R. Caldwell was second in the standings with 28 victories. Trainer Ronnie Cravens won 22 races and Sarah Davidson rounded out the top four conditioners with 19 winners.

Jockey Stewart Elliott held off a stiff bid from several jockeys to claim his fourth title at Sam Houston. The 59-year-old rode 39 winners from 215 mounts, earning $1,123,500 and finishing in the money at 41%.

For the past four years, Asmussen and Elliott have won titles together here, Lone Star Park and Remington Park.

Floyd Wethey, Jr. won 32 races to finish second in the standings while Fernando Jara was third with 31 victories. Rene Diaz finished fourth with 30 trips to the winner's circle

For the second year in a row, L and G Racing Stables wrapped up owner of the meet honors. The ownership group, with principal owner Genesis Castillo, competes in Texas as well as Louisiana. The group also took leading owner honors at Fair Grounds in 2023. L and G finished with a record of 17 winners from 195 starts and purses of  $376,723. Cesar Govea is their primary trainer. Steve Asmussen finished second in the standings with 14 wins, followed by Henry Witt, Jr. (13) and Carl Moore Management, LLC (11).

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The 2022 edition, which reported a buy-back rate of 24%, saw 161 yearlings out of 211 sell for a total of $3,416,000–up almost 6% from the previous year when 177 out of 228 grossed $3,229,600. Growth was also seen in last year's average of $21,217, an increase from $18,246 in 2021, while the median was $13,500, up from $10,000 the year prior.

Based on current trends, Mary Ruyle, the Executive Director of the TTA, is banking on the Texas racing and sales landscape continuing to blossom.

“The Texas Thoroughbred Association is very optimistic–particularly given the strong catalog for the upcoming Yearling Sale which includes what is likely the best group of Texas-bred yearlings offered,” Ruyle said. “Every horse that passes through the ring at this sale will be eligible for the $150,000 Texas Thoroughbred Association Futurity at Lone Star Park in 2024 and either the $100,000 Derby or Oaks at Sam Houston Race Park in 2025. The Derby and Oaks were run for the first time this year and were very well received.”

First made available in 2020, funds from the Horse Industry Escrow Account have been used to increase purses in Texas and provide additional Accredited Texas-Bred incentive awards to breeders, owners and trainers.

“We expect to have a good crowd in attendance and we will again have online bidding available for approved buyers. A break from our never-ending heat wave would be most appreciated,” said Ruyle.

For the second year in a row, Highlander Training Center, a state-of-the-art facility just south of Sulphur Springs outside of Dallas, Texas, is represented at the sale. This year's draft is made up of 36 yearlings, stabled in Barn E3 at Lone Star.

“We had the $100,000 sales topper last year with Too Much Kiki [Too Much Bling] who ended up winning a stakes this past season at Lone Star,” said Highlander CEO, Jeff Hooper. “Foster Bridewell, who coordinates and runs the sale for the TTA, has been able to really bring in a good mix of buyers and we saw several top pinhookers from Ocala, plus some others from around the country, at this sale.”

Out of the Highlander consignment, Hooper said that hip 149, a Louisiana-bred colt by Unified out of Mirabeau (Bind), will be among those to watch.

“He's the first foal out of a very fast young stakes-winning mare,” said Hooper. “He has a lot a class and walks like a panther. I think he will be very popular with both pinhookers, as well as people looking to buy to race.”

Click here to access the TTA website and the online catalog.

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The horse is a fabric of historical Texas. The horse represents how we all arrived here, and how we survived in the earliest days. Some horses are bred to run–that's their job. All animals need a job and thrive when working. The thoroughbred's instinct is to run as fast and as far as it can. As long as there are horses, there will be horse races, and men and women will admire the sheer determination, stamina, strength, and speed of the majestic horse.

The tragedy at Churchill Downs this past May, in which twelve horses broke down on the racetrack, fractured their lower legs and needed to be euthanized, should never be repeated. The cause of this rash of sudden breakdowns is uncertain: the current American thoroughbred may be bred too strong up top across the chest with lower legs that are relatively too thin and fragile, or changes in the surface of the track due to humidity and weather variations may increase the risk of a ligamentous injuries which can then predispose to falls and catastrophic fractures. Most horses can survive the surgery, but few can survive the confinement and partial weightbearing needed to allow these fractures to heal.

The Jockey Club, in recognizing this problem, sought relief from Congress and in one of the few truly bipartisan pieces of legislation in the past 10 years, the Horseracing Integrity and Safety Act (HISA) was passed. This lifesaving legislation allows the government to designate a corporate entity to unite the horse industry, to find ways in which horse tragedies can be eliminated, and drug abuse can be regulated at the Federal level.

The model is not a new one. A Federally sponsored corporate entity serves to regulate the Securities and Exchange Commission. The needs are similar. Regulation among multiple states with multiple interests are consolidated under a single governing body with superior resources and a single purpose-driven goal.

In response to the HISA act, most states have supported and endorsed this model, but a few outliers, including the State of Texas represented by the Texas Racing Commission, have sought to preserve the status quo.

The Commission's stated rationale is that only the Texas Racing Commission may regulate parimutuel racing and simulcast wagering in Texas. Although National regulation affects all aspects of our life living in Texas, the Texas Racing Commission, due to this perceived legal technicality, has been unable to find a compromise solution. As a result, the Texas racing industry suffers, the Texas patrons who enjoy horseracing suffer, and our thoroughbred gladiators suffer the most.

A second consequence of this stalemate is that racetracks in Texas can no longer simulcast Texas races to other communities and states and receive wagers allotted for their racing program.  Without the ability to simulcast, the betting handle at Sam Houston Racetrack during the winter meet fell 90% and the handle at the current Lone Star spring and summer racing meet is not significantly better. Tracks survive by taking approximately 15% of the betting handle to support their operations and purses. The current situation is unsustainable.

Having served on the Texas Racing Commission for 10 years, including four years as Chairman, I can attest that the Commission staff, stewards, and the working regulators are superb and unmatched in their quality and dedication. The political appointees of the Commission, however, have lost sight of their designated purpose.

In this one rare instance, Congress has actually provided us–and our horses–a solution. Ultimately, HISA has the resources, the regulatory power, and sophisticated lab testing that can root out illegal drug use, research track surfaces, and analyze breeding patterns. HISA has the potential to improve the sport and create a safe horseracing animal that can thrive in a newer environment.

The Texas Racing Commission needs to recognize its responsibilities and protect our animals in an ever-changing world. The consequences of the Texas Racing Commissioners' opposition to these efforts simultaneously leaves our horses at risk and our tracks on the path to ruin.

Texas deserves better.

Robert Schmidt, MD is a Fort Worth based orthopedic surgeon specializing in joint replacement surgery of the hip and knee. He and his wife had bred and raced thoroughbreds under the colors of Oak Meadow Farm. He was appointed by Govenor Perry to the Texas Racing Commission and served for 10 years, including 4 years as chairman. He currently serves as Mayor of Annetta North, Texas.

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On Friday, TDN spoke with HISA CEO Lisa Lazarus on a variety of topics including the launch of HISA's signature drug control program, operational expenses, the Forte situation, Kentucky Derby week and Texas. The following is a very lightly edited version of that interview.

TDN: Last week, the TDN published a story on the headwinds facing the Texas racing industry. In it, the Texas Racing Commission (TXRC) executive director, Amy Cook, reaffirmed Texas's position that unless HISA is restructured or replaced by a “cooperative agreement grant program,” the law could not go into effect in the state. What's your response to the substance of that argument?

Lazarus: There's no change from my earlier response which is that we've done the legal research on this and we think without question there's really no dispute that the Texas Racing Commission absolutely could implement the HISA rules the same way that every other racing jurisdiction has, and that their decision not to is simply a policy choice.

TDN: What do you tell those Texas industry stakeholders who want to join HISA in order to send out their simulcasting signal?

I would say, I'm so sorry that your racing commission is not willing to engage with us to find a solution. But if you have any suggestions or recommendations on how we could have that conversation with the racing commission, I'm all ears. But unfortunately, I'm powerless to require the racing commission to change their policy.

TDN: The commission's stance is they've tried to maintain a dialogue.

That's not true. [Cook] invited me out to Texas more than a year ago before HISA was implemented. I did go out there and we did have a very good conversation, and I thought we had an opportunity to sort of find a way to accommodate Texas' concerns while still allowing HISA to be implemented. Unfortunately, we were unsuccessful in those follow up conversations. I have not actually heard from her or anyone in the Texas situation for more than a year.

TDN: At the same time, lawsuits still abound. If HISA as currently written is once again found unconstitutional in one of these cases, how confident are you Congress can and will fix it again?

I don't agree with the basic premise of your question. It's extremely unlikely that any court will find HISA unconstitutional as currently written. If you read the Sixth Circuit opinion, and if you read the district court opinion out of Texas, I think you'll be able to see the courts' reasoning. I really don't see any genuine risk going forward.

TDN: Let's move onto the Forte situation, the Todd Pletcher trained runner who last year tested positive for the nonsteroidal anti-inflammatory drug, meloxicam. Now, it took from September 23, when the A sample findings came back, to Jan. 28 for the B sample to be confirmed. With HISA's regs as currently written, the public might still not be notified until the B sample is returned. What mechanisms are in place to ensure such a similar delay doesn't happen under HISA?

One of the key criteria for selecting the six labs that form part of the HISA program was a contractual agreement around turnaround times. And so, given the contracts they currently have in place–unless there's something extremely unusual–I'm very confident that the turnaround times will be quick and won't create significant delays.

For a vets' list test, it's five days from [when] the laboratories received the sample. For a post-race test, it's 10 business days from [when] the labs received the sample. The B samples will vary depending what the substance is. We expect the B samples to also be in the 10-day timeframe, but that will vary to some extent based on the sample that's being confirmed.

Forte | Coady Photography

TDN: HISA will be using three less RMTC-accredited labs than is currently the case. Can you make any promises that lab capacity is up to the challenge?

I can promise that if the labs want to remain part of the HISA program, they will have to comply with the contractual agreement, which are those timelines. So yes, I can promise that if they don't comply with them, they'll no longer be a HISA lab.

TDN: Given how rarely a B sample differs from the A sample finding, is there any consideration to alerting the public of an A sample positive finding?

As the rules are currently written? No. What I will say, I think there's maybe an interesting exception to that, which is that HIWU [Horseracing Integrity & Welfare Unit] the agency does have the option to ask the internal adjudication panel to disqualify a result ahead of the B sample, if that result will impact an important qualification. In other words, you have a situation where a horse won a race and that race qualified them for, let's say, the Derby, and there's a concern that B sample won't be back in time. HIWU can ask the arbitration panel to disqualify the result ahead of the Derby so that the second-place horse qualifies, or whatever the details are there. That would be up to the arbitration panel.

TDN: Forte's connections have suggested that the meloxicam positive is the result of environmental contamination, which touches upon a major fear among law-abiding trainers and owners. What specific assurances can you give those trainers who play by the rules that they're not going to be found guilty of a positive that wasn't their fault?

I'm not going to talk about Forte specifically, but what I will tell you is that HISA's screening limits from meloxicam track the International Federation of Horseracing Authorities' screening limits. Therefore, our screening limit is one nanogram per milliliter in blood and 10 nanograms per milliliter in hydrolyzed urine. If what has been reported–and I haven't verified this–but if that positive was [indeed] 500 picograms, that would be below our screening limit and would not ever be notified as a positive under HISA.

Point two, HISA has an atypical findings policy with 27 substances listed, and if [one of those] substances are detected in a horse's system, it goes through a special process to determine whether or not it's contamination. That's reviewed by the scientific committee. If the committee determines that it is contamination, then it never even rises to a violation.

There's another provision in our rules called contaminated product. In that situation, if it's not subject to the atypical findings policy, and it's above the screening limit, there would still be disqualification. But the trainer could argue that it was a contaminated product or there was contamination, and they have the opportunity to have their sanction reduced to zero if they can convince the arbitration panel that it was contamination.

TDN: But at the end of the day, if they haven't got a perfect answer–like a groom was prescribed that specific medication or proven contaminated feed–aren't potentially innocent trainers at serious risk of being inadvertently swept up in the net? They're certainly facing some pretty stark consequences.

Yes, they are. But there's a lot of things that make it far less likely under our program that that is going to happen.

With our accreditation program, we have far stricter requirements around the cleanliness of the test barn so that you have less of a risk of things in the facility causing contamination.

The second is that we've done audits of some of the state racing commissions' collection programs, and many of them were not using secure collection mechanisms, were not using gloves, were really not–in our view–maintaining a safe chain of custody process. Our rules do that. That also reduces the likelihood of contamination.

And then there are the rules I identified. We have screening limits that are sensible. We have an atypical findings policy that no state racing commission has ever had. And then we have rules where you can defend yourself.

TDN: Let's move onto the events surrounding the Kentucky Derby. You've said that HISA is performing its own investigation into the rash of fatalities at the track, and you've detailed what you're doing. But specifically, how does this differ from the one being conducted by the state racing commission?

I'm not sure exactly what they're doing. Obviously, there'll be some overlapping. But ultimately, there's a couple important things that are different. One is, since HISA's already been in effect, we have a fair amount of data that we mandate and collect that we can use to analyze, consider and review the issues.

Two, we have a national uniform governing body giving a different perspective and a different opportunity to review things to the folks who are doing it at the local level. Not that they're not doing it ethically, improperly. They have a different vantage point. But we have access to different experts and a different set of mechanisms we can use to review.

TDN: I think some of our more jaded readers reading your comments will come away thinking this is just another exercise in rubber-stamping. Are there any real-world consequences if you find something wrong?

I can't speak specifically to the pending investigation because we haven't made determinations yet. What I can tell you is, look at the Turf Paradise example.

We required Turf Paradise to make some very significant repairs and we made it clear to Turf Paradise that if they didn't, they would lose their right to export their [simulcasting] signal. We gave them a deadline, and they were able to essentially meet the deadline by a few hours. If they had not, we would have most certainly taken actions to restrict their signal. And they did also pay a financial penalty. We have a wide range of disciplinary authority.

Churchill Downs | Coady Photography

TDN: I've spoken with a number of industry stakeholders who voiced frustration that during Derby week when the track experienced its spate of fatalities, HISA was largely silent. Kind of “disappeared into the background,” is how one person described it. If you could run that week again, would you do anything differently?

I don't think we were largely silent. There are authority issues that come into play, right? HISA's rule is not always to step in. Also, the way the rules are constructed is to support the local commission, the local track, to make sure they're doing everything possible to maximize safety. We will step in if there's a crisis that needs to be managed, if there needs to be some sort of immediate discipline. But otherwise, part of our role is to support and to provide resources and to really help ensure that everything is being done.

The second thing is that without the Anti-Doping and Medication Control program [in effect], without oversight of both pieces of the puzzle, it's difficult for HISA to really have full control. And so, I'm looking forward to restarting the ADMC program on Monday, because I feel like once we have that piece of it as well, we'll be in a much stronger position.

TDN: Isn't that a bit of a cop-out though, blaming the lack of an ADMC program? You don't think that was a missed opportunity to show the public there's a new sheriff in town?

First, we did release a statement. I did address the media. I did go on CNN. I think your question seems to presuppose that the problem was the track and that was not the information that we were getting. The track was evaluated a number of times. And the information that I received from our person, Mick Peterson, is that there was no data or no information that he received from his usual tests that raised any particular issue that could be rectified.

I also went into the jocks' room on the day and spoke to as many jocks as possible. I feel like a good way of determining whether or not the track is a problem is asking the jocks who are actually on it. The feedback that I got is 'no, the track was not the problem.'

[However], breakdowns are multi-factorial and we still need to make sure that we finish our investigation to be confident that there was not a track issue.

TDN: Talking of HISA's racetrack safety rules, it currently requires that every racetrack have necropsies performed on horses that are euthanized or die on their property. Is that happening right now?

Yes, it is happening.

TDN: Every single horse that dies on a racetrack that falls under HISA's umbrella undergoes a necropsy?

I mean, that's absolutely our rule. We follow up and whenever we become aware of a horse death on the racetrack. We reach out to the racetrack to make sure that the horse was sent for a necropsy. In some situations, if we have pushback from the racetrack, we take on the financial responsibility and then bill back the racetrack after.

There's a number of racetracks where the bills from the necropsies come right to me because we're concerned that the racetrack may not agree to make those financial promises or agree to pay for it. So, to my knowledge, yes, every horse that breaks down on the racetrack goes for a necropsy.

TDN: What about equine fatalities both during training and during racing–is HISA currently collecting that information from all participating tracks?

That is required. To the extent that we've audited it, if we see that something is missing or we're aware of it, we let the racetracks know. Obviously, it's a lot harder for us to audit and monitor whether or not we're getting all the information from training. It's far easier for us to identify if there's a breakdown in a race.

In terms of how long we'll be able to send the data back [to the public], what we've talked about internally is that we need at least one full year. Where we start that year may not be July 1 based on the amount of information that we have. But we do plan to share with the public our findings and we've already done that in certain areas.

TDN: In terms of the 2023 fee assessments, HISA has either received payment from the state commission or at least one racetrack in the following 10 states: Arkansas, California, Colorado, Florida, Illinois, Indiana, Kentucky, Nebraska, New York, Pennsylvania. But exactly how are HISA's operations currently being financed?

Two ways. One, we were under budget for 2022, so that allowed us to use the operating cash into 2023. When we send the [2023 fee] assessments to the states, we offer them a credit for their assessment from what was saved in 2022. We also did have to go back to our original lenders for some additional loans.

TDN: Who are these lenders?

The Jockey Club, the Breeders' Cup and the NTRA.

TDN: Will the industry have to pay these lenders back?

That's still a work in progress. I can't answer that question yet.

TDN: What about interest rates?

Pretty much no interest. The most recent ones are short term just to cover our operational costs.

TDN: Finally, with the ADMC program launching on Monday, what do you want to tell the industry?

I truly believe that once we launch and we have an opportunity to get going, that anybody who is on the fence or had concerns will feel confident, that this is absolutely the right move for the industry, and that we balance the key important issues for the industry.

I think most horsemen would say they want a uniform medication control program, they want uniform sanctions, shorter timelines and more efficiencies. Once we actually launch the ADMC program, there will be collective recognition of the value that provide for the industry.

I also think we'll be able to grow trust within the industry that we're doing this the right way, we're doing it ethically, we're doing it professionally, we're doing it responsibly, and that everyone is going to benefit, not just the horses.

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In issuing his order, United States District Court Judge James Wesley Hendrix of the Northern District of Texas (Lubbock Division) pointed out that it is the second time in two weeks that he has informed the plaintiffs in a court order that they have not established a likelihood of success on the merits of their case.

The judge also stated in the May 17 order that the horsemen “misunderstand” the legal standards that apply to the granting of an injunction in this particular instance.

“The Court denies the motion for an injunction pending appeal,” Hendrix wrote. “As detailed in its 55-page Memorandum Opinion and Order [issued May 4], the plaintiffs have not established a likelihood of success on the merits. And even if their proposed standard applied, they have not made a substantial case on the merits given the congressional amendment in response to the Fifth Circuit's opinion…

“Because the plaintiffs have not established a right to an injunction pending appeal under either the correct standard or their preferred standard, the Court denies the motion,” Hendrix wrote.

“The plaintiffs misunderstand the correct standard for a district court considering a motion for injunction pending appeal,” Hendrix continued, adding at a later point, “The 'substantial case on the merits' standard does not apply to injunctions pending appeal.”

The planned appeal to the Fifth Circuit is the latest wrinkle in a lawsuit that has lingered in the courts for over two years.

On Mar. 15, 2021, the NHBPA and 12 of its affiliates sued personnel from the Federal Trade Commission (FTC) and the HISA Authority, seeking to keep HISA from being implemented. Judge Hendrix dismissed that suit on Mar. 31, 2022.

The NHBPA plaintiffs appealed, leading to a Fifth Circuit Court reversal on Nov. 18, 2022 that remanded the case back to Hendrix's court. In the interim, an amended version of HISA got signed into law on Dec. 29, 2022. That fix was designed to make HISA compliant with the constitutional defects the Fifth Circuit had identified.

On May 4, 2023, Hendrix validated the newer version of HISA as constitutional. One day later, the NHBPA informed him it is planning another appeal back to the Fifth Circuit, and it wanted the ADMC's rollout stopped while that process played out.

On May 8, Hendrix wrote that, “The Court previously denied injunctive relief, but the plaintiffs again request an injunction, arguing that they will be injured by the ADMC rule during the pendency of an expected appeal.”

Nine days later, on May 17, Hendrix handed down his decision denying that motion, noting that “the Court is not persuaded by these passing references to [cases that the NHBPA cited as precedents], especially when the plaintiffs have not identified any case in which a district court granted an injunction pending appeal after denying a motion for preliminary injunction (much less following a consolidated bench trial).”

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Already this year, the Fifth Circuit Court of Appeals denied a motion by the HISA Authority for that court to vacate its recent opinion that HISA is unconstitutional, and instead sent two different cases back down to the district court level.

In response, the Texas Racing Commission–which has so far barred the federal law from being enforced in its jurisdiction–said the action meant Texas tracks could once again beam their simulcasting signals out-of-state. Sam Houston, which is currently running, has so far refrained from taking that course due to the “” swirling around the matter.

At the end of January, the FTC published HISA's Anti-Doping and Medication Control (ADMC) rules on the Federal Register, initiating a 14-day public comment period. Should the FTC approve them, HISA has set a program implementation date of March 27.

All the while, two other HISA-related lawsuits are working their way through the courts–one currently before the Sixth Circuit Court of Appeals, and the other in the Texas Northern District Court, Amarillo Division.

To get a handle on where all this leaves HISA, the TDN once again spoke with constitutional law expert Lucinda Finley, Frank Raichle Professor of Trial and Appellate Advocacy, and director of Appellate Advocacy at the University of Buffalo Law School.

The following is heavily edited from a longer interview.

TDN: Can you give an overview of where all the latest legal actions that have come down since we last spoke leave HISA?

LF: No court has yet ruled on whether the newly amended HISA–which gives the FTC greater authority to accept, reject, or modify the HISA Authority's proposed rules–is constitutional or not. But the congressional amendments to HISA do put it on stronger legal footing on the single issue that the U.S. Court of Appeals for the Fifth Circuit addressed, the private delegation doctrine, or in non-legal parlance, whether HISA granted too much authority to make rules to a private body, instead of the FTC.

The congressional amendments make it clear that the FTC has at least as much regulatory authority as the Securities and Exchange Commission [SEC] does when it considers whether to adopt rules proposed by a private body. The SEC rule making structure has repeatedly been ruled constitutional by many federal courts.

But despite how the congressional amendment responds to the Fifth Circuit concerns about the previous version of the HISA statute, it is not surprising to me that the Fifth Circuit panel refused to consider whether to vacate their opinion or to rehear the case. It is standard appellate procedure for a federal appellate court, after they've initially ruled, to send things back to the district court. The district court will be the first one to determine whether the amendments that Congress recently made are sufficient to satisfy the concerns that the Fifth Circuit had.

The other thing that the Fifth Circuit did is to lift a stay or a suspension of an injunction that another district court had issued against enforcing HISA in Louisiana and West Virginia. So, HISA cannot legally enforce its rules in those two states. But what HISA can do is go back to that district court and argue that the recent congressional amendments have satisfied the constitutional concerns raised by the Fifth Circuit–therefore that the amendments make HISA constitutional–so they could ask that district court to remove its injunction against enforcing HISA in West Virginia and Louisiana.

How I interpret the recent Fifth Circuit decision not to vacate its November ruling and not to rehear its November decision is to simply say: Take your arguments back to the district courts, let the district courts consider those arguments in light of our November ruling and in light of the amended statute.

TDN: Do they go back to the same district court?

LF: No, they go back to the district courts in which each case originated. One of them goes back to a district judge who initially found HISA, even before Congress amended it, to be constitutional. The other case, the West Virginia and Louisiana case, goes back to a district judge who expressed grave concerns about HISA's constitutionality prior to amendment.

TDN: In the district courts, are the plaintiffs likely to challenge other provisions of HISA?

LF: Several of the cases challenging HISA do raise other constitutional challenges in their original complaints, and they can argue all those other challenges back in the district court. If they didn't raise them [before], they could possibly ask to amend their complaints to raise other constitutional challenges.

In cases against HISA filed around the country, some of them challenge the way members of the private Authority are appointed, arguing that because they are functioning like federal government officials, they should be appointed through the process the constitution and federal statutes lay out for appointing and removing federal officials.

Now, that argument could be affected by Congress's recent amendments.

Before HISA was amended, plaintiffs' main argument was it delegated too much governmental authority to the private Authority, thus the private Authority was really acting like a governmental agency. So, if the courts think the new congressional amendments now leave the FTC with greater final say over what the HISA rules are, a judge may be less likely to accept the challenges to how members of the private Authority and its board are appointed. Again, to compare the HISA structure to the SEC, the way that members of the private body–known as FINRA–that proposes rules to the SEC are appointed has been upheld.

There are also cases bringing constitutional challenges to the private Authority's investigatory and enforcement powers. They claim that giving so much authority for investigating and punishing violations to a non-governmental body violates due process of law. No court has yet decided that argument.

In my opinion, that constitutional argument is weaker because under the HISA statute, there is a process for appealing any sanction based on an investigation of a rule violation–it can go up through a well-established administrative appeal process with federal administrative law judges, who are the ones hearing the appeal.  That means that no punishment is final until it is ruled on by a federal official.

TDN: What you're saying is the Congressional amendment potentially has influence on the overall constitutionality of HISA beyond that one provision it was designed to fix…

LF: Yes. Congress's amendments to HISA responded only to what the Fifth Circuit had found to be the problems. But those problems were kind of an umbrella. The fifth Circuit issue was: Did the statute give too much regulatory authority to the private Authority? Congress's amendment has addressed that and clarified that the FTC is now a lot more than a rubber stamp.

And so, if a judge now decides that that congressional amendment makes the HISA structure much closer to the SEC structure–which has been upheld as constitutional, including the way in which people are appointed to the private entity, FINRA, and in its investigatory authority–then it is more likely that the other challenges to HISA would not be accepted.

Although, let me clarify. There is a difference with the SEC's process for investigating alleged violations of its rules. The SEC has its own government employees doing the investigations and the initial determinations. Under the HISA statute, the initial investigations and determinations are not done by FTC government employees–they're done by employees of the private Authority. That is still a potential challenge which has been raised in some of the lawsuits around the country.

TDN: Do you think this action might have any influence on the FTC's pending decision on whether or not to approve HISA's ADMC rules?

LF: I don't think it will. I mean, as soon as Congress amended the statute, the FTC said, 'now we're going to go ahead with the rulemaking process on the medication rules.' That is a strong signal.

Right now, we have a situation where the groups that are opposed to HISA have been throwing every legal argument they can think of at the statute, hoping that something sticks. Well, something did stick with the Fifth Circuit and Congress responded to that. So now, all the groups that are opposed to HISA are going to try to argue back in the district courts that the congressional fix isn't enough, and to then throw other arguments against HISA.

There's a long litigation road ahead for the statute and the Authority. I think I'm going to start calling the HISA statute the 'full employment for the lawyers' statute. The real people benefiting are the lawyers getting all these cases.

TDN: Given the swirling legal uncertainty, if the FTC approves the ADMC rules and they go into effect, will the Authority be leaving itself open to strong legal challenges when the first medication violation adjudications come rolling in?

LF: Well, let me put it this way. Trainers that have been sanctioned under the old system of each state determining its rules and sanctions have shown a propensity for hiring as many lawyers as they can to appeal and try to get their penalties reduced or vacated. Why would that change just because the penalty is for a HISA rule as opposed to a state commission rule?

TDN: And running up against the federal government is a little different than running up against a state commission?

LF: Yes, and that may be one of the things that the various HBPAs are worried about.

TDN: The Texas Racing Commission stated that the recent Fifth Circuit Court of Appeals action means that HISA has no jurisdictional authority in the state, and therefore, they can beam their simulcasting signal out-of-state once more. The Sam Houston lawyers are more circumspect. Who's right?

LF: The Fifth Circuit did not issue an injunction against the statute and rules. It was just what's called a declaratory judgment. So, there is not currently any binding legal order that applies in Texas that prohibits HISA from acting.  The HISA statute applies to any entity that simulcasts into other states, so if any Texas track does start sending its signal to other states, it will be subject to HISA unless a court issues an injunction prohibiting HISA from acting.

But should HISA try to enforce any regulations in Texas, whoever was the target of any enforcement could sue to get an injunction saying, 'you can't enforce your rules if this circuit said you're unconstitutional.' So, in a roundabout way, the Texas Racing Commission is correct but–and this is a big but–only for the superseded version of HISA before the congressional amendments. If the courts rule that the congressional amendments fix the problem found by the Fifth Circuit then they would not enjoin HISA from acting in Texas. So I think the circumspection of the lawyers for Sam Houston is warranted.

Eventually, where is this all going in Texas or any other objecting state? It's becoming a game of whack-a-mole. The Fifth Circuit says this part of HISA is unconstitutional. Congress fixes it. Now, some other court says, 'another part of HISA is unconstitutional.' Well, Congress could then fix that. All of the challenges to HISA are delaying implementation, but ultimately, I do not think they will not stop the movement towards uniform national rules for the multi-state business of horse racing.

TDN: There's another case in the Northern District of Texas, Amarillo. Do you know what's happening with the case-and do you still think this could prove a major headache for HISA this year?

LF: There's been no further decisions in that court. That judge has to follow the Fifth Circuit decision on the challenge to the previous version of HISA about the allocation of responsibility between the FTC and the private Authority. Before that Judge, HISA and the FTC will argue that the newly amended statute satisfies the Fifth Circuit concerns, and that judge could allow the newly amended rules to go into effect. But as I said in our previous conversation, that case in Amarillo does have a lot of other challenges to HISA, such as to the way members of the Authority are appointed and the investigatory process and powers given to HISA.

If you file a case in the Amarillo branch of the Federal District Court for that part of Texas, you get Judge [Matthew] Kacsmaryk. He has quickly gained a reputation based on his rulings for being very hostile to broad federal regulation, and he has all kinds of hot button issues being brought to him, asking him to undo often decades of federal regulatory schemes. So, that's why I said it's the case that could become a major headache for HISA, because that case would get appealed to the Fifth Circuit which has already shown scepticism about the extent to which Congress delegates federal power to a private entity.

TDN: Where does this leave the pending ruling in the Sixth Circuit?

LF: The Sixth Circuit, because they haven't ruled yet, has more options before them based on the congressional amendment. The Sixth Circuit asked the lawyers to submit briefs addressing how the congressional amendment affected the appeal. The Sixth Circuit could say, 'well, the HISA statute has changed in significant ways. We want to let the district court start afresh and assess the parties' arguments based on the new statute.'

There really doesn't seem to be a lot of point for the Sixth Circuit to issue an opinion about whether they think a now superseded version of the statute is constitutional. So, I think it is likely that the Sixth Circuit will decide the appeal before them is moot and send it back to the district court, where the HISA and FTC lawyers will try to persuade the district court judge that the congressional amendments do solve all the constitutional concerns that the Fifth Circuit raised.

TDN: Do you think HISA is right to forge on with implementation of the full program (pending FTC approval), or do you think it would behoove them to put the breaks on while all the legal shenanigans play out?

LF: This is asking for my personal opinion–I'm trying to provide an impartial legal view. But I think that yes, the HISA Authority is pursuing the right course. Remember, several states have voluntarily agreed to follow their rules. So, for those states who've said, 'we participate in this, we want to follow your rules,' these rules need to be developed.

This is maybe getting a little too deep into the weeds, but the judge in Amarillo is famous for issuing nationwide injunctions. If the judge in Amarillo were to do that, then HISA would be legally prohibited from implementing its rules anywhere. But in the meantime, there isn't a national injunction, so, why wouldn't they continue knowing that there are a substantial number of states–including some of the most prestigious racetracks and racing circuits in the country–that want to follow their uniform rules?

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“We have determined that more time is needed to fully evaluate the many legal complexities surrounding recent court decisions and the HISA amendment enacted by Congress at the end of last year,” the statement read. “While we are eager to export our signal across the country, our commitment to maintaining federal and state compliance remains our top priority. We will export our signal across state lines when we are confident that it can be done in accordance with applicable laws and regulations. Until then, we will only broadcast our signal throughout Texas and to approved international locations but will not simulcast to any other locations in the United States.”

The statement can be read in full at https://www.shrp.com/.

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Last year, the TXRC argued that it was statutorily barred from joining HISA, and because the enabling federal legislation gave the HISA Authority regulatory jurisdiction over the interstate simulcasting of races, the commission prohibited Texan tracks from exporting their signals.

“I called the Sam Houston Park general manager this morning and asked him to provide me an export request, and I've already approved them,” said TXRC executive director Amy Cook, who also wrote in a memo Wednesday to licensees that the Fifth Circuit's decision finding the law “facially unconstitutional” meant it has no effect on the State of Texas.

Chris McErlean, vice president of racing for Penn Entertainment, Sam Houston's parent company, confirmed that the simulcast signal will be beamed to its out-of-state partners when racing resumes this Friday. Sam Houston's current season began on Jan. 6 and ends Apr. 8.

“We have multiple racetracks, so, our contracts cover all our tracks. Everybody was ready to go as soon as there was some change in the status,” said McErlean. “It's literally the flick of a switch to get it going. We welcome the change. Sam Houston's a good wintertime meet on the schedule for a lot of people, and we're glad people will be able to see it live to bet on.”

When asked to comment on the TXRC's actions, HISA spokesperson Mandy Minger wrote in an email: “The Fifth Circuit's decision concerns only the prior version of HISA, before Congress amended it to remedy the constitutional concern the Fifth Circuit identified. No court has expressed any constitutional concern about, let alone enjoined, the current version of HISA now in effect. We look forward to working with the Texas Racing Commission and Texas racetracks should they resume operations falling within HISA's jurisdiction.”

Early last year, the State of Texas and the TXRC joined as intervener plaintiffs on one of the cases before the Fifth Circuit, led by the National Horsemen's Benevolent and Protective Association (NHBPA).

On Jan. 3, the HISA Authority asked for the Fifth Circuit's Nov. 18, 2022, anti-constitutionality order to be vacated based on a federal rewrite of the HISA law in December.

On Tuesday, the Fifth Circuit panel of judges denied this motion and also shot down separate motions for a rehearing of the case made by both the HISA Authority and the Federal Trade Commission (FTC).

After ruling on those two motions, the Fifth Circuit then issued a mandate that stated, “It is ordered and adjudged that the judgment of the District Court is reversed and remanded to the District Court for further proceedings in accordance with the opinion of this Court.”

The Fifth Circuit encompasses the states of Texas, Louisiana and Mississippi.

Cook explained that her policy decision last year to prohibit the export of simulcast signals from the state's tracks was made “hoping for the legal outcome that HISA has no legal jurisdiction in our state.

“We have avoided HISA jurisdiction because we didn't think that regulatory scheme was constitutional as a policy decision, and now we've avoided it in a legal decision as well,” Cook added. “We were certain that we were going to prevail, but I needed to provide certainty.”

Cook wrote in a memo Wednesday to licensees that, “All horseraces in Texas will continue to be conducted in accordance with the Texas Racing Act and the Texas Rules of Racing.”

This means that Texan racetracks continue to operate in a similar position to those in West Virginia and Louisiana, in that they are bound under the state's regulations and not HISA's safety regulations that went into effect in July last year.

With no simulcast signals beamed out of the state for months, concerns have understandably surrounded the impact on purses from a massive drop in handle.

In early January, the Daily Racing Form reported total wagering had dropped from $11.75 million on six days of live racing in 2022 to $1.04 million on seven days of live racing in 2023. The average per-race handle reportedly declined 92.3%.

The TDN's Bill Finley reported that Saturday's handle at Sam Houston for the Houston Racing Festival was $488,385. Last year, when the races were run on a Sunday, the handle was $5,698,052–a decline of 91.4%.

Cook was unable to provide specific figures as to the numerical hit on the state's purse account, but she played down the impact by saying that out-of-state simulcasting at Texas tracks accounts for roughly 15% of the total purses, the latter of which is bolstered by state subsidies and an increased percentage of on-track handle.

“It's not that we don't think [HISA] has an admirable goal, it's the way they're going after the goal,” said Cook, raising alternative uniform regulatory approaches to HISA, like a “cooperative agreement” model.

“It's not personal,” Cook added. “I told Lisa [Lazarus, HISA CEO] that when she came to Texas. I invited her. She came June 8. I drove her round in my pickup truck, and I said, 'It's not personal but you have a problem. You don't have a sustainable resource model here.'”

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The Houston Racing Festival highlights the stakes schedule and will be contested Saturday, Jan. 28 with a 1:00 p.m. first post. The 2023 edition will offer five stakes races, anchored by the $300,000 GIII Houston Ladies Classic S. and the $200,000 GIII John B. Connally Turf S. The $100,000 Bob Bork Texas Turf Mile S., $100,000 Bara Lass S. and $100,000 Groovy S. will be included on the undercard.

“The new schedule and start times present an opportunity to engage with our loyal simulcast guests and attract new fans with daytime racing,” said Frank Hopf, Sam Houston Race Park's Assistant General Manager. “Moving our stakes races and promotions to the afternoons will provide new opportunities for everyone.”

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