Federal Bill To Replace HISA Reportedly In Pipeline

A federal bill aimed at replacing the Horseracing Integrity and Safety Act (HISA) with a regulatory system modeled around an interstate compact is reportedly in the pipeline.

The president of the United States Trotting Association (USTA), Russell Williams, disclosed the news about the pending legislation Mar. 21 during a special meeting of the Pennsylvania Horse Racing Commission (PHRC).

Williams addressed the PHRC Tuesday just prior to the board voting in favor of entering into three nine-month agreements with the HISA Authority that pertain to the Racetrack Safety Program, the Horseracing Integrity and Welfare Unit (HIWU), and the Laboratory Services Agreement.

Williams was urging the board to consider future implications prior to taking its vote, and one of the issues he brought up was the looming potential for a replacement regulatory structure.

“It's not just a possibility out there. It should be happening in the near future,” Williams said.

“There is legislation about to be introduced in Congress [and] the primary sponsor of this legislation has been talking with us,” Williams said. He did not disclose who that senator or congressman is.

“We provided him with a draft,” Williams continued. “The draft came from the [North American Association of] Racetrack Veterinarians, the HBPA, and the USTA. And it's already been through legislative services, [which has] put it in Congressional format, and as soon as the primary sponsor has his team put together, the bill will be introduced.

“This bill is a state-administered program,” Williams said. “So states would form an interstate compact. They would use state authorities, state experience and state funding, and save millions of dollars over the HISA structure.

“The legislation is health- and safety-focused,” Williams said. “It provides all of the same benefits to the racing industry that HISA does. It is science-based, and this is one of the problems we've had historically with the approach of HISA; it's in the HISA statute, the arbitrary nature of the regulatory approaches in words and statute, the Lasix ban.”

Williams said that the new legislation would be underpinned by “state administration, a science basis for making policy decisions, and a funding model that can be afforded by the racing industry.”

TDN could not independently confirm the involvement of the National Horsemen's Benevolent and Protective Association (NHBPA) with the pending legislation. A phone message left for the NHBPA's chief executive officer, Eric Hamelback, did not yield a return call prior to deadline for this story.

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USTA To Join Upcoming Lawsuit Challenging Horseracing Integrity And Safety Act

By a vote of 35-8, the United States Trotting Association Board of Directors on Friday, April 16, elected to join an upcoming federal lawsuit challenging the constitutionality of the Horseracing Integrity & Safety Act (HISA), which was passed by Congress and signed into law last year.  The USTA repeatedly has expressed reservations about the legislation's legality, in particular whether or not it violates the Constitution's non-delegation doctrine and anti-commandeering principle.

In a statement made in September 2020, USTA President Russell Williams said, “The constitutional concerns raised by HISA are substantial and pervasive. Those concerns embrace the structure and powers of the regulatory body at the heart of the bill and extend even to the bill's more peripheral provisions.”

On Friday, Williams further elucidated his concerns to the USTA Board in prepared remarks in which he also assured the board that the Association will assume no portion of the cost of district court proceedings.

If allowed to stand, HISA would remove from the states the power to regulate racing medication and safety matters and give them to a private entity, the newly created Horseracing Integrity & Safety Authority (Authority).  HISA is scheduled to go into effect no later than July 1, 2022.  The Federal Trade Commission will oversee a rule-making process that eventually will establish and approve the medication control and racetrack safety programs to be enforced by the Authority.  The new law stipulates that HADA initially will be funded by loans taken out by the Authority, which will then be repaid by fees assessed to the state racing commissions.   No price tag has yet been attached, however, nor has it been determined which segments of the industry will pay for HISA.

The legal action that the USTA will be joining is expected to be filed shortly by the State of Oklahoma and Hanover Shoe Farms.   That follows a similar claim against HISA brought last month by the National Horsemen's Benevolent & Protective Association (NHBPA) and 11 of its affiliated state organizations.   That suit, filed in the Northern District Court of Texas, alleges the law creates a private organization and gives it federal authority, which it claims is unconstitutional.

An attendance and voting summary appear below.  A “yes' vote reflects support for joining the lawsuit, while a “no” designation indicates opposition to doing so.

Present:  C. Antonacci, I. Axelrod, S. Beegle, D. Bianconi, D. Bittle, J. Bluhm, M. Breuer-Bertera, B. Brown, J. Cross, G. Ducharme, Chairman J. Faraldo, M. Ford, J. Frasure, R. Gillock, K. Greenfield, J. Gregory, T. Haight, S. Hedington, J. Hensley, S. Hoovler, J. Ingrassia, M. Kimelman, S. Lilly, Vice Chairman M. Loewe, D. Marean, J. Matarazzo, S. McCoy, C. McErlean, R. Miecuna, Treasurer J. Miller, J. Mossbarger, S. Oldford, J. Pennacchio, J. Reynolds, A. Roberts, R. Roland, J. Roth, J. Settlemoir, D. Siegel, D. Spriggs, M. Sweeney, A. Tetrick, M. Torcello, S. Warren, President R. Williams, J. Zambito

Not Present:  B. Alexander, D. Ater, L. Calderone, C. Callahan, K. Crawford, B. Kenney, C. Leonard, R. Mackinnon, S. O'Toole, S. Peine, T. Powers, R. Schnittker, J. Stratton, G. Wand

Yes:  Axelrod, Bianconi, Beegle, Bittle, Breuer-Bertera, Brown, Cross, Ducharme, Faraldo, Frasure, Gillock, Gregory, Haight, Hedington, Hensley, Hoovler, Ingrassia, Kimelman, Lilly, Loewe, Marean, Matarazzo, McCoy, Miecuna, Miller, Oldford, Pennacchio, Roberts, Roth, Spriggs, Sweeney, Tetrick, Torcello, Williams, Zambito

No:  Antonacci, Bluhm, Ford, McErlean, Roland, Settlemoir, Siegel, Warren

*Two votes from directors who were confirmed to be present on the call but experienced technical difficulties in being heard were added to the final tally.

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Making Claims: Let The Courts Strengthen What It Means To Be A Thoroughbred

In “Making Claims,” Paulick Report bloodstock editor Joe Nevills shares his opinions on the Thoroughbred industry from the breeding and sales arenas to the racing world and beyond.

It came as no surprise when The Jockey Club's Stud Book cap on foals born in 2020 or later was formally taken to the courts on Tuesday. The only question was who would be the one to throw the gauntlet down, and when they'd do it.

Now that the bell has officially been rung, there's potentially a lot more on the line than just how many mares a stallion can breed in a year. The very nature of what a Thoroughbred is, and how one is made, could hang in the balance.

In the complaint filed by Spendthrift Farm, Ashford Stud, and Three Chimneys on Tuesday, one of the demands from the plaintiffs reads as follows:

“For an injunction requiring the [Kentucky Horse Racing Commission], through its Chairman and Executive Director, to permit Thoroughbreds to race in Kentucky regardless of their inclusion in the Jockey Club Registry.”

Taken at face value, this reads like a simple request to allow stud farms to continue breeding as many mares to its stallions as they want, beyond the 140-mare cap. For all we know, that might be the only thing the plaintiffs had in mind when the document was written up.

However, the open-ended nature of its language could potentially prop open the door to sidestep other longstanding rules that define what a Thoroughbred is anywhere in the world – namely, that they must be conceived on a live cover.

A horse of Thoroughbred blood conceived via artificial insemination, embryo transfer, cloning, or any other means besides the only one that's allowed, is not a true “Thoroughbred” by The Jockey Club's definition, and it would not be included in the registry. This is one of the building-block rules of the breed.

If Thoroughbreds are allowed to race in Kentucky regardless of their inclusion in the Jockey Club registry, the lock to Pandora's Box would seemingly be left unfastened for whatever interpretation one would want to use.

The live cover issue is one that's being debated and litigated on a global scale, and blowing open the American Stud Book would be a huge precedent with potentially vast ripple effects. The plaintiffs are aware of that global balance, noting in their filing that foals conceived after a stallion's 140th mating of the season would not be eligible for registration in any reputable jurisdiction in the world once it's deemed unable to be registered domestically.

This is a court case that could change the process of Thoroughbred breeding worldwide. It's also an incredible opportunity to reinforce the legal standing of the Stud Book cap and, in turn, the very definition of a Thoroughbred, assuming The Jockey Club and its fellow defendants prevail.

If this conflict was inevitable, which it was as soon as the cap was announced, it's best to get it over with.

Speaking with some prominent figures in Kentucky's stallion industry, I wasn't alone in this thought process.

“I think everybody thought it would come to some kind of challenge, be it stallion farms or an individual breeder who couldn't breed to the horse they wanted to because he was over 140,” said John G. Sikura of Hill 'n' Dale Farms. “While it's frustrating and takes a long time, I think the legal challenge is a good one to answer the question. When something's legally held, whether you like it or don't like it, the future is defined. It's better than being muddled or uncertain.”

The question of whose job it is to regulate Thoroughbred breeding, The Jockey Club or the individual state commissions, is one of the core issues of the lawsuit. Settling the matter in the courts would not only firm up the legal standing of the Stud Book cap, a win for The Jockey Club would also better establish its authority to set and enforce rules in an industry where so many other guidelines vary from state to state.

There are enough drums beating for a central national authority in horse racing, so I won't add my mallet to it here, but it's hard to argue that the industry would be helped in any way by a weakened Jockey Club – arguably the closest thing we have to that central office.

Duncan Taylor of Taylor Made Farm said he understood the reasoning behind the suit, specifically noting the cap's restriction on the idea of free-market capitalism, but he also noted that hardly any industry goes completely unregulated. Any form of regulation is ultimately a man-made restriction to the marketplace, and if man-made rules are created in any venue, they tend to be challenged.

Even if the lawsuit's demand language did explicitly state that it only wanted to overturn the Stud Book cap, Taylor said a defeat of that magnitude in court could make it easier to pull apart other pillars of The Jockey Club's rulebook.

“I would say that I could file today and say we should have artificial insemination, and if their case wins, then the AI case ought to definitely win,” he said.

This case could be seen as a potentially helpful one for proponents of the cap, immunizing it from future legal challenges, but it's only helpful if The Jockey Club and the other defendants win. Otherwise, there will be a lot of open-ended questions suddenly needing answers.

If you're looking for past performance, there is a bit of precedence in this matter, and it looks good for the cap staying in place.

When the United States Trotting Association worked toward instituting its own stud book cap for Standardbreds in the mid-2000s, and ultimately implemented it in 2009 (Spoiler alert: Everything was fine), there were several legal challenges that the measure had to overcome from parties claiming it violated antitrust laws.

I wanted to get some perspective on what to expect from the legal challenges, so I spoke with USTA president Russell Williams, who was a board member at the time the Standardbred rule was implemented. He was one of the cap's most vocal supporters, despite running top breeding operation Hanover Shoe Farms, which took one of the biggest hits from the new rule.

Williams, himself a lawyer, said the rule was created with the expectation that it would have to prove itself out in court, so steps were taken ahead of time to make sure it would stand up to the barrage. An intensive study by the University of Kentucky's Dr. Gus Cothran was commissioned to establish scientifically that there was a looming issue with genetic diversity. Then, the language was given the green light by one of the country's leading law firms specializing in antitrust.

Williams said he expected The Jockey Club would come out on top in the end, even if the case and the argument aren't quite apples-to-apples with what the USTA faced. The burden of proof in the scientific backing will rest harder with The Jockey Club, given it hasn't publicly produced a similar go-to study to hold up against the claims that the science isn't there, as accused by the plaintiffs.

With that being said, the diminishing variety in the Thoroughbred gene pool doesn't take a PhD to deduce in the annual Report of Mares Bred.

The foal crop is at its lowest point in decades, fewer stallions are standing at stud, and the number of stallions covering 140-plus mares per season has exploded since the turn of the century. These trends have been a part of The Jockey Club's platform for the cap since it first went public with a proposed rule change in the summer of 2019.

Putting names behind the numbers further shows just how compounded the top of the Thoroughbred market could become if the trend continues. Of the 42 stallions that covered 141 or more mares last year, 15 were by one of five sires: Curlin, Into Mischief, Uncle Mo, Speightstown, and Tapit. Of those five stallions, all but Tapit were also in the group themselves.

Though the odds appear to tilt toward the defendants, one can't expect this will be resolved quickly, or even necessarily in the defendants' favor. If it goes before a jury, as the plaintiffs requested, juries have done crazier things. Either way, this won't be settled as quickly and neatly as a one-hour episode of Law and Order.

Meanwhile, the first foals affected by the Stud Book cap will go through the sales ring as yearlings this summer and fall. It would be nice for everyone involved if they knew exactly what kind of blue sky they were buying into at that point in the calendar, but we can only venture a guess as to what might happen in the months between then and now.

If all goes as expected, I figure the breed will emerge from this lawsuit better off for it. Now, let's just see if it all goes as expected.

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USTA’s Williams: Time Has Passed For Standardbred Industry To Get A ‘Place At The Table’ With Federal Bill

U.S. Trotting Association President Russell C. Williams submitted the following letter to the editor to the Paulick Report this week. Williams wanted to share his thoughts on a letter we published Oct. 16 from USTA director David Siegel. Siegel urged the Standardbred industry to “extend an olive branch” to supporters of the Horseracing Integrity and Safety Act of 2020 with the hope of active participation in any forthcoming federal racing authority.

My friend David Siegel urges the Standardbred industry to be practical and sit down with the federal bill's key supporters to influence its direction regarding Standardbred racing. This is one of several calls for us to come to the table. All of them suffer from a fundamental misunderstanding of how laws work.

Passing a law is completely different from, say, issuing an invitation to discuss a plan to strengthen integrity, something that never happened in this case. If the bill passes, it will become a federal statute. “Place at the table” platitudes like David's ignore that with a statute you can get what is provided in the statute, and you cannot get what is not provided. For a negotiation to have any meaning at this point, it would have to be possible for the bill's language to change before it becomes a statute. Our experience over more than three years demonstrates that this is impossible.

A good example of how the bill leaves nothing to be discussed at any table is its special approach to race-day Lasix. The key supporters selected this particular therapeutic medication and explicitly banned it. A remarkable gauntlet of language in the bill makes even the slightest modification of the ban impossible to achieve. There is, therefore, nothing to negotiate regarding the race-day Lasix ban, enshrined as it is in the language of the bill itself. This exemplifies the fallacy in the “be practical and negotiate” message.

The same goes for all the other ways in which the bill is unacceptable. Since we were first inserted into the bill without our knowledge or consent, the Standardbred industry has repeatedly explained our objections to it, every one of which would require changes to its language. The key supporters have consistently set their faces against even a single change. Thus, a one-sided negotiation has already been going on for more than three years, during which our concerns have been completely disregarded.

The United States Trotting Association is not alone in objecting to the language of the bill. The National Horsemen's Benevolent and Protective Association represents 29,000 Thoroughbred people who are not in racing for the silver cups. Like most USTA members, most of them make their living in racing and, like us, they object to the language of the bill. The American Quarter Horse Association has 221,000 members, and they also object to the language of the bill. None of us is interested in an opportunity to sit down now, at the Children's Table.

The time for harness racing to have been offered a place at a table was before we got shoehorned into a done deal of someone else's making. That would have been a good faith moment in which to discuss a legislative approach that would credibly allow for the profound differences in the breeds, account for the still-unknown costs that a new federal regulatory tier will rain down on us if we tolerate this legislation, and preserve to us the decisive voice in our own destiny that we deserve to keep.

Fortunately, we have other, eminently practical ways to prevent the federal bill's key supporters – no, let us call them what they are: its elite supporters — from imposing their notion of a future on us.

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