Supreme Court takes action in case that could ruin horse racing

The U.S. Supreme Court has temporarily blocked a ruling by the Fifth Circuit Court of Appeals that found the Horseracing Integrity and Security Authority (HISA)’s enforcement regulations unconstitutional, preventing immediate disruption to the multi-billion dollar horse racing industry.

HISA, which was created to establish uniform safety standards for the U.S. horse racing industry, plays a key role in overseeing the safety of both horses and jockeys. The sport, which generates $3.6 billion annually, according to Statista, has been under scrutiny for high-profile fatalities involving horses and inconsistent regulations across states.

Congress established HISA in 2020 to address these concerns and create a national regulatory framework to ensure safer racetrack conditions and anti-doping standards.

The HISA is fully implemented in May 2023 and is subject to oversight by the Federal Trade Commission (FTC).

However, the Fifth Circuit recently ruled that HISA’s enforcement powers violate the private nondelegation doctrine, which restricts Congress from delegating regulatory authority to private entities without sufficient oversight. The ruling, if it goes into effect, could overturn the safeguards HISA has implemented since its inception.

Supreme Court Justice Samuel Alito’s temporary stay delays the Fifth Circuit’s ruling, giving the high court time to consider whether to fully review the case. HISA’s legal team argues that without the stay, the industry would suffer “irreparable harm,” including increased horse deaths and regulatory chaos as the sport reverts to state oversight.

Alito’s order requires the National Horsemen’s Benevolent and Protective Association, which along with affiliated organizations convinced the Fifth Circuit Court of Appeals to rule against HISA, to file a response to the motion by September 30.

The Fifth Circuit’s decision conflicts with a ruling by the Sixth Circuit Court of Appeals, which upheld the constitutionality of HISA after Congress changed the law to give the FTC greater oversight of the agency’s rulemaking. This judicial split raises significant constitutional questions and increases the likelihood that the Supreme Court will ultimately take up the case.

HISA supporters say the organization has played a key role in securing the future of the industry by reducing fatalities and improving the overall integrity of the sport. They point to a 38 percent decrease in equine fatalities in the first quarter of 2024, attributing this positive change to HISA’s uniform standards.

In addition to these results, proponents of the concept compare it to the successes of other private regulators, such as the Financial Industry Regulatory Authority (FINRA), which courts have found to be constitutional.

Supporters also say HISA has helped prevent “irreparable harm” to the horse racing industry. Without its oversight, they warn, the sport could revert to inconsistent state regulations, increasing risks for both horses and jockeys.