Podcast - One Sport, One Rulebook: A Conversation with the CEO of the Horseracing Integrity and Safety Authority

Kayla Pragid: Welcome to today's episode of "The Tack Room," where we will explore the world of horse racing regulations. We are so thrilled to have with us today Louis Rouleau and a distinguished guest, Lisa Lazarus, who will help unpack the complex landscape navigated by those in the horse racing industry. 

First, I'm honored to welcome Lisa Lazarus. With extensive experience in sports law and governance, Ms. Lazarus previously held leadership positions at the International Equestrian Federation, known as FEI, and, impressively, at the National Football League. Her career has been dedicated to enhancing the regulatory frameworks in sports, focusing particularly on equine welfare, anti-doping protocols and athlete safety. Under her leadership, the Horseracing Integrity and Safety Authority, known as HISA, continues to work towards standardizing practices across all racing jurisdictions to ensure both the well-being of the athletes and to preserve the integrity of the sport.

I'm also excited that joining our conversation is Louis Rouleau, who is a very distinguished lawyer here at Holland & Knight, specializing in equine and real estate litigation. With significant experience representing clients across equine disciplines, Mr. Rouleau has established himself as a leading legal voice in matters concerning equine industry disputes. His practice focuses on helping owners, trainers and racing organizations navigate the complex legal landscape of equine sports, and his deep understanding of equine sports has made him a truly valuable advocate for clients facing legal challenges, regulatory issues and even fraud in the equine space.

Today, we delve into a conversation with Lisa Lazarus, who is the first-ever CEO of the Horseracing Integrity and Safety Authority, and the organization's groundbreaking attempts to implement uniform safety standards across U.S. thoroughbred racing. Host Louis Rouleau will guide the discussion and navigate HISA's mission of reducing equine fatalities, addressing complex constitutional issues and transforming racing into a sport where horse welfare remains paramount, all while working to ensure the long-term viability of America's oldest sporting tradition. Welcome to "The Tack Room."

Louis Rouleau: Hello, everybody. It's my pleasure to introduce Lisa Lazarus. Lisa is the first chief executive officer of the Horseracing Integrity and Safety Authority (HISA). Indeed, she was its first employee. Lisa, thank you for agreeing to talk with us today. And before we discuss the creation of the authority and some of the key legal challenges it is facing, I'd like you to tell us a little bit about your professional background, especially with respect to the equine industry, if you could do that, please.

Lisa Lazarus: Sure, I'd be more than happy to, and very happy to be on here today. So I started my career actually as a law clerk for a federal district court judge, which was a fantastic job. And I went from there to Akin Gump Strauss Hauer & Feld in Washington, D.C., for about four years. While there, I was primarily working as outside counsel for the National Football League (NFL). So when a position opened internally in their labor management council, I was a strong candidate and ultimately was hired for that job. So I worked for six years in the NFL Management Council as an attorney representing the NFL teams. And then I moved overseas with my family, and I continued to work for the NFL on international initiatives, including preseason games in Asia that had been planned, and also being part of creating the commercial program around the launch of the first NFL International Series game between the Miami Dolphins and the New York Giants in 2007 in London at Wembley Stadium. And then I was living in Geneva, Switzerland, with my family, and I was fortunate to get a call about an in-house position as general counsel of the International Equestrian Federation, the FEI, based in Lausanne, Switzerland, where basically all of the sort of Olympic federations are based, or at least the vast majority of them. And I took that position enthusiastically and was the general counsel of the FEI for six years.

The FEI covers really seven equestrian disciplines. They have the three that are in the Olympic games, which are jumping, eventing and dressage. But they also oversee driving, which is sort of horses with carriages. They oversee vaulting, which is like gymnastics on a horse. There is paradressage, which is the dressage in the Paralympics. And then there's also endurance, which is running very long distances, kind of like marathons on horses. So I was fortunate to do that for six years, loved it. From there, I actually started my own equestrian law practice. And ultimately merged it with Morgan Sports Law, which is an athlete-side sports boutique arbitration firm, primarily focusing on advocacy for athletes around anti-doping matters and other disciplinary matters. And I did that for about four years. And then I was fortunate enough to be recruited for my current job, which is the CEO of the Horseracing Integrity and Safety Authority.

Louis Rouleau: Well, that is a lot. And let me ask you this, what are some of your takeaways in representing owners, trainers and riders in terms of commonalities and differences?

Lisa Lazarus: Sure, so first of all, most people that own horses, whether it's horse racing or jumping or dressage, have a sophisticated business background. And so they come to many of these sort of complex issues with a lot of general knowledge and just general intelligence. And so, it's obviously important that you deliver top-level service beyond their game because they will definitely catch it if you're not. In terms of riders and trainers, really a lot of similarities because the riders in a sport like jumping are the ones that train the horses and care for the horses, and, ultimately, you know, sit on the horses to go through the course to compete. In horse racing, the trainer does all the same things except for he or she doesn't actually ride the horse. The jockeys ride the horses, and the jockeys are independent contractors and they're actually hired by the trainers to participate in a particular race on a particular horse for them. But really the relevant, significant period of time for the horse's performance is the time that the horse spends with the trainer or the rider getting ready like any athlete. You know, horses are equine athletes. And so that's really a very strong commonality. The fact that they don't actually ride the horses is certainly a difference, but they have more in common than they don't.

Louis Rouleau: That's perfect and very helpful and a great segue. I want to turn to the actual authority, and given its relative newness, I'd like to briefly discuss the Horseracing Integrity and Safety Act. Congress passed the act in 2020, creating the authority. Why in your estimation, or if you could summarize for the audience, why was the authority created? What was the raison d'etre?

Lisa Lazarus: Sure, so I would say that the bill had been percolating in Congress probably about 10 years. There'd been a number of horse racing industry groups who had been asking for national regulation for a long time. Horse racing was really the only sport that was operating on a state-by-state basis. So the rules were different in New York, in Maryland, in California. So for example, if you're competing in the Triple Crown and you started in Kentucky at the Derby, then you went to Maryland for the Preakness, you would have different rules. And if you went to New York for the Belmont, you again would have difference rules. And you can imagine how that was a challenge for trainers and jockeys who move from jurisdiction to jurisdiction and also created a real barrier and obstacle to building horse racing as one unified sport with core principles and core values. And right before the bill got passed, there were a series of equine fatalities at Santa Anita in California. And that was really perceived as a big crisis in the industry. There had also been a number of arrests in New York in March of 2020 for significant doping violations. And there was a sense that for horse racing to survive, to grow, to be a sport that was viable for the future, that some serious reforms had to take place.

And those reforms are really embodied in the Horseracing Integrity and Safety Act. And its mission is to essentially protect the safety and integrity of the horses and the riders and the sport. And it really sets forth two programs that have to be created to make sure that happens. And one is the Racetrack Safety Program, and the other is the Anti-Doping Medication Control Program. And so our mission, sort of to put it simply, is to make sure that horses are at the center of everything we do and all decisions we make, that horse welfare is always paramount. And also make sure that we're taking good care of our jockeys who are riding horses at a very fast pace in a way that can sometimes create serious risks. And we want to make sure that those risks are minimized as much as possible. And we've had a lot of success in reducing equine fatalities. In the short period of time that we've been in effect, we've managed to reduce them by about 30 percent, which is exciting. And we still think there's a lot more that we can do to move that number even further down.

Louis Rouleau: In connection with that mission that you just explained, what is the Horseracing Integrity and Welfare Unit (HIWU)?

Lisa Lazarus: The legislation is quite interesting in that it creates a structure that is not really similar in nature to any other sporting organizations or governing bodies that I'm aware of. It requires that the anti-doping program be managed day-to-day by an independent agency. So the day-to-day decisions around what violations should actually be prosecuted, how they're prosecuted, how they're defended, settled, etc., that falls within the authority of the Horseracing Integrity and Welfare Unit. We created the Horseracing Integrity and Welfare Unit, but they are independently owned and operated. They're owned by Drug Free Sport International, which actually does all of the human drug testing for NFL, NBA, Major League Baseball. They're really the leader in the space in sports. And we've managed to form a fantastic partnership with them where they've created a standalone agency that takes care of everything from the testing plan for horses through to overseeing all of the testing, overseeing the lab relationships, making sure that the follow-up happens, prosecutions, you name it. They really do the anti-doping piece from soup to nuts. HISA still makes the rules when it comes to anti-doping, but we passed them over to HIWU to implement them.

Louis Rouleau: So is it fair to say that the welfare unit is like the enforcement arm?

Lisa Lazarus: The enforcement arm on the anti-doping side. We maintain the enforcement arm on the racetrack safety side.

Louis Rouleau: Thank you for that clarification. Now, I want to sort of turn to the actual meat of this conversation. I want to turn to what has garnered a fair amount of attention in the racing world, constitutional challenges to the authority itself. As we sit here today, I understand that there's one constitutional challenge that stands out above several others. And I'd like to sort of discuss that and as I understand it, it's the private non-delegation doctrine. Is that correct?

Lisa Lazarus: That is correct.

Louis Rouleau: I know that you're a very accomplished attorney, but for our audience, and some of whom may not be attorneys, can you sort of explain what that doctrine is and what the issue is?

Lisa Lazarus: Sure. So there's a principle in the Constitution essentially that says that you cannot delegate to a private entity the powers of the federal government. So the argument from our detractors is that HISA operates essentially with federal powers unrestricted. Our position is that it's not true because we report to the Federal Trade Commission and we can't pass any rules or do anything significant without the approval of the Federal Trade Commission. So all of our rule changes, enforcement, things like that, they all go through the authority of the Federal Trade Commission.

Louis Rouleau: And as I understand it, that doctrine has resulted in several splits among several circuit courts of the United States Court of Appeals, including the Fifth, Sixth and Eighth circuits. Is that correct?

Lisa Lazarus: That's correct. And actually there hasn't been a new decision on the private non-delegation doctrine in a really long time. Recently, the Supreme Court ruled on the public non-delegation doctrine in a case involving the Federal Communications Commission (FCC). And because of that, they sent our three circuit court cases back to the circuit courts for re-examination in light of that decision. A little perplexing to us because the private non-delegation doctrine and the public are different. That being said, we think that potentially the court was sending the signal that they want the status quo maintained and that they are not either ready, willing, interested in changing the rules around the non-delegation doctrine. And if that were in fact the case, then we would prevail because we're asking for the status quo. One of the things that's probably helpful for your listeners to know is that HISA was modeled after FINRA, the Financial Reporting Agency. And essentially, FINRA is to the Securities and Exchange Commission, what we are to the Federal Trade Commission. And that's like 80 years of banking regulation. So basically, if we go down, FINRA goes down, and we think it is unlikely that the Supreme Court is going to want to take down 80 years of banking regulation. But the court can do what the court wants. So we are gearing up for arguments potentially once the circuit court review is complete.

Louis Rouleau: So as we sit here today, now that the case went back from the Supreme Court to the circuit court, none of those circuit courts have ruled on that issue yet?

Lisa Lazarus: No, not yet.

Louis Rouleau: But are you optimistic that they'll rule in favor of the authority?

Lisa Lazarus: You know, our expectation is that they'll all rule the same as they did last time, that there's really nothing in the Federal Communications Commission decision that's going to change the perspective. If you think of it, that in each circuit court, there were two elements of HISA that were challenged. One was our rulemaking authority. The other was our enforcement authority. To think of that as like kind of six battles, we won five out of six because even the Fifth Circuit ruled in favor of us on our rulemaking authority. They only ruled against us on our enforcement authority. So the Fifth Circuit is by far the most heavily reversed circuit in the country when it comes to Supreme Court review. I think there's something like 85 percent in terms of being overturned. So we don't necessarily think that this sending of the FCC decision on the public non-delegation doctrine, the Fifth Circuit is going to change their opinion.

Louis Rouleau: As a litigator myself, that's a very good legal scorecard to have. Other than the legal challenges, what other immediate challenges is the authority facing?

Lisa Lazarus: So the legal challenge, while I feel pretty confident in the likely outcome, it does create somewhat of a barrier to truly moving forward with our operations in a way that brings everyone on board. We have our die-hard supporters, we have our die-hard detractors, and we have a whole lot of people in the middle. And the people in middle are people that I am trying to bring along. And I am trying to incentivize to really buy in because I'm incredibly confident that the more we can grow HISA together as an industry, the stronger the industry will be. Because the industry needs to have strong regulation to essentially ensure that the public has trust in the product. We depend heavily on wagering, on gambling. And so for gambling and wagering, trust is incredibly important, obviously. So we need to make sure that there is real comfort that the competitions are taking place fairly without any advantages, doping or otherwise. And so obviously that's really key for us.

And the second thing is the public won't tolerate sport where animals are hurt — and they shouldn't, they absolutely shouldn't. You know, if we can't run a sport with the horse's welfare at the center of all of our decisions, we shouldn't have the privilege of running the sport. And I don't know a single person in horse racing that doesn't absolutely love their horses and wouldn't absolutely do anything for their horses. And so the issue is just... getting to a place where the vast majority of stakeholders trust that we're on the same page as them and that we can work together to really make sure that horses are safe and, thereby, the industry itself is safe, because we'll continue to basically face existential threats if we can't convince the public that we prioritize the horse's welfare, the horse condition and every decision that we make is made with the horse in mind.

Louis Rouleau: That's actually very, very inspiring. Well, that's all the time we have for today. So I want to thank you for taking the time out of your incredibly busy schedule to share your thoughts about the authority and some of its challenges, including its legal challenges. But I want to give you the last word. Is there a last thought that you want to share with the audience?

Lisa Lazarus: You know, what I want to share with the audience is horse racing is an incredibly beautiful sport. I mean, the synergy between the rider and the horse is really special. And we're doing a whole lot of things to ensure that all the negatives are sort of eradicated from the sport. But there's a reason why it's the oldest sport in America  — People call it the sport of kings — and why it's still very much financially viable. And so I really hope that we can be able to continue the sport and deliver a sport that's even stronger and more prosperous to our children and grandchildren and that in five or 10 years from now, nobody's actually talking about welfare or safety or competitive parity because they just assume it's there. Like, they're not worried about it. And they're just talking about the horses and the riders and the sport and how incredible it is.

Louis Rouleau: And there we have it.