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?