 billion equine industry,” said Julie Broadway, President American Horse Council.

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IFHA: Saudi Cup Upgraded To Group 1 Status

The Executive Council of the International Federation of Horseracing Authorities (IFHA) met on Oct. 4, 2021 at the offices of France Galop and via Zoom. The meeting was led by new IFHA Chair Winfried Engelbrecht-Bresges, who succeeded Louis Romanet, longtime Chairman of the Federation. Romanet attended the meeting as Chairman Emeritus.

The meeting also marked the commencement of the terms for Jim Gagliano, Brian Kavanagh, Masayuki Goto, and Horacio Esposito as Vice-Chairs of the IFHA. The Chair and Vice-Chairs of the Federation will serve a three-year mandate from 2021 to 2024.

Further information about the newly elected Chair and Vice-Chairs can be found at https://ifhaonline.org/Default.asp?section=Resources&area=0&story=1090.

Appointments to the Executive Council were approved for Bruce Sherwin, Director of New Zealand Thoroughbred Racing, and Dr Paull Khan, Secretary-General of the European and Mediterranean Horseracing Federation (EMHF), as rotating members representing “developing racing countries”. Sherwin was nominated by the Asian Racing Federation, and Khan by the EMHF, each appointed for a 3-year-term.

Additionally, the Executive Council endorsed the chair and nominations to its Finance Committee and appointed a chair to its Governance Committee. A Commercial and Marketing Committee was formed and its chair selected. And finally, the Executive Council approved the selection of key positions for its global Executive Office.

The Finance Committee's primary objectives are to provide practical advice and assistance in relation to the IFHA's budgeting processes and decisions; financial risk management; internal financial control systems and reporting; external reporting and external audit processes; and general oversight in relation to the financial activities of the IFHA. Jim Lawson, Woodbine Entertainment Group, will chair the Finance Committee. Oscar Bertoletti, CEO of OSAF; Olivier Delloye, CEO of France Galop; Suzanne Eade, Chief Executive for Horse Racing Ireland; and Greg Nichols, Director of Racing Victoria, constitute this committee.

The Governance Committee, to be chaired by BHA Chief Executive Julie Harrington, is tasked with providing the IFHA Executive Council with advice and recommendations in relation to governance matters related to the IFHA and to generally assist the IFHA to maintain good governance practices. Full appointments to the Governance Committees will be announced in December 2021.

A new Committee was established to focus on Commercial and Marketing matters. This Committee will be chaired by Olivier Delloye, with appointments to the committee to be confirmed in due course.

The Executive Council approved the appointment of an Executive Director and three directors to its global Executive Office. Andrew Harding will continue to lead the Executive Office as the Federation's Executive Director. Andrew Chesser, Manager of Registration Services for The Jockey Club (USA) and previously Secretary General for the IFHA; James Ogilvy, Executive Manager, International and Racing Regulation at The Hong Kong Jockey Club and previously Technical Advisor for the IFHA; and Henri Pouret, Managing Director, Racing Operations for France Galop, were all named Directors of the IFHA global Executive Office.

Bahrain and Saudi Arabia Promoted to Part II of the International Cataloguing Standards Book

At the Executive Council meeting, it was also shared that the International Grading and Race Planning Advisory Committee (IRPAC) approved the promotion of Bahrain from Part III to Part II of the ICS Book and the promotion of the Bahrain International Trophy to International Group 3 status in Part I (under the Other Races section). Three races will be included in Part II of the ICS Book and receive international Listed status section). The promotions were ratified by the Society of International Thoroughbred Auctioneers (SITA).

BAHRAIN

Races from Bahrain will be presented as follows in the ICS Book:

In Part I under Other Races

Bahrain International Trophy G3

In Part II

Al Methaq Cup
His Majesty the King's Cup
His Royal Crown Prince Cup

In addition, IRPAC approved promotion of Saudi Arabia from Part III to Part II of the ICS Book and the promotion of six races to International Group Status in Part I (under the Other Races section).

SAUDI ARABIA

Races from Saudi Arabia will be presented as follows in the ICS Book:

In Part I under Other Races

Saudi Cup G1
Neom Turf Cup G3
Saudi Derby G3
STC 1,351 Turf Sprint G3
Riyadh Dirt Sprint G3
Red Sea Turf G3

Saudi Arabia will be included in the ICS book as a Part II country. There are currently no races of Listed status for Saudi Arabia.

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