Making Claims: Rescinded Stud Book Cap Leaves The Question Of Who’s In Charge

In “Making Claims,” Paulick Report bloodstock editor Joe Nevills shares his opinions on the Thoroughbred industry from the breeding and sales arenas to the racing world and beyond.

In studying the history of any prolonged conflict, there are often flashpoints that change or define the struggle once we have the benefit of hindsight.

The conflicts within the horse racing industry seem to come at an engulfing pace, but many of them are satellite battles in a greater war: the three-way struggle over who is “in charge” of horse racing in North America, between national industry authorities, state governments, and individual interests.

We saw the latest flashpoint in that three-way tug-of-war on Thursday, when The Jockey Club rescinded its 140-mare stud book cap, just two days after legislation was introduced in the Kentucky House of Representatives to override the cap. An alliance between the state government and individuals needed just 48 hours in Frankfort, Ky., to accomplish what three individual farms couldn’t do on their own in court for over a year, and beat back a national-level mandate.

If you can’t beat ’em, legislate ’em.

Honestly, I’m surprised it took the opponents of the stud book cap this long to come up with the idea of trying to defeat it in state congress. It was a brilliantly drawn-up play.

The bill gained immediate credence being co-sponsored by Rep. Matthew Koch, the co-owner of Paris, Ky., farm Shawhan Place. Both chambers of the state legislature are heavily Republican, and a bill aiming to lift a perceived artificial trade restriction to one of the state’s signature industries would likely breeze through the Capitol. From there, Gov. Andy Beshear would have risked losing serious political capital if he vetoed a bill that – on the surface – would only be beneficial to Kentucky’s Thoroughbred industry. The Jockey Club’s goose was cooked as soon as the ink hit the bill’s paper.

For now, everyone is back to their neutral corners. The first foals that would have been affected by the cap just turned two this year, so the rule will have lived and died without applying to a single active stallion. From a practical standpoint, it never existed.

If this is indeed the end of it, the cap’s long-term legacy will be who won and who lost, and how this clash is applied to future battles.

If you believe in an individual or company’s right to dictate an unencumbered marketplace, potential long-term consequences be damned, or in the power of a state government over a national private governing body, today was a winning day. Congratulations.

Where things will get interesting is how this case might be utilized by the opponents of the Horseracing Integrity and Safety Authority – arguably the biggest standoff between all three of the major controlling interests: national regulators, state governments, and individual authority to govern oneself.

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I’m of the mindset that the stud book cap would have eventually prevailed if the playing field was restricted just to the courtroom. With HISA having a much closer tie to the government than The Jockey Club alone, I’d imagine the individuals, horsemen’s groups, and state governments that are challenging it legally will have a hard time coming out on top.

However, the stud book cap’s outcome does present a concerning scenario. Will its authority hold up against the wind if state governments assert autonomy from it? Could individuals (including groups of individuals like horsemen’s organizations) convince lawmakers that HISA is an infringement of states’ rights, and they could wrestle back control through legislation? If so, will the courts agree?

Unlike the racing side, the breeding corner of the Thoroughbred industry is not regulated by the state – or anyone, for that matter. The Jockey Club is as close as it gets, and it just backed off its biggest assertion of authority in recent memory – one supported by some alarming figures on the declining population and diversity of the North American gene pool – by a single bill in a state legislature.

The lawsuit filed against The Jockey Club last year included language that would have potentially left the door open for matings outside of the standard live cover, which has been the foundation of Thoroughbred breeding for as long as there has been Thoroughbred breeding. If that case would have concluded in favor of the plaintiffs, it’s possible it could have allowed for breeding methods including artificial insemination and embryo transfer. One only needs to look at the homogeny of the racing Quarter Horse breed to see that the fears we have now about biodiversity would only be magnified.

If the individuals want to expand beyond live cover (or pick apart any other aspect of the rules they don’t like), I fear they’ve just found the roadmap to do it: convince a sympathetic state government that it infringes on free trade, threaten to replace The Jockey Club as the state’s recognized breed registry, and see who blinks first. It might not be as convincing as a court ruling, but it’s precedent all the same.

The prevailing word that has run through the statements from both the winning and losing parties in the cap decision has been “unity,” when the proceedings over the past two years couldn’t be further from the truth. Unity suggests meeting in the middle. There was none of that here.

Where we are united is in the status quo; a status quo that has taken the foal crop to historic lows and given a handful of stallions and bloodlines historic highs in mares bred. If this is the path the industry has willingly chosen, it must be prepared to be united in whatever direction it takes us, even if it’s obscurity.

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