Churchill Downs and NYRA File Lawsuit Against HISA Over Fee Dispute

The dispute centers on millions of dollars in fees that HISA claims CDI and NYRA owe, which the plaintiffs argue were improperly calculatedImage Source: Shutterstock.com

Churchill Downs Inc. (CDI), which owns the Kentucky Derby, and the New York Racing Association (NYRA), which runs major New York tracks like Belmont Parkand Saratoga Race Course, have started a legal battleagainst the Horseracing Integrity and Safety Authority (HISA). They filed the lawsuit on December 4 in a Kentucky federal court. CDI and NYRA claim HISA has unconstitutional practices and mismanages fees as the national horseracing regulator.

Legal Battle Over Millions in Fees Puts Iconic Horse Racing Tracks at Risk

The fight is about millions of dollars in fees that HISAsays CDIand NYRAowe. The plaintiffs claim these fees were worked out using the wrong method mixing the number of race starts with prize money (“purses”). They say this way of doing the calculations goes against the Horseracing Integrity and Safety Act, which states that fees should be based on race starts.

HISAset up in 2020as part of government efforts to enforce consistent safety and anti-doping rules in horseracing, has defended its actions. The organization says its fee assessment system, which the Federal Trade Commission (FTC)approved makes sure funding is fair to keep its programs running. HISA CEO Lisa Lazarusstressed that they made the rules after getting lots of input from sngakeholders and that these rules are essential to keep the sport fair and honest.

There is a lot on the line. If the plaintiffs do not pay, HISAhas said it might stop racing at their tracks, which could mess up the 2025 seasonat places like Churchill Downs and Belmont Park.

Horse Racing Regulation in Question as Lawsuit Alleges HISA Overreach

CDI and NYRAallegethat HISAis going beyond its legal powersby using its own internal processes to enforce penalties, not federal courts. They argue this steps on Article III of the US Constitution, which says the judiciary can settle private disputes. The lawsuit also claims HISA’s actions break due process rights and the Administrative Procedure Act. It says HISA works with little government oversight but has a lot of power.

This court fight brings up bigger discussionsabout HISA‘s job again. Some say its rules across the country have ngaken away states’ usual power to make rules and cost the industry a lot without help from the federal government. However, those who back it, like NYRA, agree that HISAhas an important job to make horses saferand raise standards in the industry.

As the case goes on, both sides have until early 2025to get their arguments ready. Other courts have already said different things about whether HISA follows the Constitution. How this case turns out could change a lot about how horse racing is controlled in the United States in the future.