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Horse Racing Integrity and Safety Act Advances in Congress

The $900 billion COVID-19 relief bill that was expected to pass Monday includes a provision that calls for the passage of the Horseracing Integrity and Safety Act. With the omnibus spending bill having received bipartisan support and with President Donald J. Trump expected to sign it, the legislation that would bring sweeping change to how the sport is regulated and policed appears to have cleared its final hurdle.

Congressional leaders announced Sunday night that they had reached a deal on the stimulus package that included the horse racing act. It was expected to be voted on by the House of Representatives some time Monday and would then go to the Senate, which could also vote on the bill Monday. Once the bill is signed by President Trump it will become a reality.

“It’s a great day,” said Congressman Paul Tonko (D-NY), a longtime proponent of the Horseracing Integrity and Safety Act. “It’s going to save a sport, provide additional jobs and will be so respectful of the equine athletes, the jockeys and others who are involved. It begins and ends there. I am thrilled about it.”

The effort to increase attempts to end doping and to improve safety through legislation has been an on-going process that started at least six years ago and was spearheaded by Tonko (D-NY), whose district includes Saratoga, and Congressman Andy Barr (R-Ky), whose district includes Keeneland. However, the Horseracing Integrity and Safety Act appeared to be stalled until Senate Majority Leader Mitch McConnell (R-Ky) announced his support in a September press conference at Keeneland.

“It’s a great day,” said Arthur Hancock, who, along with his wife Staci, has been fighting for industry reform for nearly 30 years and formed the Water Hays Oats Alliance. “It’s hard to believe. I’m still sort of pinching myself that it is done. Leader McConnell of Kentucky has done a wonderful job and so has Andy Barr and Paul Tonko. Senator McConnell, they threw him the pass and he ran a 75-yard touchdown. I think now the horse business has a future. People will come to, hopefully, trust it again and have confidence in it. We’re going to clean out the drugs and thugs.”

The House passed a stand-alone version of the Act shortly after McConnell voiced his support, but had to vote again because the legislation was now included in a different bill. The language covering the Horse Racing Integrity and Safety Act in the spending bill is virtually identical to the bill passed by the House of Representatives in September.

“The private, independent, self-regulatory, non-profit corporation, to be known as the ‘Horseracing Integrity and Safety Authority’ is recognized for purposes of developing and implementing a horseracing anti-doping and medication control program and a racetrack safety program for covered horses, covered persons, and covered horseraces,” it reads.

“I think this will build great layers of integrity into the process, which is an important thing,” Tonko said. “There are many, many choices for sports fans these days. The sports fans are very discerning and if we are to provide a cleaner image, one that’s safer and more respectful of the equine athlete, the jockeys and all the people involved in the sport, I think it will mean a great shot in the arm for the sport.”

The bill calls for a phase-in period, with the bill going into effect July 1, 2022, at which time the “Horse Racing Integrity and Safety Authority” will be in place and responsible for “developing and implementing a horseracing anti-doping end-medication program and a racetrack safety program for covered horses…”

The “Authority” will be governed by a nine-member Board which must be put in place prior to July 1, 2022. The Federal Trade Commission will have oversight of the Authority and the United States Anti-Doping Agency will be brought in to handle drug testing and enforcement.

Where the funding will come from to pay for USADA and the Horseracing Integrity and Safety Authority remains somewhat unclear. The bill states that initial funding to establish the Authority and underwrite its operations shall be provided through loans obtained by the Authority.

The Horseracing Integrity and Safety Act had picked up widespread support in the industry. The Jockey Club was the most visible and vocal group when it came to supporting reform measures through legislation, but was joined by the Breeders’ Cup, Keeneland, Churchill Downs, the New York Racing Association, Del Mar, The Stronach Group, as well as other influential racing organizations.

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ARCI Analysis: HISA Bill ‘Fixes The Kitchen By Building A New House’

The Association of Racing Commissioners International has prepared an analysis of the newly proposed legislation, the “Horseracing Integrity and Safety Act,” by Kentucky Senator Mitch McConnell (R), so the group can prepare for a “smooth transition” should the measure be enacted. The ARCI has already released statements looking at the bill's effect on breeders, looking at control of medications in training, and looking at how the bill will affect state-level enforcement.

The new federal legislation being rushed through Congress will have a positive effect on the racing industry by mandating uniform and expanded anti-doping and medication policies, but it may have a devastating negative affect if the unknown costs force smaller and midsized racetracks, owners, trainers, and breeders out of business, according to an analysis prepared for the Association of Racing Commissioners International (ARCI).

“S.4547 is better than the previous proposal in some ways, but concerns still exist as to whether it actually goes far enough to protect and regulate the care given young horses,” RCI President Ed Martin said, noting that the ARCI has not taken a position on the McConnell bill and is unsure if it will given reports that it may be a “done deal”.

The purpose of the analysis is to highlight changes that need to be understood early in order for there to be a smooth transition, Martin said. “This is enormous and I am not sure everyone understands how this might play out, especially given the fact that costs have not been explained, only how they are to be collected.”

US State Racing Commissions spend upwards of $21 million each year on the drug testing program. The analysis raises the possibility that some State Budget Offices and Legislatures may opt to shift that money to other state needs by handing off their programs to newly formed Horseracing Integrity and Safety Authority (HISA), which can independently tax racetracks, breeders, owners, trainers and veterinarians for program costs.

Under this scenario there is a real risk that racing industry interests may end up paying twice as the prospects for an industry specific tax cut to prevent that in most states may prove elusive.

Thirty Five Racing Venues in 19 States Put on “Watch List”

The analysis puts over thirty five racing venues in nineteen US States on a “watch list” based on concerns about the overall economics of racing and their ability to absorb undefined new mandated costs anticipated to be imposed by enactment of S.4547.

An inability or failure to absorb additional costs of doing business may force hard decisions by the ownership of these entities which may impact the extent or continuation of racing activity. Racing commissions and policy makers are being urged to work with these entities to clearly understand the legislation's impact locally.

“The sponsors and proponents of this legislation need to release detailed cost estimates for various scenarios for individual states,” Martin said. “I am shocked that Members of Congress would actually pass this bill without knowing the impact locally.”

Impact on Investigations and Involvement of Federal entities

There is a widespread impression that the newly formed Horseracing Integrity and Safety Authority (HISA) will have new investigatory powers beyond those that currently exist for the State Racing Commissions. S.4547 does not grant any expanded authority to the new entity.

“The recent federal indictments like those before them were the result of multi-agency cooperation where the work of state racing commissions were built upon and expanded by the reach of a federal law enforcement agency using federal wiretaps or other tools reserved for law enforcement,” Martin said. This bill does not give HISA racing investigators law enforcement status.

The bill also fails to include a proposal made by the ARCI at hearings on the previous Horse Racing Integrity Act to create designated desks in key federal agencies – the Department of Justice, the Federal Bureau of Investigation, Drug Enforcement Agency, and the Food and Drug Administration – to assist racing investigators and work to facilitate the involvement of federal law enforcement or regulators in pursuing racing related cases.

Other Key Changes

The analysis underscores additional changes:

- Creation of a uniform point of equine regulation beginning with the first timed workout for each covered horse;
- The HISA would have broad authority to regulate and control the administration of all medications given a “Covered Horse”;
- Inclusion of Breeders as a source of regulatory fees to help pay for the new program;
- Apparent less transparency than exists under the current system as current Open Meetings, Public Records Access, State Ethics laws, and independent audit and investigation of the regulatory entity have not been addressed;
- Consistent testing thresholds for all laboratories;
- A shift of the testing laboratory accreditation program away from the Racing Medication and Testing Consortium to the HISA
- Language to limit the direct participation by the existing network of expertise currently relied upon by the State Regulators and racing industry at large.

Anyone interested in receiving a copy of the analysis should request one by emailing info@arci.com or using the Download Link Here.

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ARCI Analysis: McConnell Bill May Incentivize States to Defund Anti-Doping And Medication Rule Enforcement

The Association of Racing Commissioners International is preparing an analysis of the newly proposed legislation, the “Horseracing Integrity and Safety Act,” by Kentucky Senator Mitch McConnell (R), so the group can prepare for a “smooth transition” should the measure be enacted. Earlier this week, the ARCI released a statement looking at the bill's effect on breeders, and another looking at control of medications in training.

The newly proposed Horseracing Integrity and Safety Act of 2020 (S.4547) may provide an incentive for States to defund existing anti-doping and medication rule enforcement programs.

“COVID-19 has economically devastated many state budgets and the additional resources just may not be there to improve upon the existing anti-doping and medication enforcement program infrastructure to comply with S.4547,” said Ed Martin, President of the ARCI.

The RCI President said It is not unreasonable to expect that a State Budget Director or Legislative Committee will look at this law and question why the state needs to continue paying for the existing program, any new unfunded mandates, and a new federal authority as well as it's contracted enforcement agency. As the law allows the state to “off load” their current program and have the federally dictated system operate and pay for it, there will be an economic incentive to do that.

At that point racetracks, owners, trainers, breeders, and veterinarians may be assessed costs to replace the lost state investment and pay for the additional two entities envisioned by the bill.

Depending on the state, the local racing industry will continue to pay all current state assessments and taxes and may discover that they now must pay newly levied assessments to pay for the now federally mandated privatized program.

According to the analysis and assuming that there will be no industry specific state tax cut in these jurisdictions and existing revenue sources will remain, the racetracks, owners, trainers, breeders, and veterinarians in the following states (partial list) are potentially exposed to paying again should their state program be shifted to the newly created NGO:

Illinois	Colorado
Michigan	Florida
Oregon	Arizona
Massachusetts	Nebraska
Virginia	Washington
Indiana	New Mexico
Wyoming	Louisiana

Some states have the ability to directly bill racetracks for their program. These states may continue to operate their existing program and simply forward the newly enhanced bill for the current program, additional mandates and the two new entities directly to the racetracks which will then be required to pay the state. These jurisdictions include:

New Jersey	Texas
Kentucky	Delaware
Iowa	Oklahoma
Massachusetts	Nebraska
Virginia	Maryland* (see below)
West Virginia	Minnesota
New York* (see below)

In New York, state general fund monies are used to pay for the drug testing enforcement program and shortfalls are recouped from a commission determined industry assessment on racetracks and owners. Given New York's post virus severe financial needs going forward it would be possible for the state to cut funds for drug testing and allow the commission to impose fees on tracks and owners to pay for the shortfall and any additional costs imposed by the legislation.

If that were to happen or should the State hand the program off, the prospect for an industry specific tax cut would be slim and the industry would be totally required to make up the loss of state investment.

In Maryland, only certain costs can be forwarded to the tracks and additional mandates may require legislation in order to be passed through.

S.4547 envisions that racing commissions will pass the overhead costs for the new authority and its enforcement agency to industry participants based on the assessment bill received each year. The states do not have the authority to unilaterally impose and set such assessments with the possible exception of New York as indicated above.

The States have had to do the best job they could with the available funding. State budgets have always considered the ability of people to afford the assessments. This bill puts no limit on program funding which is a luxury no State Racing Commission ever has had.

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ARCI Analysis: McConnell Bill Authorizes Strict Control of Medications in Training

The Association of Racing Commissioners International is preparing an analysis of the newly proposed legislation, the “Horseracing Integrity and Safety Act,” by Kentucky Senator Mitch McConnell (R), so the group can prepare for a “smooth transition” should the measure be enacted. Earlier this week, the ARCI released an initial statement looking at the bill's effect on breeders.

The federally sanctioned authority empowered by newly proposed legislation by Senator McConnell will be able to impose strict controls on the use of any therapeutic medications administered to a “covered horse,” effectively setting the stage for a program that could require a veterinarian to receive prior permission before treating the horse with a prescription medication.

Such a system, if implemented, would parallel the “therapeutic use exemption” program in human sport. Under the requirements of the World Anti-Doping Agency code, advance permission must be obtained before a controlled substance is administered to an athlete in training or competition.

Unlike human sport, it is not expected that the new Authority would depart from current ARCI Model Rules or International Federation of Horseracing Authorities standards that prohibit such drugs to be present in the horse when it races.

But S.4547 does give the new Authority powers to control all substances administered to horses under its jurisdiction. Under the proposal, a “covered horse” comes under the jurisdiction of the new Authority after its first timed workout at a racetrack.

The analysis finds that the new Authority could, for the first time, put in place a system to control what some believe is the overuse of certain drugs in the care and preparation of horses intended to race. Whether it will actually do so, the timing of such a change, or how it would work is not yet known.

Given the number of racehorses potentially regulated by the new Authority such a program would require additional resources than what is currently available in the regulatory network in order to review such applications.

State Racing Commissions are not authorized to regulate the practice of veterinary medicine. There has, however, been a trend within the ARCI and the Racing Medication and Testing Consortium to require commission notification of certain treatments and in some limited circumstances advance approval. Current regulatory policy relies largely on the ability of a commission to exclude a horse from competition. In some jurisdictions legal and liability concerns have affected the extent of the changes that could be done.

In July 2019, the ARCI proposed a private regulatory scheme using existing breed registry authority to require submission of all veterinary treatment records, including the diagnosis required for treatments, of all intended racehorses from birth forward, These records would be electronically reviewed to “red flag” horses in need of greater monitoring in order to help regulatory veterinarians assess whether a horse is high risk and should be excluded from competition.

As S.4547 has a greater focus on anti-doping, it does not require such a system. The bill does effectively put the actual horse under the regulatory authority of the new Authority at a uniform and consistent point in its career, eliminating inconsistencies that currently exist in state-based statutes and rules.

It remains unclear whether the Authority will require the submission of all veterinary records or will fall short of what the ARCI had asked the Jockey Club to require in 2019.

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