Tuesday, May 30, 2017

Barr-Tonko ver. 2.0: Better, But Is It Good Enough?

Last week, Congress members Andy Barr of Kentucky and Paul Tonko of New York introduced a considerably revised version of their "Horse Racing Integrity Act." (You can read the full text of the new bill here. It has been referred to the House Energy & Commerce Committee for hearings) The first version of the bill had been introduced back in 2015, with the support of racing's aristocracy, like The Jockey Club, had aroused heated opposition from most horsemen's organizations, and had then languished in the bowels of a do-nothing Congress. I commented on some of the serious problems with that earlier bill here and here.

Since 2015, a few things have changed. First, Republicans now control both houses of Congress and the White House, and Congressman Barr is a former intern for Mitch McConnell, now the Senate majority leader. That can't help but improve the new bill's chances for passage. Second, the states are still a ways from enacting uniform rules that apply to all racing, everywhere; the supposedly ongoing movement toward uniformity was one of the strong arguments last time around for holding off on federal legislation. Third, there has been no end to publicly visible doping disasters. For example, the recent fiasco in Florida, resulting in the tossing out of more than 100 drug positives (including four for uber-trainer Todd Pletcher) suggested that at least some states can't be trusted to police doping on their own. While some of the arguments for federal regulation remain specious -- foreign buyers are still showing up in big numbers to buy US bloodstock, despite dire warnings to the contrary from US racing's grandees, for example -- there is a serious case to be made that US racing needs uniform regulation and that the states can't be trusted to get the job done.

The new version of Barr-Tonko is a considerable improvement over its predecessor. It responds to some, though not all, of the complaints addressed to the 2015 version, and it allows, although does not require, that the contentious issue of race-day Lasix be put aside, at least initially. The question for those of us in the industry is whether the changes make the bill good enough to support, or at least to live with. Industry opposition to federal legislation will just make it look like all of us want to keep on drugging our poor horses. That public perception may not be racing's most serious problem; I would argue that outrageously high takeout is much more responsible for our slow but sure decline. But it couldn't hurt if the public believed that doping was under control. So let's see if Barr-Tonko ver. 2.0 is good enough.

The new bill cures one major defect in the original by including standardbreds and quarter horses, as well as thoroughbreds. Under the old version, state racing commissions would still have been responsible for non-thoroughbred doping control, leading to different standards and duplication of effort. This is a major improvement.

Second, the new bill explicitly preserves, in its current form, the Interstate Horseracing Act of 1978, which regulates simulcasting and gives horsemen's organizations (except at NYRA tracks in New York) a veto power over signal distribution, forcing the tracks to negotiate with their horsemen. Most industry participants (except, naturally, for the corporate suits in charge of many tracks) think that the 1978 Act's system works reasonably well.

Third, the new bill adds people with actual industry experience to the Board of the new "Horseracing Anti-Doping and Medication Control Authority" that it sets up to be the federal enforcement agency. The earlier version's conflict-of-interest rules had virtually ruled out anyone who knew anything about racing. Under the new bill, the Authority would be run, and its rules approved, by a Board of 13, including the CEO of the U.S. Anti-Doping Agency (USADA), Travis Tygart, plus 6 people from the current USADA Board and six more from horse racing, including a regulator, a former racetrack executive, an owner or breeder, a trainer, a jockey and an equine vet. The Authority would still dominated by USADA folks with no particular knowledge of horses, but its management structure would be better than before.

Fourth, the new Authority would be situated within the ambit of the Federal Trade Commission, and sanctions imposed by the Authority could be appealed to an administrative law judge appointed by the FTC and ultimately to the full commission. That certainly provides a lot of due process for those accused of doping, but it might well result in a process that is no faster than the existing situation, where a trainer who lawyers up can often postpone sanctions for four years or more while appealing an already-slow racing commission determination. I would have liked to see a much quicker timetable built into the legislation.

Fifth, the new bill keeps alive the possibility of reverting to state regulation, but only if there is an interstate compact among states accounting for 90% of all starts in the US and adopting uniform rules. That's a nice feature, directly challenging the horsemen's argument that everyone should just wait while we pursue the ever-elusive uniformity. The bill also allows the Authority to delegate its enforcement functions to state regulatory agencies, if it finds them capable.

Sixth, the new bill, while still applying to all participants in the industry (except breeders and consignors -- see below), allows the proposed Authority to continue the policy of trainer responsibility for medication violations. It was unclear in the earlier version whether there would be any kind of absolute responsibility on anyone's part for a drug violation.

Finally, the new bill allows the Authority to hold off on banning race-day Lasix, at least for a while, by incorporating the existing uniform rules promulgated by the Association of Racing Commissioners (the North American regulatory group), which permits Lasix use. Still, by referring repeatedly to "international standards," the bill's bias toward outlawing race-day Lasix has not gone away. But at least that becomes a fight for another day.

So what's still wrong with the new bill? A lot less than previously.

First, the bill still does not cover breeders and sales consignors. Those of us who remember the days of the incredible shrinking two-year-old, when a horse bulked up on steroids would come home from the sale and promptly lose 100 pounds or more, might want a bit more protection against whatever it is that unsavory consignors will think of next.

Second, the bill still puts all the cost of federal regulation on horse owners, through a per-start fee. In fact, it explicitly forbids funding through a takeout increase. From the bettor's point of view, that's a good thing, but from a horse owner's, it's just one more cost in what's already a money-losing enterprise (See my analysis of the costs of thoroughbred ownership here). It's true that in many states owners already pay some or all of the cost of state regulation and drug testing, but the bill is likely to increase the total cost burden on owners nationwide.

That's it. Apart from the fear that what the legislation is really about is banning Lasix, this is a pretty good bill. For those of us in a state like New York, where corruption rules in the state capitol and getting anything done requires massive lobbying (aka contributing to politicians' campaign funds), federal regulation, even in an era of Trumpian kleptocracy, might not be any more burdensome.

Congratulations to Congressmen Barr and Tonko for listening to those of us who criticized the earlier bill and for incorporating many -- though not all -- of our suggestions. Also, they, or their drafters, have made the new version a lot clearer and easier to understand. As a former legislative drafter myself, I appreciate that effort.

Finally, some totally unsolicited and probably unwelcome advice to Eric Hamelback of the national HBPA and Rick Violette of the Thoroughbred Horsemen's Association: don't fight this one. The bill is good enough to live with, and opposing it will just reinforce the public view that we're all incorrigible drug pushers. 

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