Iowa Owners Sue HISA Over Prairie Meadows Assessment

Two Iowa-based horse owners are suing the Horseracing Integrity and Safety Authority and Federal Trade Commission amid a disagreement over HISA's assessment fees at Prairie Meadows.

HISA's assessment fee at the track this year is $1,187,942 before credits for commission duties done on behalf of HISA are factored into the equation. But owners in Iowa disagree with both the fee and HISA's ability to impose penalties. Leading Iowa owners Joe Kelly and Doug Anderson filed the suit. 

It is the latest lawsuit filed against HISA.

"The lawsuits so far have focused on the problem of giving an unaccountable, private entity the power to create federal policy and police horse racing. But the fact that Congress has also given HISA the power to tax is just as concerning, and Iowa's experience shows why," said attorney Ryan Koopmans, who represents Kelly and Anderson. 

In response, a HISA spokesperson said, "As with other litigation making similar claims, we will vigorously defend our ability to implement HISA's safety and integrity rules."

The assessment amount is determined using a formula incorporating starts and purse money per track. The assessment fee for Prairie Meadows is split 50-50 between the track and state HBPA. The track is current on its payments to HISA, while the Iowa HBPA has not paid its portion of the 2023 and 2024 payments because of its concerns over how HISA determines the amount. The 2024 assessment fee for the horsemen is approximately $420,000.

According to the lawsuit, the owners say the issue at hand is that HISA "included in its calculation bonus awards that are given to owners of Iowa-bred horses as 'purses,' thus inflating Iowa's share."

But a concern for some Iowa horsemen is that HISA might implement an additional fee per starter at the track to recoup the HBPA's share of the state assessment. But both sides earlier this month expressed optimism that this would be avoided. HISA confirmed to BloodHorse July 11 that a starter fee at Prairie Meadows is not imminent. 

But according to the lawsuit, after Iowa HBPA executive director Jon Moss told BloodHorse they were trying to "work in good faith," HISA general counsel John Roach contacted the HBPA the next day and said his "offer that was made in an attempt to resolve this dispute is withdrawn."

The lawsuit claims that the offer made by Roach was that if the HBPA paid what it believes to be the correct assessment for 2023 and 2024, HISA "would not force Prairie Meadows to institute a per-start fee."

However, fear of such a fee led Kelly and Anderson to be proactive and file their lawsuit after the offer was withdrawn.

"When it comes to deciding how assessments are doled out among so-called covered persons, HISA deals in secret, acting like a wheeling-and-dealing private corporation," said Koopmans in his statement. "But when HISA doesn't get its way, it makes threats with the power of the federal government. That's not how our Constitutional government is supposed to work. 'No taxation without representation' wasn't just a slogan; it was a principle this nation was built on. Joe Kelly and Doug Anderson don't get to elect the members of the HISA board, so they shouldn't be taxed by them."