Court of Appeals strikes a blow to HISA
The U.S. Court of Appeals for the Fifth Circuit has once again ruled that the relationship between the Horseracing Integrity and Safety Authority and its federal overseer violates a provision of the Constitution called the non-delegation doctrine, setting up a potential showdown in the Supreme Court sometime in the future.
The ruling by the Fifth Circuit reiterates objections in a 2024 ruling by the same court that the Federal Trade Commission did not exercise enough authority over HISA to satisfy the “private non-delegation doctrine,” which is generally held to prohibit a federal agency from granting its own powers to a private company. The Fifth Circuit, like two other courts that had ruled on cases involving HISA's constitutionality in the past, was directed to revisit its previous ruling when the Supreme Court decided a case in the summer of 2025 that also considered the non-delegation doctrine. That case, FCC vs. Consumers' Research, upheld the constitutionality of a regulatory arrangement similar to that of the FTC and HISA.
Earlier this year, the U.S. Sixth Circuit reissued an opinion under the Supreme Court remand that upheld the constitutionality of the arrangement, as the Sixth Circuit had ruled in the past. With the Fifth Circuit and the Sixth Circuit once again at loggerheads, the Supreme Court will likely be petitioned to resolve the dueling opinions at a time when its docket is crammed with cases.
The Fifth Circuit’s jurisdiction includes Texas, Louisiana, and Mississippi, a non-racing state. The competing legal claims over HISA’s constitutionality have not prevented HISA from having jurisdiction in those states, with the exception of Louisiana, where HISA has been prevented from enforcing its rules since 2022 due to a separate stay issued by a different court. That stay is also in effect in West Virginia.
In Texas, tracks in that state have declined to send their simulcast signals to out-of-state markets to avoid HISA’s jurisdiction for nearly two years, a decision that has cost the tracks millions of dollars in revenue. The decision was based on a dispute between HISA and the Texas Racing Commission, whose former executive director had said that federal law did not override a state mandate to regulate racing in Texas.
In the ruling on Thursday, the Fifth Circuit repeated phrases and legal justifications contained in its 2024 decision, ruling that HISA does not “function subordinately” to the FTC because of its broad array of powers. The ruling also claimed that HISA’s own arguments about its subordinate role fell short of establishing a relationship that did not violate the non-delegation provision.
“A private entity that can investigate potential violations, issue subpoenas, conduct searches, levy fines, and seek injunctions – all without the say-so of [the FTC] – does not operate under that agency’s ‘authority and surveillance,' ” the ruling states. “Put another way, with respect to enforcement, HISA’s plain terms show that the Authority does not merely act ‘as an aid’ to the FTC[, which] does not ‘retain the discretion to approve, disapprove, or modify the Authority’s enforcement actions.”
In a statement, HISA said that the Fifth Circuit’s conclusion was “expected,” but the organization also said that it anticipated the Supreme Court to eventually take up the issue.
“While we await the Supreme Court’s ultimate word, we will continue to be focused on our mission of protecting the safety and integrity of Thoroughbred racing,” the statement said.
The case was brought by the National Horsemen’s Benevolent and Protective Association along with 12 of its state affiliates and several racing companies. The National HBPA and its affiliates have been especially critical of the costs of HISA while contending that the agency has been operating beyond the mandate granted by Congress in legislation passed initially in 2020 and amended in 2022 – largely at the behest of several large racing organizations concerned about the industry’s regulatory outcomes.
“We have been fighting this battle for the constitutional rights of horsemen for over five years, and we continue to win,” said Eric Hamelback, the chief executive officer of the National HBPA. “It is just common sense that Congress cannot make a private corporation the judge, jury, and executioner of our industry.”
Peter Ecabert, the National HBPA’s general counsel, said the organization “will fight this legal battle all the way to the Supreme Court if we have to.” He said a ruling in the National HBPA’s favor would mean that “horsemen will no longer be controlled by a small number of industry elite.”
:: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.