Posted: April 27, 2022
Racing commissions in Pennsylvania, West Virginia and Delaware during meetings held April 26 announced that they will not remit and collect fees for the Horseracing Integrity and Safety Authority, whose Racetrack Safety Program takes effect July 1 under the federal Horseracing Integrity and Safety Act of 2022.
The meetings brought to light numerous lingering questions as the launch of HISA in the Thoroughbred racing industry rapidly approaches. In April, the Maryland Racing Commission and New Jersey Racing Commission voted not to remit and collect the fees. The deadline for states to “opt in” as the payment agent is May 1.
Under HISA, should racing regulatory agencies not remit and collect fees, the task falls to the racetracks in each state. Each state, through the individual tracks, is charged an assessment based on a formula tied to number of starts and purse structure.
The Pennsylvania Horse Racing Commission, after taking comments from racetrack representatives, voted unanimously to not remit and collect fees as there is no statutory mechanism for it to do so. Tom Chuckas, PHRC Thoroughbred Bureau Director, also noted that an opt-in covers the next 12 months, so racing commissions would be agreeing to collect fees for the Anti-Doping and Medication Control Program, which is scheduled to take effect Jan. 1, 2023, without knowing how much it will cost.
The PHRC, however, reiterated that it has and continues to support the goals of HISA regarding uniform regulations, integrity standards, and rules that ensure the health and safety of equine and human participants.
PHRC Chairman Russell Redding said the process thus far “has left us with some concerns, and there is a significant level of uncertainty. We have no authority under statute to impose fees. We support the goals (of HISA) but there is a lack of detail and uncertainty about budgets. We will continue to discharge our statutory mandates on health, safety and integrity.”
Joe Wilson, Chief Operating Officer of Parx Racing, said the track’s assessment for the Racetrack Safety Program for the final sixth months of 2022 is about $700,000. As a National Thoroughbred Racing Association-accredited racetrack, Parx has implemented about 90% of the code of standards, he said, but expressed concern about finding qualified personnel to carry out the HISA rules.
Wilson asked PHRC counsel Jorge Augusto if state statute allows racetracks to remit and collect the HISA fees.
“There is no provision for tracks to assess fees,” Augusto said. “The only permitted fee are licensing fees. The track does not have the authority but that doesn’t mean HISA won’t think otherwise.”
Chris McErlean, Vice President of Racing for Penn National Gaming Inc., said the company has been engaged with HISA for several months regarding its responsibilities and how the assessment process will work. Penn National Race Course is on the hook for $250,000 from July-December 2022.
McErlean said he expects there to be a need for additional personnel and equipment, so “racetracks are in for more than just the assessment. I hope the commission beginning today can look at ways so future assessments can be borne or shared in commission budgets.”
“It puts an unfair, undue burden on racetracks,” McErlean said. “It’s an unrealistic request. We conceptually support HISA but we are very concerned about the impacts HISA will have from the financial point of view and personnel. It will make Thoroughbred racing much more difficult to operate.”
The West Virginia Racing Commission, which has regularly voiced its opposition to HISA, took no action on assessments in order to wait for guidance from the office of Gov. Jim Justice and the state Attorney General’s office. The latter is party to one of two lawsuits challenging the constitutionality of HISA.
In addition, the commission opted not to sign what is called a “voluntary agreement” to carry out HISA’s rules and regulations.
“It’s important to point out HISA is a private entity,” WVRC Executive Director Joe Moore said of the authority. “One reason I would advise not to sign it is you are offering up state employees to carry out a private entity’s rules. There is no mechanism in the budget for receipt of revenue, just (a reduction) in a future assessment.”
Jim Miller, President of the Charles Town Horsemen’s Benevolent and Protective Association, wondered how the tracks will be able to pay the annual assessments and find the personnel to meet the demands of the HISA program. The tracks can direct other stakeholders, such as horsemen, to pay a share of the cost.
“We definitely cannot afford it when all of our costs have gone up the last couple of months,” Miller said. “It’s a great overreach. And there are some other issues coming. How do the tracks pay HISA? (If they can’t), we could lose our right under the Interstate Horseracing Act to (export our signal). They have created a bureaucracy that is unaccountable to anyone.”
Moore told the commission future assessments could be avoided if the state agrees to create a new revenue stream for the WVRC to absorb the assessment. “That’s at least two years off,” he said, “but we need to find some way to play ball in order to export our races.”
The Delaware Thoroughbred Racing Commission also decided not to opt in to remit and collect HISA fees. The six-month assessment for Delaware Park, which opens in late May, is about $250,000. The state Department of Agriculture, which oversees horse racing in Delaware, indicated a willingness to seek a state grant that would compensate for this year’s Racetrack Safety Program assessment.
Racing regulatory agencies have been told they will know by October how much the Anti-Doping and Medication Control Program will cost in 2023 and also will receive a budget for next year’s Racetrack Safety Program. HISA as of late April had not announced which entity will oversee the medication and testing aspects of its program.