New fed HISA proposal could cost states 10% of purse value

After months of murkiness over how it would be financed, the Horseracing Integrity and Safety Authority's latest proposed regulations included rules for determining how much each racing state will have to pay the authority every year. The proposal could end up costing commissions the equivalent of up to 10 percent of their state's purse values.

According to the proposed regulation, each state commission’s contribution will be determined by adding up the state’s annual covered racing starts, a number which would be calculated by adding 50 percent of the state’s projected starts plus 50 percent of its projected purse starts. A state’s maximum allocation would be 10 percent of its total purses for covered races.

"The Authority shall allocate the calculation due from each State... proportionally by each State's respective percentage of the Annual Covered Racing Starts," the proposed regulations said.

If a state were calculated to owe more than the proposed 10 percent of purses, the extra money owed would be added on to the allocation from other states that did not go over the maximum.

A representative for the HISA authority did not respond to an inquiry as to whether the money is supposed to come out of purses or if state racing authorities need to find the funds in other ways. They also did not answer if the authority has any guess as to what its total budget could be.

The proposal, which was not among the rules that have already been sent to the Federal Trade Commission for review, said the authority will calculate its budget and give states an estimate for their required contribution

The proposed rule allows states to opt in to proactively calculate how much they owe the authority every year. If they choose not to do so, the authority would do it for them on a monthly basis.

The proposal is not final and is still subject to changes and public comment.

According to The Jockey Club,  Kentucky had $122,655,688 in gross purse money in 2020. The proposed maximum of 10 percent of the purses could lead to the state owing more than $12 million to HISA.

New York could owe a maximum of more than $11 million at 10 percent of its 2020 purses, which totaled $110,650,829. California had $104,096,053 in 2020 gross purses, which could lead to the state owing a maximum of over 10.4 million to the authority.

As far as starts go in those states, Kentucky had 13,872 starts in 1,570 races in 2020. New York had 14,963 starts in 1,884 races while California had 19,920 starts in 2,784 races.

From the 2020 total of 237,189 starts through 27,700 races in the U.S. according to The Jockey Club, Florida had 11.8 percent of them with 28,071 starts. California had 8.4 percent of the total with New York and Kentucky contributing 6.3 and 5.9 percent, respectively.

Statistics for 2020 were often skewed due to the impact of the COVID pandemic.

HISA recently announced it failed to come to a deal with the U.S. Anti-Doping Agency, which it had previously planned to have run its drug enforcement.

The HISA authority recently began to archive previous draft versions of its regulations after initially making changes without saving the old versions in a published form. A side-by-side comparison of the rules from Monday and Dec. 20 can be seen here.

The full HISA proposed rules can be viewed below.