Racetrack operator Churchill Downs, Inc., and thoroughbred racehorse trade association Horsemen’s Benevolent & Protective Association (“HBPA”), have filed federal lawsuits against the Horseracing Integrity & Safety Authority, Inc. (“HISA”), challenging the fees HISA has charged them pursuant to the Horseracing Integrity and Safety Act.
Congress gave HISA the power to fund its own budget by assessing fees against horseracing industry participants or, if willing, the States. Each year, HISA calculates its budget and apportions amounts owed by each State. The States may either collect the fees themselves and remit them to HISA, or they may allow HISA to collect the fees directly from the relevant entities. Either way, HISA determines who owes what by devising an applicable formula and then calculating the fees owed. HISA assessed fees against both Churchill Downs and HBPA and both entities filed federal lawsuits to challenge the formula and resulting calculations.
In both cases, the entities claim that the “assessment methodology” employed by HISA is legally unsustainable. The federal court in Louisville agreed with Churchill Downs and rejected HISA’s “purse weighted assessment methodology” as legally unsustainable on the grounds that it was “arbitrary and capricious” for the FTC to rubber stamp HISA’s claim that there was some nexus between the size of race purses and the cost of associated drug testing programs.
A week earlier and across the border in Ohio, a federal court in Ohio agreed to defer ruling on HBPA’s challenge to HISA’s fee assessment. HBPA challenged both a 2023 assessment formula and the current formula. The court decided it was appropriate to stay the challenge to the 2023 assessment formula until final disposition in another HISA case HBPA had pending in Louisiana. As to the current formula, known as “Modified Allocation,” the court rejected HBPA’s challenge and found the formula was reasonably developed and lawful.
Churchill Downs, Inc. v. Horseracing Integrity & Safety Auth., Inc., No. 3:24-cv-706-BJB, 2026 U.S. Dist. LEXIS 70341 (W.D. Ky. Apr. 1, 2026); Horsemen’s Benevolent & Protective Ass’n v. Horseracing Integrity & Safety Auth., Inc., No. 2:25-cv-98, 2026 U.S. Dist. LEXIS 60539 (S.D. Ohio Mar. 23, 2026)