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A dispute between the Horseracing Integrity and Safety Authority (HISA) and Churchill Downs Incorporated (CDI) over unpaid assessment fees is casting a shadow over this year’s Kentucky Derby, potentially limiting betting to those physically present at the track. The conflict centers around $2.4 million in fees HISA says Churchill Downs owes for 2025, representing 1/10th of 1% of the company’s total revenue and could significantly impact the reach of wagering on the iconic race.
The core of the disagreement lies in how HISA calculates its fees, a point of contention that has escalated into a formal complaint filed by the authority. HISA, established to oversee medication usage, lab accreditations, racetrack safety, and injury prevention in horse racing, alleges that Churchill Downs is attempting to avoid its financial obligations while still benefiting from HISA’s services. This dispute raises questions about the future of funding for crucial safety and integrity measures within the sport.
HISA Alleges ‘Freeloading’ by Churchill Downs
HISA’s complaint, filed on February 18, 2026, accuses Churchill Downs of “freeloading,” claiming the company declined to pay required fees despite utilizing over $1.3 million in 2025 laboratory drug testing and receiving approximately $10,000 worth of safety inspections at its four racetracks. According to HISA, Churchill Downs tracks continued to receive these services while refusing to remit payment. Lisa Lazarus, HISA’s chief executive, stated, “We are duty-bound to treat all of our constituents the same, and the 37 other racetracks operating under HISA should not be asked to subsidize Churchill Downs.” Yahoo Sports reported on the authority’s concerns.
The tracks potentially affected include Churchill Downs, Ellis Park, and Turfway Park in Kentucky, as well as Presque Isle Downs in Pennsylvania. The dispute could lead to the Federal Trade Commission (FTC) blocking simulcasting, meaning that wagering would be restricted to those physically at the track, drastically reducing the potential betting pool for the Kentucky Derby, which reached a record $349 million in 2025.
Churchill Downs Challenges Fee Calculation
Churchill Downs Incorporated has previously challenged HISA’s fee calculation methods, filing a federal lawsuit in December 2024 that remains pending. In a statement released on February 19, 2026, Churchill Downs reiterated its commitment to the safety and integrity of Thoroughbred racing but did not directly address the specific allegations of non-payment. The Courier-Journal reported on the company’s response.
The complaint was served to Gary Palmisano Jr., Churchill’s executive director of racing, via email. HISA is seeking the full $2.4 million plus interest. The authority argues that Churchill Downs’ actions undermine the broader industry and place an unfair burden on other racetracks that are complying with HISA regulations.
Potential Impact on the Run for the Roses
With just under 75 days remaining until the Kentucky Derby, the outcome of this dispute remains uncertain. If HISA is successful in restricting simulcasting, it would significantly limit the accessibility of betting on the race, potentially impacting revenue and the overall excitement surrounding the event. The situation highlights the ongoing tension between HISA, the industry regulator, and major players like Churchill Downs, as they navigate the implementation of new safety and integrity standards in horse racing.
The dispute also raises broader questions about the financial sustainability of HISA and its ability to effectively regulate the industry. The authority relies on assessment fees from racetracks to fund its operations, including safety inspections, drug testing, and other crucial programs. If major companies like Churchill Downs continue to resist paying these fees, it could jeopardize HISA’s long-term viability.
What comes next will depend on whether Churchill Downs and HISA can reach a negotiated settlement or if the matter proceeds to a legal resolution. The FTC could also turn into involved, potentially issuing an order blocking simulcasting if the two sides fail to reach an agreement. The resolution of this dispute will have significant implications for the future of horse racing and the integrity of the Kentucky Derby.
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