Horsemen and women around the U.S. await clarity under the Horseracing Integrity and Safety Act (“Act”). Passed in December 2020, the act was the most extensive regulatory overhaul of the horse-racing industry since 1978.
Under the act, the Federal Trade Commission (FTC) created HISA Authority Inc., a private, nonprofit corporation (HISA). FTC delegated its power to create and enforce rules and policies to HISA and its subsidiary entities, including the Horseracing Integrity and Welfare Unit (HIWU).
There has been disagreement among the states and their respective racing commissions about the extent of HISA’s authority under the act. This disagreement has made its way through the U.S. Circuit Court of Appeals and now to the U.S. Supreme Court.
The Horseracing Integrity and Safety Act
HISA’s regulatory purview includes nine sets of regulations. The most robust is the Equine Anti-Doping and Controlled Medication Protocol. HIWU enforces and investigates alleged violations of the protocol and maintains the act’s list of prohibited or regulated medicines.
The act only applies to certain thoroughbred racetracks, horses, horse races and other licensed persons including trainers, owners, breeders, jockeys and veterinarians that operate in a state subject to the act. Only states that voluntarily register with HISA or that allow “interstate off-track wagers” are subject to the act.
There are currently four non-HISA states: Nebraska, Texas, Louisiana and West Virginia. The main impact, among other things, is that these states are unable to simulcast their live races and accept “interstate off-track wager.” Only patrons physically at the tracks in these states may place wagers on the live races. This significantly impacts these tracks’ total handle and revenue and threatens their long-term sustainability.
Circuit split
Federal courts disagree about the constitutionality of two key aspects of the act. The first is FTC’s creation of HISA and delegation of the power to create rules and regulations (“Rule-making Authority”). The second is FTC’s delegation to HISA, and by extension to HIWU, of the power to enforce the rules and regulations HISA creates (“Enforcement Authority”).
While several U.S. Circuit Courts of Appeals have addressed issues under the act, the U.S. Courts of Appeals for the 5th, 6th and 8th Circuits have pointedly addressed the act’s constitutionality. The courts all upheld HISA’s delegation of Rule-making Authority. But the 5th Circuit found unconstitutional the FTC’s delegation of Enforcement Authority to HISA and HISA’s delegation of the same to HIWU.
1. FTC’s delegation of rule-making authority declared constitutional
In Black I, the 5th Circuit held the FTC’s delegating Rule-making Authority violated the non‑delegation doctrine. Under the non-delegation doctrine, “federal power can be wielded only by the federal government [and] [p]rivate entities may only do so if they are subordinate to any agency.” “[P]rivate entities [may] ‘operate as an aid’ but [must be] ‘subject to [the agency’s] pervasive surveillance and authority.’”
In 2022, the court found HISA was not subordinate because FTC did not have sufficient oversight and control over HISA’s Rule-making Authority. The court distinguished FTC’s authority to that of the Securities and Exchange Commission (SEC) over the Financial Industry Regulatory Authority (FINRA). Both models involve a private entity proposing and creating rules. But SEC may “abrogate, add to and delete” the provisions FINRA drafts. In contrast, FTC may only recommend modifications to HISA’s rules. FTC’s lack of meaningful review authority renders HISA’s authority unconstitutional.
Congress responded by passing 15 U.S.C. § 3053(e). It affords FTC the same review authority over HISA as SEC has over FINRA. FTC now has the “power to revoke [HISA]’s decision or place procedural and substantive conditions on any such decision.” The 5th, 6th and 8th Circuits found FTC’s delegation of Rule-making Authority, as amended, was constitutional.
2. FTC’s delegation of enforcement authority leads to circuit split
The 5th and 8th Circuits now disagree whether HISA’s Enforcement Authority is constitutional. Under the act, Enforcement Authority includes the power to (1) investigate potential violations, (2) issue subpoenas, (3) levy fines and sanctions and (4) sue for injunctive relief. HISA delegated this authority to HIWU. The act only allows FTC to review HIWU’s decisions and methods of enforcement after the fact.
In Black II, the 5th Circuit determined HIWU is still not truly subordinate to FTC. The Black II court held the act allows HIWU to perform its enforcement functions “without the say-so of the [FTC]” and thus “does not operate under [FTC]’s ‘authority and surveillance.’”
The Walmsey court disagreed. It reasoned that the act allows the FTC to modify or add to the act’s provisions, which is a more pervasive oversight authority than the Black II court found. This issue is now before the U.S. Supreme Court.
Outlook for the horse-racing industry
Because these court decisions have divided the country, the horse-racing industry continues to await clarity. Until recently, several appeals involving the act were before the U.S. Supreme Court.
But the court recently remanded all pending cases with direction to reconsider their respective rulings in light of FCC v. Consumers’ Research et al. That opinion applied the non-delegation doctrine to a Federal Commissions Commission fund to which all communications companies must contribute for use in subsidized communication developments. It remains unclear how courts will apply that decision to the act.
There has also been legislative movement. On May 14, 2025, Rep. Higgins (R-Louisiana) and Sen. Cotton (R-Arkansas) introduced the “Racehorse Health and Safety Act of 2025.” If passed, this would repeal the act and replace HISA with two committees. One is the board of directors comprised of nine appointees. Five states with the most racing days in the prior three years would each appoint one member, and the remaining member states would appoint the remaining four.
Second is a racetrack safety committee comprised of seven members: Three shall be members of the equine industry, one appointed by the U.S. Trotting Association, one by the American Quarter Horse Association, one from the National Horsemen’s Benevolent and Protective Association, and one by the Association of Racing Commissioners International. These committees would combine efforts to effectuate all of the same purposes as HISA.
Without further clarity, the U.S. horse-racing industry remains divided between states under the act and states exempt from it.
This article provides only a general overview of the act and is not a substitute for legal advice. Always involve experienced counsel.
