Posted on: December 9, 2024, 12:03h.
Last updated on: December 9, 2024, 12:39h.
Kentucky Derby owner Churchill Downs Inc (CDI) and the New York Racing Association (NYRA) are suing the Horseracing Integrity and Safety Authority (HISA) for threatening to shut down their racing operations for nonpayment of nearly $5 million in fees. The racetrack operators argue HISA has ridden roughshod over their constitutional rights.
The lawsuit claims that national racing regulator HISA has given the plaintiffs 20 days to pay the fees. Beyond that date, they will be forbidden from offering racing for each day the payment is late, per the suit.
CDI and the NYRA argue that these fees are “illegally imposed” and violate the US Constitution and the Administrative Procedure Act (APA).
‘Illegal Fees’
At the heart of the complaint is that HISA has changed the method it uses to assess fees, which used to be based solely on the number of starts hosted by racetrack owners.
Now, the calculation is based 50-50 between starts and purses. Because CDI and NYRA offer more prize money than most other operators, they are disproportionately impacted, according to the lawsuit.
In a statement Friday, HISA said it would “aggressively defend itself” against the litigation and fight “the companies’ attempts to avoid paying their fair share of HISA’s fees.” The agency notes that the assessment methodology has been approved by the Federal Trade Commission (FTC).
The fees are 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,” the regulator said.
HISA is a private, self-regulatory organization created by the Horseracing Integrity and Safety Act, signed into law by President Trump in 2020. The Act established uniform, nationwide safety standards for the horse racing industry, which had previously been regulated by individual states. HISA was established to oversee the industry and enforce the new rules.
Judge and Jury
These rules have proved unpopular with many state racing commissions, which have been used to doing things their own way. They complain that stricter testing is expensive, and with no federal funding mechanism to support HISA’s directives, the costs are transferred onto the industry.
CDI and NYRA further complain that HISA has used its own in-house enforcement process to determine that Churchill Downs and the NYRA owe it millions and face bans.
This assumption of judicial powers by a private entity is a violation of Article III of the US Constitution according to the lawsuit. It’s a matter that should be decided in a federal court, the plaintiffs argue.
