National Thoroughbred Racing Association | Horse Racing Free Tips

HISA: Five Key Areas and Related Questions

Time is barreling onwards towards July 1, when the Horseracing Integrity and Safety Act (HISA) is scheduled to go into effect, and the pulse of the industry appears to be one of growing trepidation over what promises to be a sweeping reorder of its working mechanics.

That is hardly surprising, given the program still lacks a central enforcement agency, thanks to stalled talks towards the end of last year with the United States Anti-Doping Agency (USADA).

What's more, in Lisa Lazarus, the board of directors has only just formally instated its chief executive officer. Lazarus started her tenure last week.

Under the crunch, the Horseracing Integrity and Safety Authority–the non-profit umbrella established by HISA to broadly oversee the program–has taken mitigating steps by staggering implementation.

While the racetrack safety program prong of the law is set to begin July 1, the anti-doping and medication control (ADMC) rules aren't expected to go into effect until early 2023.

What does this mean for the industry, on the proviso that pending litigation doesn't further stall HISA's implementation? A quick answer is that there is no clear answer.

The TDN sent the Authority a series of detailed questions, receiving brief answers to several of them, but not all.

The following has been pieced together from those responses, from the latest version of the rules which can be found here, and from background conversations with individuals–including industry and state officials–familiar with the process.

Because of the current lack of specifics, the following is far from a comprehensive overview of where matters stand and is in large part a speculative exercise designed to prompt a dialogue on key parts of this federal bill.

1 – LAWSUITS

There are two main lawsuits seeking to strike HISA down.

The first suit, led by the National Horsemen's Benevolent and Protective Association (HBPA), is joined by Arizona, Arkansas, Indiana, Illinois, Louisiana, Nebraska, Oklahoma, Oregon, Pennsylvania, Washington, and West Virginia.

The suit takes aim at HISA's constitutionality on several grounds, including that in the Authority, HISA cedes governance to a private organization of unelected individuals, and that the Federal Trade Commission (FTC) isn't granted the necessary regulatory autonomy as an oversight body.

The defendants–including HISA and the FTC–dispute this reading of the law and the constitution on various grounds, including that the plaintiffs have misinterpreted the legal precedents underpinning their arguments.

Oral arguments were heard Wednesday in a hearing in the United States District Court for the Northern District of Texas. Given the July 1 deadline, legal experts say that Judge James Wesley Hendrix could make a ruling within weeks.

If he rules in the plaintiffs' favor, he could grant a stay on appeal, and the law could still go into effect July 1. However the judge rules, appeals are likely and will head to the United States Fifth Circuit Court of Appeals.

The second suit, filed in the United States District Court Eastern District of Kentucky, is led by the state of Oklahoma, and is joined by several entities, including the states of Alaska, Arkansas, Idaho, Louisiana, Mississippi, and Nebraska, Ohio and West Virginia.

Similar to the litigation led by the HBPA, this second lawsuit–filed in April of last year–questions HISA's constitutionality on various grounds, and argues that HISA's broad regulatory and taxation powers violate the Constitution's non-delegation doctrine.

The TDN understands that no hearing has yet been scheduled on this second lawsuit.

2 – COST

What is the deadline for figuring out overall cost?

According to the law, the Authority needs to alert individual states as to their estimated costs by Apr. 1. Individual states then have until May 2 to decide whether they want to remit their fees according to this calculation.

That calculation–recently posted on the federal register–is a little complicated. Essentially, the rules don't break costs down on a fee-per-start basis, but on a proportionate calculation which includes a state's overall purses:

“For example, if all starts in all races at all tracks were treated equally, West Virginia would have a larger proportionate share than Kentucky, even though the purses and entry fees generated by the Kentucky races dwarf those generated by West Virginia races. Instead, the Authority defined Annual Covered Racing Starts in a manner that is consistent with an equitable allocation of the funding needs of the Authority,” the posted rules state.

There are some important caveats. For one, no state's respective annual allocation shall exceed 10% of the total amount of purses in that state.

“All amounts in excess of the 10% maximum shall be allocated proportionally to all States that do not exceed the maximum, based on each State's respective percentage of the Annual Covered Racing Starts,” the posted rules state.

If a state chooses not to remit fees this first way, it'll still have to do so via separate monthly chunks determined by the Authority, and prefaced broadly on the following calculation:

Monthly starts

Total starts per year X Annual Calculation

Vital questions, therefore, appear to be these:

Q: When it comes to final numbers, does the calculation actually disproportionately impact the high purse states (like California, New York and Kentucky) as compared to the high-volume, low-purse racing jurisdictions (like the aforementioned West Virginia)?

Q: If the safety program goes into effect July 1 this year, and the ADMC program at the start of 2023, how does the Authority plan to distribute its available funds between those two very different six-month periods?

As a useful guide, the industry (minus New York) spent in 2019 a little more than $24 million on medication testing, according to a Jockey Club breakdown of those costs.

Q: And finally, what exactly will the funds be used for and how? Will they also be used, for example, to renumerate legal costs and any debts the Authority might have already accrued?

3 – ENFORCEMENT AGENCY

When USADA announced that it had stepped away from the negotiation table, they left the door ajar for reconciliation.

“Though we are unsure what the future holds for USADA–if any–in this effort, we have offered to assist the Authority and others in the industry to ensure that the sport gets the program it needs and that the horses deserve,” said USADA CEO, Travis Tygart, in his statement on the matter.

No further announcements have been made as to USADA's involvement, if any, in ongoing HISA enforcement agency talks. What other organizations could fit the bill?

The Authority declines to comment on what agencies have been approached, if any.

Could the Federation Equestre International (FEI)–the international governing body for equestrian sports–step into the breach, given new CEO Lazarus's pedigree as the agency's former general counsel, therefore? Or would the United States Equestrian Federation (USEF), which oversees equine sports on home soils, be a better fit?

Could another option–one admittedly fraught with possible conflict of interest issues–be that the eventual enforcement agency sub-contracts portions of the ADMC program to organizations with focused experience in a particular field?

Given how Racing Medication and Testing Consortium (RMTC)-accredited laboratories will still be used when the ADMC program goes into effect, could the Authority sub-contract out lab accreditation to the RMTC on a more permanent basis?

In that same vein, is there room for the Association of Racing Commissioners International (RCI) to assume a role? Could management of the nations' racetrack veterinarians fall to the American Association of Equine Practitioners (AAEP)?

Given how inchoate the enforcement agency agenda is right now, specifics are light. Even so:

Q: What will the working relationship between the Authority and the enforcement agency specifically look like? Will they be a service agency, working primarily at the behest of the Authority, or a separate autonomous beast?

Q: Given USADA's emphasis on increased out-of-competition testing under HISA–typically a more expensive endeavour than post-race testing–how will the eventual enforcement agency approach that vital prong of the ADMC program, especially in the beginning when available funds will presumably be tight?

4 – ANTIDOPING AND MEDICATION CONTROL PROGRAM (ADMC)

During its time as an enforcement agency hopeful, USADA didn't sit idly by, putting together program materials, including a proposed results management process, a set of possible sanctions, and an outline of a binary approach to classifying substances, breaking them into primary and secondary substances.

According to the Authority, HISA owns the materials drafted by USADA, which are still posted on USADA's website.

When asked what components of USADA's ADMC program could be kept and what might be jettisoned, the Authority replied with the following:

“The draft ADMC documents developed with USADA provide a strong foundation that reflects significant input from the industry and other experts and this additional time has enabled us to collaborate further with industry stakeholders. Our goal is to build on the progress that has been made to-date with our future independent enforcement agency,” wrote a spokesperson for the Authority.

Ultimately, final say on the ADMC program will surely fall to the future enforcement agency.

While that position remains vacant, it's once again hard to nail down any specifics. Nevertheless, the following appear two important questions, among many.

Q: Will the enforcement agency maintain USADA's binary approach to regulated drugs, treating them all the same despite differences in potency? Or will it choose an alphanumeric system, like that outlined in the ARCI's model rules?

Q: Information management will be key to the enforcement agency's overall efficiency. And so, how far along is the creation of a centralized database capable of handling a vast amount of data?

5 – SAFETY PROGRAM

The public comment period for HISA's racetrack safety program closed on Jan. 19. Provided no drastic revisions occur, there are several key certainties come July 1.

Racetracks already accredited by the National Thoroughbred Racing Association (NTRA) will receive interim Racetrack Safety Accreditation, while non-NTRA accredited racetracks get provisional status. These designations survive at least until the safety committee completes a formal accreditation assessment.

This official accreditation assessment will encompass several areas, including the following:

Expanded veterinary oversight, both pre- and post-race
Void claim rule
Transfer of claimed horses' medical records
Surface maintenance and measurement standards
Enhanced reporting standards
Data reporting: medications, treatments, injuries and fatalities
Jockey concussions and medical care reporting

There's wriggle room written into the rules for those jurisdictions and tracks likely to struggle enacting various components of the accreditation program.

“If the accreditation assessment concludes that the applicable Racetrack has not reached full compliance with the accreditation regulations, the Committee may grant provisional accreditation for one year and may extend such provisional accreditation if the subject racetrack is undertaking good-faith efforts to comply with the accreditation requirements and achieve Accreditation,” the rules state.

They also allow jurisdictions to share individuals who fill the role of safety director, responsible for overseeing racetrack risk assessment and risk management, among other duties.

Key questions:

Q: When will the formal accreditation process start? In other words, how long do racetracks and jurisdictions have to get up to speed? And who exactly will conduct these assessments?

When it comes to the adjudication of offenses that fall under HISA's racetrack safety program, there are three broad categories, at least as originally proposed.

One:

The safety committee will seek to enter into voluntary agreements with individual jurisdictions to allow their existing state stewards to adjudicate a first set of rules pertaining to things like use of the whip, the carrying of illegal electronic devices, and the use of shockwave therapy devices.

If the Safety Committee doesn't enter into a voluntary agreement with a state, a separate set of stewards under HISA will adjudicate them instead.

Q: How far along is the Authority in entering into agreements with the individual states to allow their existing stewards to remain?

Two:

The second set of infractions concerns those that don't fall under HISA's wheelhouse, including dangerous riding and minor backstretch violations. These will continue to be adjudicated by stewards within each state.

Three:

According to background conversations the TDN conducted with safety committee officials at the end of last year, there is a third set of infractions which includes prohibited practices like the performing of chemical neurectomies (to desensitize the leg), pin firing and freeze firing.

When it comes to these violations, the racetrack safety committee will decide whether to:

1 – Send the case back to the state stewards

2 – Hear the matter themselves

3 – Refer the case to the independent arbitrators

4 – Or refer the case to the national stewards panel

Q: Given how the ADMC program is responsible for establishing a national panel of arbitrators and stewards, how will the staggered implementation of HISA impact the management of these offenses, if indeed this third prong of the adjudication process remains?

Stepping back to look at the looming implementation of HISA in its entirely, however, perhaps the most pertinent question for the industry isn't rooted in specificity but much more widely encompassing:

When will the Authority and its committees more freely open up lines of communication with stakeholders?

The post HISA: Five Key Areas and Related Questions appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Kinchen Suspended From NHC Tour For Two Years

Jonathon Kinchen, winner of the 2015 NHC Tour (National Horseplayers Championship) and widely recognized from duties at NYRA and FOX television, has been suspended from the NHC and NHC Tour for a period of two years, the National Thoroughbred Racing Association (NTRA) announced Tuesday.

Kinchen was disqualified from the NHC after it was learned that he was not in Las Vegas in person for the competition, as required by rule.

“Maintaining the integrity of the NHC is of the utmost importance,” said NTRA President and CEO Tom Rooney. “We look forward to making the 2022 NHC Tour and the 2023 NHC the best ever.”

The suspension was issued by the NTRA following discussions and a recommendation by the NHC Players' Committee, a group of NHC players who act as a sounding board on NHC policy and rule matters. The suspension covers the 2022 and 2023 NHC Tour seasons and the 2023 and 2024 NHCs.

The post Kinchen Suspended From NHC Tour For Two Years appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Guest Viewpoint: Industry Unity Not Likely Without Change In Structure

Best wishes go out to new National Thoroughbred Racing Association president Tom Rooney. And thanks to the Paulick Report for publishing his interesting statement.

Rooney has ambition, which is an essential ingredient in getting something important done. He wants to gain a sense of what's most important to racing and how he can most successfully advocate on behalf of the industry. Also, Rooney is not naïve. He cites opposition from people who can never be convinced that racing is doing what's right by the animals. For sure there is a segment of the population that holds this view regardless of sweeping safety reforms in racing. Unfortunately, continuously confronting this form of opposition seems far down the list of urgent priorities, particularly given the difficulty of changing some minds.

Speaking of the difficulty of changing minds, Rooney sets the lofty goal of building consensus in the industry so he can tell the positive story of the sport of racing in Washington, D.C. Rooney also says, “We need to constantly strive to do the best that we can do for the industry.” Amen to this assertion. However, while Rooney will no doubt do “his” best, the answer to the question of, “What is best for racing?” seems yet to be determined. Rooney is to be applauded for his aspirations regarding the need for consensus. Still, it is critical to recognize that like his predecessor, Alex Waldrop, Rooney is going to find that while he and many others may “want” the NTRA to speak for racing with a unified voice in Washington, the entities controlling the wide range of operating assets in racing are anything but unified as to what comes first.

For racing, agreement on sequencing priorities remains elusive.

Let's tackle Rooney's noble aspirations to see if we can better organize our thoughts in examining the complex task of problem-solving for racing. The “leading issues” facing racing cannot be agreed upon by the participants, simply because racing is not an entity. Racing is a loose collection of mostly unaffiliated participants struggling to benefit from stability. All efforts are conducted individually, while costs run out of control.

The root of the problem is racing suffers congenitally from foundational structures that have actually INHIBITED meaningful industrywide cooperation. This has gone on for decades. Racing is merely one niche competing in a massive modern eco-system we will refer to as the multi-billion-dollar sports entertainment market. Like so many entertainment markets where there is competition for fan dollars, thoroughbred racing's success requires genuine cooperation. Perceptions of the real incentives for cooperation must be imbedded in the foundation of racing.

In other words, changes necessary for racing to prosper must be STRUCTURAL.

Witness the structural revolution of college football in recent years. The Southeastern Conference (SEC) commissioner has gotten roughly a dozen schools to closely cooperate. So successful is the SEC in getting member schools to cooperate, they are now deep into the process of destroying the competitiveness of college football in all other conferences. Through cooperation, the SEC holds down input costs. And in an enormously profitable industry, the SEC dominates a sports marketing niche that generates billions of dollars in sales. SEC revenue streams are now growing and financing still greater advances in its competitive advantages.

The contrasts between the structures of thoroughbred racing and the NFL, NBA, MLB, NHL, and SEC are like night and day. These entities conduct themselves as well-organized niche monopolies in the sports entertainment market. Their commissioners succeed in tests of the perimeters of federal anti-trust statutes. These sports entertainment competitors negotiate as a single entity with suppliers of the raw materials that contribute to the creation of their products and services. They do the same with would-be distributors. They use a wide range of creative tools to control costs at all levels, and as a result, are able to distribute their products efficiently with pricing power. These leagues are prospering mightily while thoroughbred racing entities struggle while going it alone. Why?

Consider the astounding performance of Messier yesterday at Santa Anita. Messier is arguably the most promising 3-year-old colt in the nation on the Kentucky Derby trail. For now, he puts his talents on display at a major racing venue that produces many Eclipse Award winners. Yet Churchill Downs has banned his trainer for two years, while the industry tries to decide what to do about Medina Spirit's Derby win last year. At some point everyone at Churchill, Stronach Group, and the New York Racing Asssociation should consider a private summit to discuss this situation and what it tells everyone about racing, not to mention the difficulty of enhancing the value of individual franchises.

Racing participants continue to operate in a bifurcated and economically unvirtuous doom loop where even those with scale or mini-monopolies tread water. Most other racing participants flounder and many eventually fail. The better outcomes seen with the SEC and professional sports “leagues” is the result of STRUCTURE first, and sound execution second. And ironically, the benefits of real cooperation can be observed right under racing's nose in Lexington in the athletic department of the University of Kentucky, not in perceived power centers like New York City, Chicago or Los Angeles.

What are the barriers in thoroughbred racing that are preventing the sport from taking the same approach?

Many racing entities operate separately while wielding substantial power. Since we live in the midst of a digital revolution, let's start with data in the age of information. Consider that the Thoroughbred Racing Association and The Jockey Club control the vast and mission-critical databases associated with operating the racing industry. The implications of this present arrangement on mission critical data are part of a structural mosaic that inhibits cooperation.

More than 60 racetracks represent the core foundational structure of an anything but “monolithic” list of major participant hosts in the industry. Consider that the major racetrack venues are owned by separate corporate entities including: Churchill Downs (public market cap = $7.7 billion) Stronach Group (private), New York Racing Association (private – non-profit), Penn National Gaming (public market cap = $7.6 billion), and Caesars Entertainment (public market cap = $16.7 billion). Additionally, there are many other significant ownership entities with one or more tracks, including Del Mar, Keeneland and Woodbine Entertainment Group. There are also many stand-alone small racetrack owners.

Most of the major entities still squabble with one another over simulcast signals and television distribution arrangements like feudal lords a thousand years ago. The customer's interests are long lost, as are the long-term interests of most of the major host entities.

Why is it that both vast amounts of capital and the potential benefits of scale still fail to produce cooperation or unity? Again the explanation lies in basic structure. The invested constituent's default state is to gravitate towards the narrow focus of “survival.” Most industry observers are reasonably certain that the Kentucky Derby will always survive, as will the Preakness, and the Belmont Stakes. Accordingly, since Churchill Downs, the Stronach Group, and the New York Racing Association, each owns a slice of the rarest but still fragmented portion of the industry that figures to survive, genuine cooperation with perceived competitors cannot possibly drive the thought processes of their respective leaders.

Churchill Downs, in particular, is necessarily entrenched in enhancing/protecting its most unique franchise. To be fair rather than critical, leadership at large corporate entities like Churchill cannot be expected to forfeit their edge for a vague concept. They must be conservative when it comes to protecting shareholder investments. Something as valuable as the Kentucky Derby franchise should be protected.

However, given current perceptions, leaders at Churchill, Stronach and NYRA are highly unlikely to support a “cooperation plan” that has yet to be articulated, even if it will actually be the only path racing can take to produce a rising tide.

So … we see the alternative playing out instead. The much more narrow scarcity mentality that rightly recognizes the existing structural weaknesses in racing continues to prevail unabated.

What about the sport of racing itself? An end to the beauty of competition hardly defines the SEC, the NFL, the NBA, MLB or the NHL. Less competition need not define the essence of racing either. Tens of thousands of distinctly separate risk takers will continue to participate in racing. This impressive list of participants includes thousands of thoroughbred breeders and breeding entities, thousands of race horse owners and owner entities, thousands of independent contractors (trainers, jockeys and veterinarians), hundreds of stallion farms, and even several horse auction companies. Each can have a much better chance to prosper while still competing with one another if cooperation becomes the hallmark of the industry structure. While these various entities in racing will still compete, they could do so within an overall structure that redefines itself with an over-riding vision for prosperity instead of scarcity. Only constructive cooperation can make this happen.

What about thoroughbred racing's customers? They are frustrated while having a wide range of entertainment choices. Racing host entities continue to embrace far too many short-term paradigms that have nothing to do with serving the thoroughbred racing fan. If we can just get slot machine licenses, or better yet, more slot machine licenses, we can survive, even if our thoroughbred racing product continues to worsen. This is part of the survival mindset.

In the end, a handful of cooperative exceptions fall far short in racing, when compared to better-organized competitors. The “go it alone” mentality prevails in a brutal competitive landscape for fan dollars where real teamwork is essential. Though ownership syndicates and breeding syndicates collaborate and cooperate to produce the sport's stars, the lack of a growing fan base produces overall stagnation and decline. The end result is an overall horse population that is still in full retreat. Even with racing reduced to three days a week, five-horse fields are commonplace in the huge Southern California market that offers phenomenal weather.

Still, even with this disturbing trend in place, consensus for those that own the marquee physical venues in racing cannot agree on the priorities. Small fields in California and the closing of Arlington Park in the gigantic market of Chicago are the most visible symptoms of a huge overarching problem that goes unsolved. And since all of the previously mentioned venue-controlling entities are perceived in varying degrees by their leaders as adversaries, spontaneous combustion that produces “unity” on racing's priorities seems far-fetched. This reality will remain a fundamental truth no matter how hard any one person or group of people tries at the NTRA or anywhere else where hopes for unity remain.

Is it correct to describe as “herding cats” the job description of the commissioners of MLB, NFL, NBA, NHL and SEC? Thanks to a conducive industry structure, these commissioners convince a few decision-making members to cooperate and prosper. Given racing's current structure, imagine the correct way to describe the task Mr. Rooney is facing, considering the complexities and narrow perceptions of most of the interests participating in thoroughbred racing. Getting a bill through Congress is child's play when compared to securing real long-term cooperation in racing.

The first priority for racing will never be lobbying efforts directed toward Washington. The solution to this problem we call the stagnant future prospects for thoroughbred racing rests with the perceptions of the participants who actually possess scale, and the dubious structures they cling to for seemingly sound reasons.

Discovering the abundant benefits of cooperation, in a world where there are well funded competitors everywhere, will have to replace the prevailing provincial mindset. That these perceptions must change is amply supported by evidence supplied by the success of the SEC. But sometimes, even when overwhelming evidence of the narrow path to prosperity is abundant, it does not matter to those firmly entrenched in a scarcity mentality. We are there, and structural changes are going to be required.

If these forces were easy to overcome they would have been re-directed a long time ago. Meaningful change can be accomplished, but only with great difficulty.

Jim Spence, chairman emeritus of Spence Asset Management, is a longtime fan and owner-breeder of Thoroughbreds.

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NTRA’s New CEO Rooney: I Was Hired To Be Thoroughbred Industry’s Unified Voice In Washington

The following statement was distributed by the National Thoroughbred Racing Association on behalf of its new president and CEO, Tom Rooney.

Horse racing has been in my family since long before I was born, and I've grown up with a passion for the sport. When I retired from Congress a few years ago, many people asked me what I would do next. I often responded that I wasn't too sure, I was going to coach my kids in football, and that my dream would be to own a horse that would run in the Kentucky Derby.

Fast forward to last year, when my predecessor Alex Waldrop announced he was retiring from the National Thoroughbred Racing Association. When I heard about this opportunity, I thought to myself how much I love horse racing, and how deeply I want to be a part of it for the rest of my life. Now, as the new president and CEO of this great organization, I am excited for the future of the industry and feel deeply honored to help play a small part in shaping what that future looks like.

It's not lost on me that the industry and racing as a whole have changed significantly in my lifetime, and will continue to evolve for future generations. While these changes may be inevitable, it is critical that we have a unified voice to advocate for what's best for the industry overall. I was hired for one reason and one reason only: to go to Washington, D.C. and be that unified voice on behalf of the thoroughbred breeding and racing industry.

As a former Member of Congress, I understand how Washington works. As a horse owner and fan myself, I understand many of the leading issues we face. But as your representative in Washington, I know that I don't have all the answers. I need to spend time with you, listening and understanding, to get a sense of what's most important and how I can most successfully advocate on your behalf. My goal is to build consensus in the industry and tell the positive story of the sport in Washington.

We're always going to face opposition, and there will be some people we can never convince that we're doing what's right by the animals we so deeply care about. We need to constantly strive to do the best that we can do for the industry. We need to hold people accountable for wrongdoing. We need to praise the good news and successes we have. And we need to work to maintain horse racing for generations to come.

I'm eager and excited to work with you and serve as the leader of NTRA. Together, we can continue to do great things.

Tom Rooney served the people of Florida in the U.S. House of Representatives from 2009 to 2019, focusing primarily on economic, agricultural, national security, and military issues. Prior to serving in Congress, Rooney served with the U.S. Army as a lawyer in the JAG Corps. During his tenure, he was Special Assistant U.S Attorney at Fort Hood, Texas, prosecuting all civilian crimes on post in the 1st Cavalry Division. After completing active duty with the rank of captain, Rooney taught constitutional and criminal law at the U.S. Military Academy at West Point, New York.

He received his J.D. from the University of Miami School of Law and became a member of the Florida Bar in 1999. He also has an M.A. in Political Science from the University of Florida. Rooney played football for Syracuse University and Washington & Jefferson College, where he earned a B.A. in English Literature.

Rooney resides in Palm Beach County, Florida, with his wife, Tara, and three sons, Tommy, Sean, and Seamus.

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