Texas Racing Commission to Cease Exporting and Importing Pari-Mutuel Simulcast Signals of “Covered Horseraces” Under the Horseracing Integrity and Safety Act as of July 1, 2022 | Snell & Wilmer

The Executive Director of the Texas Racing Commission has issued a policy statement requiring all occupational and business licenses to obtain approval for the import and export of pari-mutuel simulcast signals. The statement warns that any races that could otherwise fall under the definition of a “covered horserace” under the Horseracing Integrity and Safety Act (“HISA”) would not be approved to conduct on-site pari-mutuel wagering or provide a simulcast export signal.

The Commission implemented the policy in order to determine whether licenses importing or exporting signal would invoke the jurisdiction of HISA, which was enacted on December 27, 2020 at 15 USC § 3051, et seq., and takes effect on July 1, 2022. HISA establishes the Horseracing Integrity and Safety Authority as a “private, independent, self-regulatory, nonprofit corporation” to develop and implement a horseracing program for medication control and safety for covered horses, persons , and horseraces. 15 USC § 3052; see also 15 USC § 3053. (See prior legal alert regarding HISA.)

The Texas Racing Commission’s issued policy states that the Commission “regulates all aspects of Texas horse racing,” which includes, “in particular, pari-mutuel and simulcast wagering in Texas.” As such, the Commission concludes that application of HISA over any Texas horseraces would “necessarily preclude” the Commission “from full compliance with the Texas Racing Act.” To remain outside of HISA’s jurisdiction—and therefore to allow the Commission to comply with the Texas Racing Act set forth in its policy statement the Commission will prohibit any “covered horserace” from fully-covered horserace on-site pari-mutuel wagering or providing simulcast export signal.

A “covered horserace” under HISA is a race that “has a substantial relation to interstate commerce, including any Thoroughbred horserace that is the subject of interstate off-track or advance deposit wagers.” 15 USC § 3051(5); see also 15 USC § 3051(4) (defining “covered horse” as “any Thoroughbred horse” or other eligible horses during specified timeframe). Therefore, all races offered in Texas will not fall under this definition.

However, eliminating in-state wagering on imported signals and out-of-state wagering on Texas racetracks is likely to have a noticeable economic effect, particularly as advance deposit wagering is illegal in Texas, requiring that all bets must be made at an in- state racetrack. See, eg., Tex. Occ. Code Ann. § 2027.002.

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