Judge rules HISA’s purse-weighted fee methodology for racetracks was unlawful
The United States District Court for the Western District of Kentucky has ruled in favour of Churchill Downs, saying that the Horseracing Integrity and Safety Authority’s (HISA) method of calculating fees was unlawful.
Churchill Downs had initiated five claims against HISA in its lawsuit, three of which were dismissed by the judge. He did rule, however, that the Authority acted in an ‘arbitrary and capricious manner,’ and therefore its purse-weighted fee methodology and associated efforts to collect fees under this basis are unlawful.
He said: “This case poses a time-limited question that is – at least on the surface – merely financial. Churchill Downs challenges not whether the Authority can lawfully regulate, but instead how it may procure funding for those regulatory activities.”
Judge Beaton ruled that the formula should determine, according to the original Horseracing Integrity and Safety Act, the ‘state’s proportionate share of the horseracing anti-doping and medication control program and the racetrack safety program for the next calendar year.’
Judge Beaton said: “Surely all would agree that the mere mention of ‘starts’ wouldn’t automatically ensure the permissibility of a purse-dominated formula. But then again, what linguistic principle would rule out consideration of other atextual factors — television ratings, betting handle, racetrack attendance, and the like? What about other factors even more attenuated from the statutory text? Is this any way to balance the scales with permissible and impermissible statutory criteria? Or is ‘the scale analogy’ even ‘appropriate, since the interests on both sides are incommensurate. It is more like judging whether a particular line is longer than a particular rock is heavy.’
He added: “As a textual matter, purses could conceivably help the Authority predict a ‘state’s proportionate share’ in the costs of HISA’s testing and safety programs,” Judge Beaton wrote. “But as a matter of predictive judgment, HISA rested its purse-proxy theory on nothing but unsupported, unexplained ‘anticipation.’ For that reason, it is arbitrary and capricious.”
“We are pleased with the Court’s decision in our favour,” said Bill Carstanjen, CEO of CDI. “It’s unfortunate that HISA wasted so much time and resources, forcing us to go to such lengths to prove a very clear point. This is indicative of HISA’s ongoing fiscal mismanagement, which is a distraction from our joint mission of equine health and safety. By finding that HISA continuously exceeded its authority, the Court reiterated why it was necessary to bring this legal action.”
A HISA spokesperson commented: “Today’s district court decision is narrow: It rejects a prohibition on using factors beyond racing starts in fee assessments, rejects Churchill’s equitable and contract-based theories, and declines to vacate the prior purse-weighted assessment rule. Instead, it orders limited declaratory relief to Churchill, for past years only, based on the FTC’s failure to adequately explain its approval. As the industry moves forward under the racing-starts-only rule that went into effect in 2026, HISA remains focused on advancing its safety and integrity mission.”
The post Churchill Downs ruled exempt from purse-based fees for 2022 to 2024, but must pay per-start fees going forward appeared first on G3 Newswire.
Judge rules HISA’s purse-weighted fee methodology for racetracks was unlawful The United States District Court for the Western District of Kentucky has ruled in favour of Churchill Downs, saying that the Horseracing Integrity and Safety Authority’s (HISA) method of calculating fees was unlawful. Churchill Downs had initiated five claims against HISA in its lawsuit, three…
The post Churchill Downs ruled exempt from purse-based fees for 2022 to 2024, but must pay per-start fees going forward appeared first on G3 Newswire.