HISA 2023 State Assessments on Hold, for Now

A decision Dec. 12 by the Federal Trade Commission to disapprove the proposed Anti-Doping and Medication Control rules submitted by the Horseracing Integrity and Safety Authority also puts on hold the $58.1 million in payments states were required to make next year to fund the new program.

"We are not going to pursue collecting the fee assessment during this period because a vast majority of those fees relate to the launch of the anti-doping program," HISA CEO Lisa Lazarus said in a press conference to discuss the FTC decision. "We are going to wait for clarity from the courts in order to move forward with the assessments.

"The assessments for 2022 are still required from the state commissions and the racetracks because those costs have already been incurred."

HISA's total budget for 2023 is slightly more than $72.5 million, which includes nearly $37.4 million for operating the Horseracing Integrity & Welfare Unit and the drug-testing work to be done by Drug Free Sport International. The HIWU is expected to have 35 full-time staff members by the end of the year to implement its mission of implementing sound collection protocols and work to maintain continuity with existing collectors, in addition to work on testing operations, compliance, quality assurance, education and industry outreach, state racing commission relations, and collaboration with laboratories, investigations, and technology.

Among other items, the 2023 budget also includes more than $18.7 million for lab and research expenses associated with implementing the ADMC program.

Ben Mosier, executive director of the HIWU, said in a Monday statement that his unit has spent the past seven months preparing for the program's implementation Jan. 1 and was ready to enforce the new national program if the new rules had been approved by the FTC.

"HIWU will continue its education and outreach efforts to all stakeholders in the Thoroughbred industry," he said. "As HISA resubmits the draft ADMC rules for the FTC's approval, HIWU will use any additional time before implementation as an opportunity to ensure the industry is even more prepared for an efficient rollout of this program."

Any costs associated with HIWU's additional preparatory work will be covered by the 2022 budget, according to Lazarus, provided that the work does extend beyond two or three months.

"If it extends longer, then we'll have to revisit that issue. The new money was related to actually running the program," she said.

State racing commissions received their assessed share of HISA's operating costs in October. These assessments were derived from a methodology incorporated in HISA's 8500 set of rules and regulations that have been reviewed and approved by the FTC. The formula is derived from total starts and the percentage of purses paid (not including the Breeders' Cup World Championships races) of total U.S. purses. No state assessment can exceed 10% of the total purses paid within that state. All amounts in excess of the 10% maximum are allocated proportionally to all states that do not exceed the maximum, according to the rule.

The top five states by the HISA assessment are New York ($8,660,471), Kentucky ($7,445,145), California ($7,344,139), Pennsylvania ($6,611,479), and Florida ($6,445,226).

If a state commission chooses not to pay its assessment—spread out in monthly payments—then the expense is passed along to the racetracks. In a state with multiple tracks, each track is assessed a portion of the state's monthly obligation based on its proportionate share of starts.