ARCI: Undefined HISA costs may threaten 35 tracks
October 07, 2020
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The new federal legislation being rushed through Congress will have a positive effect on the racing industry by mandating uniform and expanded anti-doping and medication policies but may have a devastating negative affect if the unknown costs force smaller and midsized racetracks, owners, trainers, and breeders out of business, according to an analysis prepared for the Association of Racing Commissioners International (ARCI).
“S.4547 is better than the previous proposal in some ways, but concerns still exist as to whether it actually goes far enough to protect and regulate the care given young horses,” RCI President Ed Martin said, noting that the ARCI has not taken a position on the McConnell bill and is unsure if it will given reports that it may be a “done deal.”
The purpose of the analysis is to highlight changes that need to be understood early in order for there to be a smooth transition, Martin said. “This is enormous and I am not sure everyone understands how this might play out, especially given the fact that costs have not been explained, only how they are to be collected.”
US state racing commissions spend upwards of $21 million each year on the drug testing program. The analysis raises the possibility that some state budget offices and legislatures may opt to shift that money to other state needs by handing off their programs to newly formed Horseracing Integrity and Safety Authority (HISA), which can independently tax racetracks, breeders, owners, trainers and veterinarians for program costs.
Under this scenario, there is a real risk that racing industry interests may end up paying twice as the prospects for an industry specific tax cut to prevent that in most states may prove elusive.
35 Racing Venues in 19 States Put on “Watch List”.
The analysis puts over 35 racing venues in 19 US states (all Thoroughbred, because presently the HISA bill does not address Standardbred racing) on a “watch list” based on concerns about the overall economics of racing and their ability to absorb undefined new mandated costs anticipated to be imposed by enactment of S.4547. Among the states are Illinois, New Jersey, Kentucky, Massachusetts and Delaware
An inability or failure to absorb additional costs of doing business may force hard decisions by the ownership of these entities which may impact the extent or continuation of racing activity. Racing commissions and policy makers are being urged to work with these entities to clearly understand the legislation’s impact locally.
“The sponsors and proponents of this legislation need to release detailed cost estimates for various scenarios for individual states,” Martin said. “I am shocked that members of Congress would actually pass this bill without knowing the impact locally.”
Impact on Investigations and Involvement of Federal entities.
There is a widespread impression that the newly formed Horseracing Integrity and Safety Authority (HISA) will have new investigatory powers beyond those that currently exist for the state racing commissions. S.4547 does not grant any expanded authority to the new entity.
“The recent federal indictments like those before them were the result of multi-agency cooperation where the work of state racing commissions were built upon and expanded by the reach of a federal law enforcement agency using federal wiretaps or other tools reserved for law enforcement,” Martin said. “This bill does not give HISA racing investigators law enforcement status.”
The bill also fails to include a proposal made by the ARCI at hearings on the previous Horse Racing Integrity Act to create designated desks in key federal agencies - the Department of Justice, the Federal Bureau of Investigation, Drug Enforcement Agency, and the Food and Drug Administration - to assist racing investigators and work to facilitate the involvement of federal law enforcement or regulators in pursuing racing related cases.
Other Key Changes:
The analysis underscores additional changes:
• Creation of a uniform point of equine regulation beginning with the first timed workout for each covered horse;
• The HISA would have broad authority to regulate and control the administration of all medications given a “Covered Horse”;
• Inclusion of Breeders as a source of regulatory fees to help pay for the new program;
• Apparent less transparency than exists under the current system as current Open Meetings, Public Records Access, State Ethics laws, and independent audit and investigation of the regulatory entity have not been addressed;
• Consistent testing thresholds for all laboratories;
• A shift of the testing laboratory accreditation program away from the Racing Medication and Testing Consortium to the HISA
• Language to limit the direct participation by the existing network of expertise currently relied upon by the State Regulators and racing industry at large.
Anyone interested in receiving a copy of the analysis should request one by emailing firstname.lastname@example.org or by clicking here. (Association of Racing Commissioners International)