Last week, a significant development took place in the world of horseracing. Churchill Downs Inc. and the New York Racing Association (NYRA) launched a lawsuit against the Horseracing Integrity and Safety Authority (HISA) in a Kentucky federal district court. Churchill Downs is renowned for conducting the Kentucky Derby and other racing events, while NYRA operates three major thoroughbred tracks in New York. This lawsuit has the potential to bring about major changes in the sport.

"The Battle for Horseracing's Future Unfolds"

Background and the HISA Act

For a long time, individual states regulated horseracing with minimal federal oversight. However, in 2020, President Donald Trump signed the HISA Act into law, bringing about a significant shift. The Act aimed to establish national and uniform standards in areas such as anti-doping, medication control, and racetrack safety. A board composed of members free from conflicts was established to promote a safer sport for horses and jockeys and safeguard the integrity of the sport.But HISA has faced criticism. Some believe that the adopted standards undermine safety and efficacy goals and take away state autonomy over a sport that states have long overseen. The Act also places the burden of funding HISA on states through annual fee assessments.

Controversies Surrounding HISA's Oversight

In the lawsuit, Churchill Downs and NYRA object to several aspects of HISA's oversight. Central to their grievance is HISA's alleged "threat" to bar them from conducting horseraces until they pay millions of dollars in illegally imposed fees. HISA strongly defends itself, stating that Churchill Downs and NYRA have refused to comply with an FTC-approved rule.The complaint drafted by Thomas H. Dupree Jr. and other attorneys from Gibson, Dunn & Crutcher highlights that HISA failed to follow the Act by assessing fees mainly on total prize money paid to race winners instead of on a state's share of racing starts. In 2022, a federal court in Louisiana found this purse-based structure to likely violate the Act.Churchill Downs and NYRA also argue that HISA is statutorily obligated to bring enforcement actions by successfully suing in federal court. Instead, they claim HISA has used its in-house enforcement process to impose millions of dollars in debts and face bans, fines, and other punishments.Furthermore, they claim that HISA has violated Article III of the Constitution by adjudicating cases involving matters of private right. They argue that since HISA is a private corporation and can prohibit them from conducting horse races, the dispute should be heard in a court.The complaint also accuses HISA of violating the private non-delegation doctrine. As Churchill Downs and NYRA see it, HISA is a private entity acting without meaningful government checks while enforcing impermissible rules.Finally, they claim that the defendants have violated the Due Process Clause of the Fifth Amendment by serving as their own judge in deciding liability for assessed fees.

Legal Battles and Potential Supreme Court Attention

HISA did not respond to a request for comment. In the coming weeks, attorneys for HISA and the other defendants will have the opportunity to rebut the plaintiffs' claims and seek dismissal. Different federal circuits have offered conflicting rulings on the HISA Act, and this case could potentially attract the attention of the U.S. Supreme Court. The Court has recently addressed similar topics in other cases, and this one could have significant implications for the future of horseracing.