FTC: Transparency is questioned in federal racing regulations

In its haste to meet a July 1 government deadline, the Horseracing Integrity and Safety Authority was accused by state regulators and horsemen’s groups of sidestepping federal laws to guarantee transparency.

The criticism came to light Wednesday in 48 pages of government paperwork linked in a news release that restated the Federal Trade Commission’s approval of HISA’s racetrack safety rules that cover, among other things, veterinary inspections, voided claims and track maintenance. (See the FTC order here.)

The FTC’s 3-0 vote with one abstention was widely reported when it happened March 4. (Read more about that here.)

The FTC paperwork included critical feedback about the rushed process to write regulations and collect public comment as well as the uncertain path to fund HISA.

The Texas Racing Commission, for instance, claimed that HISA “violated procedural rules including ‘open records requirements’ ” in developing its racetrack safety regulations. TRC lawyer Virginia Fields said in a Jan. 19 letter to the FTC that “protecting participants and the integrity of the sport cannot be attained by violating constitutional tenets or targeting specific states’ breeds who are pressured to acquiesce through hastily passed federal legislation.”

To that end, the FTC said it “received several comments criticizing the 14-day comment period as too short,” including specific calls from the Oklahoma Horse Racing Commission and the Florida Horsemen’s Benevolent and Protective Association to extend it. The FTC admitted it “typically provides at least 30 and often 60 days or more for public comment, but they are also impractical under the unforgiving statutory timeline” of HISA.

The paperwork also acknowledged “the omission of a funding mechanism or cost analysis,” as pointed out by Eric Hamelback, CEO of the National HBPA. Hamelback urged that the FTC reject the rules in part because “states lack information about the costs to be imposed on state authorities.”

The FTC seemed to sympathize with racing and gaming authorities in Texas and Florida and the Association of Racing Commissioners International, all of whom sounded off about HISA’s “piecemeal” approach to writing and posting its rules.

“These commenters’ desire to evaluate all possible proposed rules at once, including the rule outlining the methodology for assessing fees, is understandable,” the FTC wrote. “But it is not the process that Congress chose in the (HISA) act. Instead, piecemeal consideration is baked into the act,” noting that the law called for the racetrack safety rules to be in place by March 3, but the budget structure is not due until April 2.

In giving HISA its approval, the FTC said it could not concern itself with the overarching questions raised in federal cases that claim the whole process has been unconstitutional.

“Some of these complaints are currently being litigated in ongoing lawsuits over (HISA),” the FTC wrote on the last of its 48 pages. “They are thus of no moment as to the narrow question before the commission about whether to approve or disapprove the racetrack-safety proposed rule.”

Opponents claim HISA violates Article 1 of the Constitution, which says Congress cannot delegate its legislative powers to other entities. They also say it goes against the 10th Amendment, which gives states the right to govern what the Constitution does not.

The National HBPA, the U.S. Trotting Association and at least nine states are involved in federal lawsuits designed to keep HISA from taking effect this summer. HISA and the FTC have opposed them, saying it is premature to question regulations that have not taken effect and that Congress did not illegally delegate any of its powers in passing the law in December 2020.