By Steve Zorn
Mitch McConnell may have other things on his mind by now, but only a couple of weeks ago, the Kentucky Senator was trying to shore up his reelection campaign by posing in Lexington with a group of horse racing industry grandees to tout a supposedly new and improved version of the Horseracing Integrity and Safety Act.
After five years of effort by the Jockey Club and its allies in the industry, after spikes in horse deaths at Santa Anita and elsewhere, and after this year’s criminal prosecutions of trainers Jason Servis, Jorge Navarro and others in a widespread doping scandal. The legislation is as close as its ever been to actual Congressional passage and enactment into law. Just last week, the House Commerce Committee reported the bill out for a possible vote by the entire House of Representatives before the end of the year, the first time the legislation has made it out of committee.
Five years ago, when the initial version of the Act was first introduced in Congress, I wrote a long critique, pointing out its factual errors and its divorce from the on-the-ground realities of horse racing. Some of those problems have been addressed in the latest version, but others remain.
The new version of the Act seems to have been endorsed by every significant group in the industry except for the national Horsemen’s Benevolent and Protective Association (HBPA), which continues its rearguard defense of Lasix. Notwithstanding those endorsements, the new version of the Act is less than perfect. The Act accomplishes some major objectives, principally by establishing a uniform medication regime for the entire country, But it also has some flaws, including administrative inefficiency, high costs, and kicking the Lasix issue down the road. If, at this late date in the 116th Congress, anyone cares to amend the legislation, there’s still time to make it better.
Racing insiders have failed for years to establish a national uniform drug enforcement system, foiled by the state-by-state fracturing of authority among racing commissions and by the steadfast opposition of most horsemen’s groups. The Act steps into this regulatory morass by recognizing a strange private-public entity, the Horseracing Integrity and Safety Authority, as the ultimate arbiter of racing’s drug and safety rules.
The Authority itself is a not-for-profit corporation, recently incorporated in Delaware, but, under the Act, its rulemaking and enforcement activities would be located in the Federal Trade Commission and subject to all the administrative-law rules and due-process requirements of the federal government. For those already concerned about how long it takes to discipline those in our industry who flout the rules, that may not seem like much of an improvement. In fact, prompt action against wrongdoers might become even more difficult with federal involvement.
The new Authority would pre-empt the role of state racing commissions in two areas – medication rules and racetrack safety. But those commissions would by no means disappear; in fact, the Act gives the new Authority the ability to sub-contract some of its enforcement activities back to the states. And the state commissions would, at least initially, still have complete jurisdiction over standardbreds, quarter horses, Arabians and anything else that runs around a track. Those other breeds could be brought under the Act’s jurisdiction later, but only if they agreed to a mechanism for paying any additional costs involved.
The Act would become effective on the earlier of January 1 of the second year following enactment or 540 days after enactment. That means that, if the Act is signed into law this year, then it becomes effective January 1, 2022. The built-in delay is both to give the Authority time to get up and running and to give trainers advance notice that tougher rules are in the offing. That’s a reasonable accommodation to some of the concerns expressed about earlier versions of the legislation.
The Authority would be run by a self-perpetuating nine-member Board of Directors. In earlier legislative versions, the entire Board would have been people from outside racing, thereby guaranteeing a startling level of initial ignorance. The new bill requires that only five of the nine Directors, including the chair of the Board, be outsiders. But it also appears to require that anyone appointed to the Board – and their immediate family members – cannot have any ongoing financial interest in race horses, provide service to those horses or be an official of a racetrack or industry organization. Do Senator McConnell and Reps. Paul Tonko and Andy Barr, the original sponsors of the legislation, really mean this? And what trainer, veterinarian or racetrack executive would accept nomination to the Board without a hefty salary to replace their lost income?
About those nominations: the Act gives a seven-member Nominating Committee, composed of seven “independent members selected from business, sports and academia,” the power to nominate the Authority’s Board as well as the members of the two crucial medication and safety committees that will do the Authority’s real work. That’s a lot of responsibility for a bunch of folks whom probably don’t know a whole lot about racing.
So, what would the Authority actually do? The core of the Act is a uniform national medication policy, replacing the patchwork of state rules that currently “govern” racing. Under the Act, the new Authority would establish a permanent Anti-Doping and Medication Control Committee, which, like the Authority’s Board of Directors, would have a majority of members from outside the industry. The Committee would draft the medication rules but would not directly enforce them.
The Act contemplates that the new Authority would subcontract its drug enforcement efforts to the United States Anti-Doping Agency (USADA), which currently oversees testing of Olympic athletes. USADA, in turn, could use the existing state racing commissions for some of its enforcement efforts, all of which seems like a layering-on of additional bureaucracy rather than the simplification of a single, national medication enforcer. But the supporters of the legislation have been enamored with USADA for many years, even inviting USADA CEO Travis Tygart to the annual Jockey Club Roundtable in Saratoga to lecture the rest of us on the evils of drugs.
While most specific drug rules are generally left to the Authority to establish, the Act would flat-out ban all drugs within 48 hours before a race. The only exception is Lasix, which will be banned in stakes races and for two-year-olds as soon as the Act comes into force, but may continue to be used for older horses, if state racing commissions permit, for an additional three years while the Authority studies the Lasix issue. For drugs other than Lasix, the initial rules that will be in effect are the model rules of the Association of Racing Commissioners International (ARCI) or the International Federation of Horseracing Authorities (IFHA) rules, whichever is tougher. In any event, both the IFHA and ARCI model rules are more stringent than the rules in effect in at least some US racing jurisdictions, so drug enforcement would immediately be both uniform and tougher than the existing lowest common denominator. Once the Authority is up and running, it would have the ability to modify these initial rules, but it couldn’t make the initial rules any less strict unless USADA also approved of the changes.
And, with one exception, the new drug rules apply only to racing, not to breeding and auction sales. The one exception is that the Act makes the use of any biophosphate (prescribed for treating navicular disease in adult horses, but sometimes used off-label to build bone density in young horses) in a horse intended for racing a deceptive trade practice, subject to FTC enforcement action. Otherwise, policing of drug use in sales horses would remain as now, in the hands of the sales companies’ “conditions of sale” (which, admittedly, have become substantially more rigorous, barring some but not all drugs, over the past decade).
In addition to drug rules, the new Authority would also be responsible for setting and enforcing uniform racetrack safety standards, covering track surfaces, training protocols, collection of injury and fatality data and similar issues. The safety task is a late addition to the legislation, apparently added in order to attract broader support within the industry among those alarmed by recent spikes in breakdowns. Aside, once again, from layering another level of bureaucracy onto the industry, it doesn’t seem all that controversial.
Those are the major issues. In addition, there are some smaller problems that could be fixed by one more round of committee markups in Congress, if those involved were willing to act. Any rules proposed by the Authority would have to go through the normal federal government rule-making procedure and be approved by the Federal Trade Commission before becoming effective, and any disciplinary sanctions imposed by the Authority could be appealed within the FTC’s administrative structure and, eventually, in federal court. That’s probably not a recipe for quick action, and it stands in contrast to the ability of other major sports with powerful Commissioners to rapidly make rules and promptly punish offenders. When leading trainers like Todd Pletcher or Linda Rice can delay state racing commission suspensions for many years under the current system, fueling the $2 bettor’s belief that the game is rigged, rapid and final enforcement, consistent with due process, should have been a priority.
The one concession to efficiency in the act is a requirement that the FTC approve or disapprove any rule proposed by the Authority within 60 days after the rule has been published in the Federal Register. There’s also the usual authorization for emergency rule-making, allowing the FTC, at the request of the Authority, to adopt an interim rule immediately while the public-comment period goes on, if the FTC finds that the rule is necessary to protect the health or safety of race horses or the integrity of races.
Owners, trainers, veterinarians and others in the industry would be required to register with the Authority as a condition of participating in races, apparently with no de minimis exception. Does that mean that all 4600 people who own a tiny fractional interest in Kentucky Derby winner Authentic through myracehorse.com would have to register? Surely that’s not what the Act’s sponsors intended. Most states have a minimum threshold of 3% or 5% ownership before requiring that owners be licensed. Shouldn’t the federal Authority do the same?
No doubt, the budget of the Authority will be significant. And how is that amount to be paid for? To start with, the budget will be allocated among the states in proportion to the number of races run annually in each state. That’s a plausible method, but it seems not really fair to charge the same per-race fee to, say, Nebraska, Oklahoma or Iowa that is charged in New York, where purses and betting handle are much higher.
In turn, state racing commissions are authorized to collect the fees due to the Authority, either by charges on foal registrations or horse sales or by imposing fees on owners and trainers. Blessedly absent from this iteration of the Act is the ability to generate fees from raising takeout, but imposing fees on already-strapped trainers and small-scale owners, most of whom already lose money in racing, is unlikely to promote growth in the industry. Some rich owners, many of whom have supported the legislation from its beginnings, may think that a small increase in fees isn’t anything to be upset about, but for some not-insignificant proportion of owners and trainers, especially at smaller tracks, it could just be the straw that convinces them to find a 9-to-5 job.
The New York Thoroughbred Horsemen’s Association, which represents owners and trainers at NYRA tracks, has apparently decided that this train has left the station and has endorsed the Act. This despite the Act’s failure to remedy the most egregious failing of the 1978 Interstate Horseracing Act, which authorized nationwide simulcasting. That law gave horsemen’s groups the ability to bargain with track owners over economic issues, including the distribution of simulcast revenues. The only exception was for the NYRA tracks. To this day, NYRA is the only track owner in the US that doesn’t have to bargain collectively with its horsemen. It’s disappointing this once-in-a-generation legislation hasn’t become the vehicle for fixing this remnant of oligarchy.
New York concerns aside, the Act would indeed impose unified national drug and safety rules, and that’s a good thing. But it would impose additional costs on an industry that can’t break even as it is, and it would layer additional levels of bureaucracy on top of the cumbersome system that already exists. But perhaps that’s the price of uniformity.