CDI, HISA Attorneys Square Off in Court

Attorneys for Churchill Downs Inc. and the Horseracing Integrity and Safety Authority debated the legality of HISA's assessment methodology during a nearly two-hour hearing March 19 in United States District Court in Louisville, Ky. The proceeding before Judge Benjamin Beaton largely repeated arguments previously outlined in briefs and filings tied to the ongoing lawsuit. Beaton did not immediately issue a ruling—not uncommon in complex civil matters—but his questioning suggested legal concerns regarding HISA's pre-2026 funding model, which calculated assessments based on a combination of racing starts and purse levels. HISA, a quasi-government entity established by Congress in 2020 to create, implement, and enforce uniform national safety and anti-doping rules for Thoroughbred racing, funds its operations through assessments. CDI has argued that this earlier assessment methodology exceeded statutory authority. The track operator believes assessments should be based solely on racing starts, a position it has used in prior years to partially pay its HISA assessments. The track operator, however, did not pay even those fees in 2025, leading a three-person HISA panel to issue a March 16 order, requiring the company to pay approximately $5.27 million within 10 days or face the suspension of racing at Churchill Downs, Turfway Park, Ellis Park, and Presque Isle Downs. That $5.27 million order, plus interest, is based only on a starts-only methodology. HISA counsel Pratik Shah told Beaton that CDI is the only Thoroughbred track or track operator "that paid zero in 2025." Attorneys for both sides sparred over the role of racing starts in the broader funding structure during the hearing, recognizing its importance to the court's evaluation of the methodology's legality. CDI has requested a stay of that HISA payment order, and that request will soon go before the HISA board for consideration. CDI attorney Thomas H. Dupree Jr. therefore chose to hold off on a request for a temporary restraining order, which would pause enforcement of the payment demand, but indicated that such relief could be pursued if a stay is denied. To obtain a TRO, CDI would need to demonstrate that it faces immediate and irreparable harm. "Keep in touch," Beaton said, expressing optimism to both sides that "cooler heads will prevail." Earlier, Beaton appeared to question whether HISA's purses-included formula could withstand scrutiny under an "arbitrary and capricious" standard—a key principle in administrative law that requires agency actions to be based on reasoned decision-making, supported by evidence, and not irrational or inconsistent. Shah defended the original approach, explaining that purse levels were initially used in assessments based on the view that higher-level races—such as the $5 million Kentucky Derby (G1) at Churchill Downs—could require more extensive testing and incur greater legal costs, particularly in the event of a contested disqualification. After several years of evaluation, the evidence did not support a purse-based funding mechanism, he acknowledged. Beginning this year, HISA shifted to a starts-only methodology, a move that saves Kentucky tracks, which have historical horse racing gaming to bolster their purses, millions of dollars. CDI owns three Thoroughbred tracks in the state: Churchill Downs, Turfway Park, and Ellis Park. In post-hearing comments made between the lawyers and heard before the gallery, Shah encouraged Dupree to have CDI pay the $5.27 million the regulator says is the minimum owed HISA by CDI, with a pledge to return it if the court determines CDI doesn't owe at least that figure. CDI corporate counsel Brandon Kenney then questioned HISA's finances, drawing a rebuke from HISA general counsel John Roach, saying Kenney lacked sufficient understanding to make that claim.