HISA Update: Federal Oversight is Coming, But When?

When the Horseracing Integrity and Safety Act (HISA) was passed in December, proponents heralded the dawning of a new day for the American Thoroughbred industry. Nearly a year later, optimism still abounds but is tempered by growing concerns that the “new day” could be delayed by months or years.

HISA is supposed to go into effect no later than July 1, 2022. However, with time ticking down, U.S. racing jurisdictions have received little information to go on. The new Horseracing and Safety Authority (also going by the acronym HISA) has announced its board of directors, standing committees, and interim executive director, but legal challenges seem to have stunted their ability to proceed unabated.

NEW FACES READY TO HELP

The nine-member HISA board is comprised of heavyweights from politics, law, academia, horseracing, and the wider sports world. Board chair Charles Scheeler was lead counsel to former U.S. Sen. George Mitchell in his independent investigation of performance-enhancing substance use in Major League Baseball.

Nearly a year later, optimism still abounds but is tempered by growing concerns that the “new day” could be delayed by months or years.

Other appointees are Steve Beshear, former governor of Kentucky and longtime horse owner and breeder; Adolpho Birch, senior vice president of business affairs and chief legal officer for the Tennessee Titans of the NFL; Leonard Coleman, former president of the National League for Major League Baseball; Ellen McClain, chief financial officer for Year UP and former president of the New York Racing Association; Joe DeFrancis, managing partner of Gainesville Associates and former head of the Maryland Jockey Club; Susan Stover, professor of surgical and radiological science at the University of California, Davis; Bill Thomason, former president of Keeneland; and D.G, Van Clief, former president of Breeders’ Cup Ltd.

At the same time the Board was announced, the Authority also revealed the members of an Anti-Doping and Medication Control Standing Committee and a Racetrack Safety Standing Committee. The seven appointees to each committee suggest a concerted effort to balance industry knowledge with independent outside expertise, similar to the board.

Hank Zeitlin, executive vice president of the Thoroughbred Racing Associations and former head of Equibase, has been tabbed as HISA’s interim executive director through the end of this year.

While not technically a HISA appointment, perhaps most critical was the announcement that Dr. Tessa Muir, former head of the British Horseracing Authority’s anti-doping program and former regulatory vet for Racing Victoria in Australia, has been hired by the U.S. Anti-Doping Agency (USADA). Terms of USADA’s involvement with HISA are still being negotiated but every indication is that they will enforce HISA’s rules, as they do for other high-profile and high-stakes endeavors like the Olympics and UFC.

LEGAL CHALLENGES SLOW THEIR ROLL

Two major lawsuits have slowed HISA’s implementation. The first was brought by the National Horsemen’s Benevolent and Protective Association (HBPA) and several of its affiliates (state- and track-level HBPAs), alleging that HISA is unconstitutional on the basis of whether the federal government can seize control of a state’s authority and turn it over to what the plaintiffs see as a private entity, the newly created Horseracing Integrity and Safety Authority (also known by the acronym of HISA). The Authority, however, reports to the Federal Trade Commission (FTC).

“This goes way beyond setting rules for the sport of horse racing,” said Brian Kelsey, senior attorney at the Liberty Justice Center, a law firm founded by conservative think tank The Illinois Policy Institute, which has taken on the case. “This is not the NBA or the NFL. The ‘Authority’ has the power to make laws, issue subpoenas and effectively tax owners with little real oversight.”

National HBPA v. Black was filed in the United States District Court for the Northern District of Texas, with Black referring to Jerry Black, a member of the HISA nominating committee who resides in that district and is one of 13 named defendants from HISA and the FTC. A hearing is expected to be scheduled before November. That proceeding will consist of arguments on constitutionality and will not include testimony.

A second legal challenge is led by the state of Oklahoma, which joined with other plaintiffs including the Oklahoma Racing Commission, the Oklahoma Quarter Horse Racing Association, the state of West Virginia, the West Virginia Racing Commission, the state of Louisiana, the U.S. Trotting Association, and racetracks Remington Park, Will Rogers Downs, and Fair Meadows.

In addition to the issue of whether HISA’s authority can be executed by a private entity, the Oklahoma case alleges that HISA’s ability to expand its scope to cover other racing breeds violates the Constitution’s non-delegation clause, which prohibits Congress from assigning its duties to private entities.

The Oklahoma case was filed in U.S. District Court for the Eastern District of Kentucky. A decision is expected to be roughly six months behind the HBPA challenge, which would put it less than 100 days from the legislated HISA implementation deadline. Appeals could drag on for years if they make their way to the Supreme Court, which is not unthinkable given the current makeup of justices that have demonstrated an interest in delineating states’ rights.

LOOKING FORWARD

Enacting HISA in 38 jurisdictions before July 1 will be a massive undertaking. Many racing states have already budgeted for their next fiscal year with little understanding of what their expenses might be or how they will be expected to cover them, but HISA and USADA officials have been meeting with state racing commissions and visiting racetracks to plan for a cooperative launch.

Several concerns were addressed publicly at The Jockey Club Round Table —the industry’s most important annual gathering—in August.

“We won’t have this where we want it to be on day one,” said Scheeler, the board chair. “But we will continue the job even after July 1st. Our program will not be a static one. It will be one that reacts to the events at the track and on the ground and one that strives for continuous improvement.”

Scheeler laid out a timeline that had the two Standing Committees presenting comprehensive programs for industry and public review by the end of the fall. The FTC will officially publish the rules, starting a required 60-day comment period. After reviewing feedback, the FTC will decide whether to adopt the recommendations of the Authority. The cost estimates and advice on structure that states need will be shared with them by winter.

“The program that we are planning will yield a stronger sport,” Scheeler said. “But this will only work if the industry is prepared to invest in its future. I submit to you that the potential upside is staggering and is worth the lift. Safer sport means more humane treatment, fewer equine tragedies, and greater public support.”

Jockey Club chairman Stuart Janney III wrapped up the meeting with a pointed message: “When the history of this is written, it will be clear who the obstructionists were and who opposed this industry’s best ever opportunity to right our badly listing ship.”