Published on: December 9, 2024, 12:03h.
Last updated on: December 9, 2024, 12:03h.
Kentucky Derby owner Churchill Downs Inc (CDI) and the New York Racing Association (NYRA) have filed a lawsuit against the Horseracing Integrity and Safety Authority (HISA) for threatening to halt their racing operations due to non-payment of nearly $5 million in fees. The racetrack operators argue that HISA has disregarded their constitutional rights.
The lawsuit states that HISA has given the plaintiffs a 20-day deadline to pay the fees. If the payment is not made by the deadline, they will not be allowed to conduct racing operations for each day the payment is overdue, according to the lawsuit.
CDI and NYRA argue that these fees are “illegally imposed” and violate the U.S. Constitution and the Administrative Procedure Act (APA).
‘Unauthorized Fees’
The crux of the complaint is that HISA has changed its fee assessment method from being solely based on the number of starts hosted by racetrack owners to a 50-50 split between starts and purses. The lawsuit argues that since CDI and NYRA offer higher prize money than other operators, they are disproportionately affected by this change.
In a statement released on Friday, HISA stated that it would “vigorously defend itself” against the lawsuit and oppose “the companies’ efforts to evade paying their fair share of HISA’s fees.” The agency emphasized that the fee calculation method has been approved by the Federal Trade Commission.
The fees are intended to ensure adequate funding for HISA to oversee the Anti-Doping and Medication Control Program and the Racetrack Safety Program, as mandated by the Horseracing Integrity and Safety Act, the regulator explained.
HISA, a private self-regulatory organization established by the Horseracing Integrity and Safety Act signed into law by President Trump in 2020, was created to enforce uniform safety standards for the horse racing industry nationwide, which was previously regulated by individual states. HISA’s role is to regulate the industry and enforce the new regulations.
Legal Dispute
However, these regulations have faced opposition from many state racing commissions accustomed to operating independently. They argue that enhanced testing is costly, and without a federal funding mechanism to support HISA’s directives, the industry bears the financial burden.
CDI and NYRA also contend that HISA has utilized its own enforcement process to determine that Churchill Downs and NYRA owe millions in fees and could face sanctions.
The lawsuit asserts that HISA assuming judicial powers as a private entity violates Article III of the U.S. Constitution. The plaintiffs argue that this matter should be resolved in a federal court.