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Updated: Horseracing Safety And Integrity Act Attached To Federal Spending Bill Expected To Pass Monday Night

The Horseracing Safety and Integrity Act, appearing as an attachment to massive a federal spending bill, was passed by the U.S. House on Monday evening and will now head to the Senate, which is expected to approve the bill.

The text of the $1.4 trillion federal spending bill was released on Monday afternoon, paired with a $900 billion coronavirus relief package, reports CBSnews.com. Included in the 5,593-page legislation is the Horseracing Safety and Integrity Act, as Section FF, Title XII, commencing on page 5,488 of the bill.

The full text is available here.

Temporary federal funding measures passed this weekend only extend the government's funding through Monday night, and news outlets reported that the Senate's vote was expected to drag on late into Monday night.

The Horseracing Integrity and Safety Act would designate the Horseracing Integrity and Safety Authority to design and implement uniform national horse racing medication and racetrack safety standards, overseen by the Federal Trade Commission with the enforcement of the U.S. Anti-Doping Agency.

For more information about the Horseracing Integrity and Safety Act, the Paulick Report archive including the bill's history, op/eds, and analyses is available here.

Jockey Club Says USTA ‘Grasping At Straws’ With ‘Underwhelming’ Legal Attack On Horseracing Integrity And Safety Act

The Jockey Club on Wednesday released a response from its general counsel, Marc Summers, to the United States Trotting Association's (USTA) recent assertion that the Horseracing Integrity and Safety Act (HISA) is unconstitutional.

In a recent press release, the USTA touts a secret “white paper” purportedly concluding that the HISA is “possibly” unconstitutional. Of course, no one else has set eyes on this white paper. But it is hardly surprising that — after months of USTA opposition to any bill like HISA — the USTA's hired-gun law firm would come up with the USTA's preordained conclusion.

The USTA's unwillingness to release its legal analysis is telling: In reality, HISA is carefully crafted and constitutionally sound. The bill has been rigorously vetted. Many attorneys from different sectors (including Supreme Court and constitutional experts from Akin Gump Strauss Hauer and Feld LLP) have thought through the very issues the USTA raises, because we anticipated that those who oppose the bill for other reasons would lob this type of unfounded attack. In the face of decades of precedent supporting the proposed statutory scheme, none of the USTA's four constitutional arguments withstands scrutiny.

HISA does not violate the non-delegation doctrine. The USTA is correct, of course, that there are important limits on Congress' ability to “grant regulatory authority to private entities.” But that doctrine does not bar private entities from “help[ing] a government agency make its regulatory decisions, for '[t]he Constitution has never been regarded as denying to the Congress the necessary resources of flexibility and practicality' that such schemes facilitate.” Ass'n of Am. Railroads v. United States Dep't of Transp., 721 F.3d 666, 671 (D.C. Cir. 2013) (quoting Pan. Ref. Co. v. Ryan, 293 U.S. 388, 421 (1935)), vacated on other grounds, 575 U.S. 43 (2015). As long as a government agency has discretion to approve, disapprove, or modify a private party's proposed regulations, longstanding Supreme Court precedent makes clear that Congress is free to formalize the party's role in the regulatory process.

The Horseracing Integrity and Safety Authority (Authority) designated in HISA is subject to the oversight and approval of the Federal Trade Commission (FTC) in at least two critical respects. On the front end, the Authority must file any proposed rules (or rule changes) with the FTC, which must subject the rules to proper notice-and-comment and agency-approval procedures. Without the FTC's approval, the rules cannot take effect and have no binding legal force. On the back end, all sanctions imposed by the Authority “shall be subject to review by an administrative law judge” appointed by the FTC, subject to yet further review by the commissioners. Far from the “exalted brooding” the USTA criticizes, these statutorily mandated constraints ensure the FTC's ultimate responsibility for any meaningful action carried out under the HISA.

This relationship mirrors the enduring and effective model adopted by the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC). FINRA is a private, independent, nonprofit, self-regulatory organization that participates in the regulation of the securities brokerage industry, subject to SEC oversight. As with the proposed Authority-FTC scheme, FINRA rules must be approved by the SEC and FINRA's disciplinary actions are subject to SEC review. Courts considering challenges to FINRA on the non-delegation grounds that the USTA's press release trumpets consistently have held that the contentions have “no merit.”

Grasping at straws, the USTA warns about (undefined) “law-enforcement powers” that “would be free from FTC oversight.” As an initial matter, the predicate for USTA's warning is false: Any powers carried out by the Authority, whether analogized to “law-enforcement powers” or not, would be cabined by specific rules the FTC adopts and specific review the FTC conducts over any resulting sanctions. In any event, the Authority's investigatory powers also parallel those that FINRA routinely carries out with respect to securities brokers and firms. In fact, other statutory schemes — such as Congress' express grant of broad investigatory authority to the U.S. Anti-Doping Agency (USADA), a private entity recognized as the official anti-doping agency for Olympic sports — impose far fewer constraints on self-regulatory organizations than the FINRA-SEC and Authority-FTC models impose.

Hedging its non-delegation challenge, the USTA alleges that the HISA may run afoul of the Appointments Clause and Article II removal restrictions. But the USTA does not acknowledge, let alone resolve, the tension between its two arguments: The non-delegation theory rests on the notion that HISA delegates regulatory authority to a private entity. Meanwhile, the Appointments Clause and removability concerns apply only to federal (i.e., non-private) entities. The fact that the pre-existing Authority designated by HISA is private — as USTA emphasizes to support its non-delegation challenge — dooms any Appointments Clause or removability challenge.
USTA's due process theory fares no better. Ignoring the exceedingly difficult standard for bringing a successful claim under the Due Process Clause, the press release vaguely cautions against “economically self-interested private actors.” But the Authority's only interest is improving the integrity and safety of horse racing. The “capture” theory that the USTA creates out of whole cloth lacks any basis. As the USTA recognizes, the majority of the Authority's board members are “independent” (i.e., from outside the equine industry). To be sure, the remaining board members will have industry experience and engagement. But it is difficult to understand how that statutory recognition of the value of informed voices constitutes a deprivation of due process. What's more, with respect to that minority group of board members, HISA expressly provides for equal representation among each of the six equine constituencies (trainers, owners and breeders, tracks, veterinarians, state racing commissions, and jockeys). And the committee tasked with nominating eligible candidates for board and standing-committee positions is made up of entirely non-industry members. The HISA further imposes broad conflicts-of-interest requirements to ensure that all board members and independent standing committee members (and their employees and family members) are free of all equine conflicts of interest.

All those safeguards mean the Authority's board will be even more constrained from self-dealing than the leadership of other self-regulatory organizations, including FINRA. Regardless, established precedent confirms what common sense indicates: Even when a private entity is engaged in the regulatory process, agency authority and surveillance serve as adequate guards against any promotion of self-interest. See, e.g., Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 399 (1940). The FTC's ability to overrule the Authority's proposed rules and sanctions ensures that neither the Authority nor the individuals making up its board can “use their position for their own advantage — to the disadvantage of their fellow citizens.” Pittston Co. v. United States, 368 F.3d 385, 398 (4th Cir. 2004).

Finally, no part of HISA commands states to do anything to which they don't freely agree. Instead of requiring the states to undertake any particular duties, the bill presents them with genuine choices: They can work with the Authority to effect the anti-doping program or they can relieve themselves of enforcement activity, with the Authority implementing the horse racing anti-doping and medication control program in the state. Further, the weakness in the USTA's anti-commandeering argument is laid bare by its reliance on an incorrect quotation from the bill. Rather than providing that “State law enforcement authorities shall cooperate and share information with the Authority,” the bill directs the Authority “to cooperate and share information” with state and federal law enforcement authorities whenever its investigation into violations of the horse racing anti-doping and medication control program uncovers a violation of state or federal law.

For all its grandstanding, the USTA's bottom line (apparently quoting its attorneys) is underwhelming to say the least: The “enactment would lead to extensive litigation and the possible invalidation of the statute.” Anyone can sue over anything — the mere existence of litigation says nothing about its likelihood of success. These are the facts: The HISA is ground firmly in 70 years of precedent and the Authority-FTC relationship closely parallels the long-running FINRA-SEC model. However, anything is “possible.” It is possible to place a winning trifecta bet six races in a row. But it is not likely. If Congress rejected every bill that could be litigated and “possibly” invalidated, it would never enact a new law.

The HISA is on solid constitutional footing.

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Officials Announce the Horseracing Integrity and Safety Authority; Horseracing Integrity Act to Be Introduced in Senate

Backed by the political clout of United States Senate Majority Leader Mitch McConnell (R-KY), proponents of a federal bill mandating an independent anti-doping and medication control program for horse racing announced at an Aug. 31 press conference at Keeneland that a retooled version of the framework of legislation that has existed since 2015 will be introduced in the Senate in September by McConnell himself.

Backers of the bill spoke Monday of newfound compromise and consensus among the sport’s stakeholders that they said would help to usher the Horseracing Integrity and Safety Act (HSIA) to passage. They also outlined how a nine-member oversight board known as the Horseracing Integrity and Safety Authority would craft the new program, and how that Authority would contract with the United States Anti-Doping Agency (USADA) to manage and administer the new set of rules. A fresh component that would also cover racetrack safety standards will also be written into McConnell’s new version of the bill.

But more questions than answers were raised by the half-hour media event. There was no discussion of how this new Authority would be funded, and there was zero mention of the contentious topic of race-day medication (specifically Lasix), the prohibition of which has been a difficult sticking point in previous versions of the bill.

Although a representative from Churchill Downs, Inc. (CDI), was on the sales pavilion stage with the bill’s proponents and the Horsemen’s Benevolent and Protective Association (HBPA) was mentioned as a supporter two minutes before the press conference ended, there was no discussion about what tradeoffs had been made to gain the favor of those two entities, both of which had previously not supported federally mandated oversight of the sport.

In addition, the post-conference question-and-answer session with reporters was not made available to journalists working off the internet stream. TDN emailed McConnell’s media liaison three brief follow-up questions about funding, the status of race-day medication, and how the compromises with non-supporters came about. A spokesperson replied without addressing the questions, writing instead that “I will make sure you’re updated with more info when the Senator’s bill is introduced!”

The Blood-Horse subsequently reported that the new bill would still outlaw the use of race-day Lasix, but that states would be allowed to request a three-year waiver for some exceptions. TDN could not independently verify this aspect of the legislation.

McConnell, who is running for reelection to a seventh term, began the introduction of his bill by saying he decided to get involved in the crafting of federal horse racing legislation after reading that the Washington Post had editorialized banning the sport outright.

“We’ve seen painful tragedies on the track in recent years. Doping scandals have rocked the horse racing community,” McConnell said. “These challenges pose a threat, not only to this industry, but also to the 24,000 Kentuckians who work in it…. If we want to preserve horse racing and its future, we [need] to act.”

McConnell said his bill, which is expected to be introduced sometime after the current Congressional break that extends through Labor Day, will give federal recognition and enforcement responsibility for the Authority “to develop uniform, baseline standards. With the weight of the federal government behind the [Authority] we can improve current regulations. We can better protect every competitor and give each of them a fair shot at the winner’s circle.

“I’ve had some preliminary discussions with [Democratic Senator] Dianne Feinstein from California, who’s had an ongoing concern about this and an interest in it,” McConnell continued. “We anticipate we will have bipartisan support. This is not a particularly bipartisan place we’re in right now in Congress, as you may have noticed. But we are hopeful that a subject like this can overcome the partisanship that’s pretty much been on full display as we get closer and closer to the election.”

U.S. Representative Andy Barr (R-KY), who co-chairs the Congressional Horse Caucus and has co-sponsored three previous versions of the Horseracing Integrity Act (2015, 2017, 2019), said that he plans to support an amendment to his existing piece of legislation that is still active in the House “to bring it into mirror-image conformity” with McConnell’s proposed version.

“The consensus we are here to announce and celebrate today not only accelerates our momentum, it is propelling us down the home stretch,” Barr said. “And I’m confident it will advance the safety, integrity, and international competitiveness of American horse racing.”

McConnell’s version, Barr said, “materially improves our bill by adding a focus on track surface safety, and by making reasonable changes that have enabled us to enlarge our coalition of support and bring more organizations with the industry together in support of our legislation…. As I’ve said many times, this legislation is not about more regulation. It is about creating a single, nationwide set of rules that will result in smarter, more effective, streamlined regulation for the industry.”

Barr said the previous three versions of the Integrity Act that he championed served to aid in “educating members [of Congress] about the industry and persuaded our colleagues that horse racing is a matter of interstate commerce, and that Congress has the constitutional authority to regulate it.”

Barr thanked Churchill Downs for working with his coalition and “joining the cause,” and he praised the HBPA for sharing an “influential voice in support of this legislation.”

But Barr did not elaborate on what those “reasonable changes” were that won over those two opponents. And Eric Hamelback, the HBPA’s national chief executive, did not return a voicemail request for comment left by TDN prior to deadline for this story.

CDI chief executive Bill Carstanjen, who as recently as last October said he had “serious concerns” about the Integrity Act and did not think federal legislation was “practical, reasonable, or imminent,” on Monday spoke in favor of McConnell’s forthcoming version of the bill.

“The crux of the bill is that this new entity, the Authority, will have jurisdiction over the design, implementation and enforcement of anti-doping and medication controls, as well as racetrack safety protocols,” Carstanjen said. “With respect to the anti-doping and medication control program, the Authority will contract with the United States Anti-Doping Agency (USADA) for their services in managing and administering the program developed by the authority. The Authority may also contract with state racing commissions, as it makes sense both with respect to the medication and control program and racetrack safety program.”

Bill Lear Jr., the vice chair of The Jockey Club, detailed how a “blue-ribbon panel” would choose an “independent board” that would, in turn, govern the Authority.

That independent board, Lear said, will be primarily comprised by people outside the industry, and it will be “supported by two substantive standing committees” (one for medication and anti-doping, another for track safety). A third standing committee, he explained, will evolve out of the blue-ribbon panel into a “permanent nominating committee to ensure that we always have top-quality people, the kind we would want to regulate the industry, all with no conflicts.”

The enforcement entity will be USADA, Lear said, adding that “the hallmark of this entire program will be independence, industry expertise, and effective enforcement.”

Following McConnell’s introduction of the Horseracing Integrity and Safety Act in Lexington, Monday, industry groups and legislators released statements in support of the bill. Their statements follow.

NYRA President and CEO Dave O’Rourke:

“NYRA has long supported a national approach to medication control and anti-doping across the sport of horse racing. The safety and welfare of the athletes competing at NYRA tracks is our highest priority, which is why NYRA supports the Horseracing Integrity and Safety Act and urges quick consideration by Congress.

“NYRA is committed to providing the safest possible environment for racing and training by adopting and implementing the best proven safety practices in consultation with independent experts, veterinarians, horsemen and regulators.”

For additional information on NYRA’s industry leading commitment to safety, visit https://www.nyrainc.com/about/nyra-safety.

Craig Fravel, Chief Executive Officer of The Stronach Group’s 1/ST RACING

“1/ST RACING is committed to achieving the highest level of horse care and safety standards in Thoroughbred racing and we strongly urge Congress to consider the adoption of The Horseracing Integrity and Safety Act that will introduce national policies to control medication and regulate anti-doping in the sport of horseracing.

At 1/ST RACING our priority is to ensure the safety of our horses and riders and we believe that the investment into equine health and safety is not only the right thing to do, it is crucial to the future of Thoroughbred horseracing. The Horseracing Integrity and Safety Act recognizes that industry stakeholders including the owners, trainers, breeders, jockeys, and racetrack operators must be unified toward a new standard of equine health, safety and welfare.”

Joe Appelbaum, President of the New York Thoroughbred Horsemen’s Association

“Horsemen should view today’s developments with the Horse Racing Integrity and Safety Act with hope. It’s been clear for a generation that a systematic approach to equine welfare is needed and this effort is a big step in that direction. The broad changes proposed today by Senator McConnell are a significant improvement on previous drafts of legislation and I’d like to personally commend the industry participants for working together to overcome their differences.

The real work starts now, as we will need to not only pass this legislation, but actually implement its proposals. NYTHA looks forward to working with all parties to ensure that horse racing has a worthy system ensuring the safety of our equine athletes and a level playing field. Our primary stakeholders, horsemen and bettors, deserve nothing less.”

Representative Paul D. Tonko (D-NY)

“For nearly six years now, I have led a broad, bipartisan campaign to bring America’s sport of kings into the modern age, including common sense measures to protect our equine athletes and bring greater integrity to the sport of horseracing. Today’s announcement of legislation to be introduced in the Senate means, after all this time, we are rounding the final turn. With the support of Senate Majority Leader McConnell and Churchill Downs, I am confident that this compromise legislation will unite all who are interested in building a strong foundation and a prosperous future for this noble sport. I look forward to advancing this legislation in the House as an amended form of our Horseracing Integrity Act before the end of the year.”

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