Thoroughbred Horsemen's Association
Posted: Dec. 5, 2024
Churchill Downs Inc. and the New York Racing Association have filed a lawsuit against the Horseracing Integrity and Safety Authority challenging its Assessment Methodology Rule, which is the basis for the funding of the HISA Anti-Doping and Medication Control Program and Racetrack Safety Program.
The lawsuit was filed Dec. 4 in the United States District Court, Western District of Kentucky, Louisville Division. It asks in part that the court declare that the authority’s purse-based assessment methodology and the Federal Trade Commission’s approval of the purse-based assessment methodology violate United States law.
The Horseracing Integrity and Safety Act of 2020 requires HISA to determine each state’s proportionate share of the annual fees necessary to fund operations based on “the projected amount of covered racing starts for the year in each state. Yet, the authority unlawfully adopted—and the FTC unlawfully approved—an assessment methodology that imposes fees based largely on the size of a racetrack’s purses rather than a state’s share of racing starts,” the lawsuit states.
The suit notes that HISA this year submitted to the FTC for consideration a revised methodology that would eliminate consideration of purses paid and base fees solely on projected starts beginning Jan. 1, 2026.
CDI (Churchill Downs, Ellis Park, Turfway Park, Fair Grounds Race Course & Slots, and Presque Isle Downs & Casino) and NYRA (Aqueduct Racetrack, Belmont Park, and Saratoga Race Course) have “declined to remit the full amount of fees (HISA) has demanded from them. Instead, CDI and NYRA have remitted fees to the authority in accordance with methodologies that would be equitable and consistent with the act’s statutory mandate that fees bee based on the number of racing starts, not the value of purses,” the suit states.
In a release, HISA said it will “aggressively defend itself against a recent lawsuit by Churchill Downs Incorporated and the New York Racing Association filed in the companies’ attempt to avoid paying their fair share of HISA’s fees (Rule 8500 Series). CDI and NYRA have refused to comply with the Assessment Methodology Rule, as approved by the Federal Trade Commission. The rule was created to properly and equitably allocate the costs of HISA’s operations to state racing commissions and/or covered persons involved with covered horse races. CDI and NYRA are the only two racing organizations subject to this rule that have refused to remit their share of fees,”
“HISA was established with a clear mission: to create uniformity and consistency across Thoroughbred racing,” HISA Chief Executive Officer Lisa Lazarus said in the release. “Our rules, including the Assessment Methodology Rule, were developed after thorough consideration and many opportunities for input from racing participants, and have been approved by the Federal Trade Commission. Despite this, CDI and NYRA are refusing to comply with the assessment methodology, which is designed to ensure HISA is adequately funded and able to effectively oversee the Anti-Doping and Medication Control Program and the Racetrack Safety Program, as required under the Horseracing Integrity and Safety Act.
“CDI and NYRA have both benefited greatly from HISA’s uniform safety rules, expertise and oversight, particularly over the past two years. That uniformity must extend to cost assessments as well. To do otherwise would be unfair to other tracks and industry participants who are paying their fair share. HISA will continue to uphold the standards of the sport with integrity and fairness for all racing participants. Our mission is clear, and we will not allow any parties to pick and choose which rules they follow. Every racetrack, including CDI and NYRA, must operate under the same paradigm. No one is exempt.”
HISA had scheduled a hearing in the enforcement action against CDI and NYRA for Dec. 5, according to the lawsuit.
“The authority has thus threatened to effectively shut down CDI’s and NYRA’s horseracing businesses unless they remit millions of dollars in fees that CDI and NYRA have maintained were illegally imposed,” the suit states. “Absent relief from this court, the order the authority seeks would immediately force CDI and NYRA to cease those operations, which would not only cost the companies significant revenue but also imperil thousands of jobs that rely on these racetracks unless CDI and NYRA submit to the authority’s demands to remit fees pursuant to an illegal assessment methodology.”