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HorseRacing

HISA Reports 2022 Costs & Salaries, Erasing $1.3M Red Ink

2024-12-11

In 2022, during its first year of operation, the Horseracing Integrity and Safety Authority (HISA) reported a significant deficit of nearly $3.3 million. However, last year, they managed to make up $1.3 million of that shortfall, as revealed by the tax documents posted on their website this week. On their form 990 submitted to the Internal Revenue Service, it was stated that HISA brought in $43,675,102 in revenue while having $39,060,160 in expenses. Medication enforcement alone cost $21,565,198, with $12,922,183 going to Drug Free Sport, the Kansas City-based company that runs the Horseracing Integrity & Welfare Unit. A substantial portion of HISA's income, around $40,285,399, came from the fees it charges to state authorities and racetracks. The determination of these fees became the core issue in a federal lawsuit filed last week by Churchill Downs Inc. and the New York Racing Association. They claim that the big race purses were wrongly included in the fee formula instead of relying solely on the number of starts per year.The regulator also collected $619,906 in fines and recouped $204,950 from lab tests by passing on the charges. Legal costs amounted to $3,781,875. The salaries and other compensation for eight key individuals at HISA exceeded $2.3 million. Lisa Lazarus, in her first full year as CEO, received a base wage of $586,547 along with an additional $13,200 in added value, representing a 17% raise from the pro-rated $500,000 she earned in the 10 1/2 months after taking the job in 2022. Other base salaries included Chief Financial Officer Jim Gates getting $344,340, an increase from $190,185 in 2022; former interim CEO turned consultant Hank Zeitlin with $305,683 (a decrease from $314,827); equine safety and welfare director Jennifer Durenberger at $262,488; racetrack safety director Ann McGovern with $224,113 (an increase from $164,477); director of stewarding and state racing Mark Guilfoil at $190,160; communications director Mandy Minger Thomas at $151,673; and assistant general counsel Sam Reinhardt at $110,132. The salaries of HIWU officers like CEO Ben Mosier and its employees were not shown as they technically work for Drug Free Sport. The form 990 is an annual requirement for organizations like HISA that are exempt from paying federal income tax.>

Key Financial Highlights

The financial performance of HISA in 2022 and 2023 showcases both challenges and achievements. The initial deficit of nearly $3.3 million was a cause for concern, but the subsequent recovery of $1.3 million demonstrates the authority's efforts in managing finances. The revenue and expense figures provide a clear picture of the operational costs and income sources. Medication enforcement expenses stand out as a significant portion of the budget, highlighting the importance placed on ensuring drug-free sports in horseracing. The fees charged to state authorities and racetracks contribute significantly to the overall income, yet the lawsuit over the fee formula raises questions about the fairness and transparency of these charges.The collection of fines and the recovery from lab tests also add to the financial picture. These additional sources of income help offset some of the expenses and contribute to the overall financial stability of the authority. The salaries of the key personnel give an insight into the compensation structure and the importance placed on different roles within the organization. The raises and changes in salaries for various positions reflect the evolving nature of the authority and the value placed on individual contributions.Overall, the form 990 provides a comprehensive overview of the financial aspects of HISA, highlighting both the challenges and opportunities in the horseracing industry.

Medication Enforcement and Its Costs

Medication enforcement is a crucial aspect of HISA's operations, as it ensures the integrity and safety of horseracing. The significant cost of $21,565,198 dedicated to this area shows the authority's commitment to preventing doping and maintaining a level playing field. The allocation of funds to Drug Free Sport, the company responsible for running the Horseracing Integrity & Welfare Unit, emphasizes the collaborative effort between HISA and external entities in achieving these goals. This investment in medication enforcement not only protects the well-being of the horses but also enhances the reputation of the horseracing industry. It sets a standard for other racing organizations to follow and ensures that fair play is maintained at all times.

Revenue Sources and the Fee Formula Controversy

The various revenue sources of HISA play a vital role in sustaining its operations. The $40,285,399 generated from fees charged to state authorities and racetracks is a substantial portion of the income. However, the lawsuit filed by Churchill Downs Inc. and the New York Racing Association over the fee formula has brought attention to a potential issue. The inclusion of big race purses in the fee formula instead of relying solely on starts per year has raised concerns about fairness and transparency. This controversy highlights the need for a clear and objective method of determining fees that takes into account all relevant factors. It also raises questions about the role of HISA in regulating these fees and ensuring that they are in the best interest of the industry. The outcome of this lawsuit could have a significant impact on the financial future of HISA and the horseracing industry as a whole.

Salaries and Compensation of Key Personnel

The salaries and other compensation of the eight key personnel at HISA provide valuable insights into the organization's internal structure and priorities. Lisa Lazarus's salary increase from $500,000 to $586,547 reflects her leadership and the value she brings to the organization. The salaries of other key positions such as Chief Financial Officer Jim Gates, former interim CEO Hank Zeitlin, and various directors also show the importance placed on different roles within HISA. The compensation packages take into account factors such as experience, expertise, and the responsibilities associated with each position. However, it is also important to consider the overall financial health of the organization and ensure that salaries are in line with the available resources. The transparency in reporting these salaries helps build trust with stakeholders and provides a clear understanding of how the organization allocates its resources.