Lone Star Signal Export in Question After Court Ruling

Cutting through a morass of recent legal filings, a Texas judge denied a motion for a temporary restraining order filed by Lone Star Park asking that federal regulation of horse racing be stopped so that the Texas track could once again export its simulcast signal to other states.

Last year, Lone Star lost the right to export its signal because it refused to comply with the rules of the Horseracing Integrity and Safety Authority. The Texas track recently told Daily Racing Form it would resume export of its simulcast signal upon the filing of a motion for a temporary restraining order against HISA. However, James Wesley Hendrix denied the motion April 10 in U.S. District Court for the Northern District of Texas.

Lone Star Park executive vice president of racing Matt Vance did not respond to a message from BloodHorse seeking comment about the track's plans to export its signal in light of Hendrix's denial of its motion.

Lone Star opens April 13.

Out-of-state simulcast wagering accounts for the bulk of betting at most tracks, including those in Texas when it has been permitted. Handle plunged last July at Lone Star when it did not simulcast out of state in opposition to HISA, and betting similarly cratered at Sam Houston Race Park this year.

Texas purses are less dependent on betting than other states after the state passed legislation in 2019 that directs part of the money from sales tax on feed, tack, and horse products toward an account that funds purses. 

Hendrix is the same judge who handled a case brought against HISA by the National Horsemen's Benevolent and Protective Association and affiliated state HBPAs. He somewhat reluctantly ruled against the HBPAs, citing judicial precedent. The Fifth Circuit Court of Appeals reversed his decision, finding the underlying legislation unconstitutional on its face for failing to require sufficient government oversight by the Federal Trade Commission over the Authority, which is a private corporation.

In response, Congress passed more legislation intending to fix the issue. The Sixth Circuit Court of Appeals followed up by finding HISA constitutional while taking the amendment into consideration. After that, the Fifth Circuit declined to address the Congressional fix and instead sent the case back to federal district court and Hendrix for further adjudication.

It was against this backdrop that Lone Star filed and asked for a temporary restraining order against HISA late last week.

"The plaintiffs (in various cases filed against HISA) have consistently sought emergency relief, filing applications for temporary restraining orders, motions for preliminary injunction, and requests for expedited briefing. Now before the Court is one such example—a request for emergency relief submitted by racetrack owners in Texas," Hendrix wrote.

In its motion, Lone Star urged Hendrix to throw out HISA in its entirety or at least to enjoin its enforcement powers over the Lone Star meet. Hendrix would not do it.

"Because the Court finds that the plaintiffs have not established that they are likely to suffer imminent irreparable harm, the application is denied," Hendrix wrote.

Hendrix also wrote he would reserve the larger issue of HISA's constitutionality for another day after all the interested parties have a chance to file briefs on a motion for summary judgment. Such a motion asks for ruling on a matter of law when the underlying facts are not in dispute, and Hendrix pledged to rule on it swiftly.

"Nevertheless, the plaintiffs will get a chance to fully develop the complex constitutional issues in this case because the Court intends to expedite the pending motion for summary judgment," he wrote.

Whether Lone Star, the HBPAs, and other parties in Hendrix's court will succeed in the big picture is unresolved, but they may have cause for concern over comments in his ruling.

"There has, of course, been an intervening change in law (since the Fifth Circuit ruling)," Hendrix wrote. "Specifically, Congress amended HISA 'in response' to the Fifth Circuit’s opinion to cure the constitutional defect. The plaintiffs do not wrestle with this reality, and their three-sentence argument concerning constitutional rights does not move the needle.

"(The) Court will note here that the plaintiffs have not shown a likelihood of success on the merits, particularly by asserting that the Fifth Circuit’s decision (finding HISA unconstitutional) binds the Court and parties, notwithstanding the intervening change in law."

Hendrix is also the same judge who on March 31 granted a motion for preliminary injunction filed by the HBPAs against the new HISA medication rules. According to his ruling, the motion was approved because HISA did not observe a mandatory 30-day waiting period after the FTC approved the rules. That order is set to expire on May 1 unless a further order is entered. The injunction does not affect the enforcement of HISA safety rules, however.

-Byron King contributed to this story.