West Virginia, brace yourselves for the world of horse racing and betting. The passion for horse betting runs deep in the state, and any developments in the equine sport on a national level are closely followed and mirrored in West Virginia.
In a legal battle of national significance, with specific implications for West Virginia, a federal appeals court has overturned a previous ruling on the constitutionality of the Horse Racing Integrity and Safety Act (HISA).
On November 18, the US Court of Appeals for the Fifth Circuit declared the Horse Racing Integrity and Safety Act as facially unconstitutional due to its violation of the private nondelegation doctrine. The court concluded that the Act grants unsupervised authority to a private entity, which goes against the principles of the doctrine.
West Virginia, along with Louisiana, has been one of the plaintiffs against HISA in their journey towards this decision. Their main concern, expressed in a lawsuit filed in July, was the financial strain that HISA’s strict testing regulations would impose on state racing commissions.
The preliminary injunction granted both states the ability to temporarily refrain from implementing the rules imposed by the HISA Authority. It is important to note that the federal court ruling did not delve into the constitutionality of HISA. Unfortunately, the injunction’s duration was short-lived.
HISA, along with its nominal regulatory body, the Federal Trade Commission (FTC), effectively appealed and obtained an administrative stay in August for the injunction. However, the recent ruling on November 18 has reversed this decision, leading to the lifting of the stay.
According to the Thoroughbred Daily News, the chairman of the West Virginia Racing Commission (WVRC), Ken Lowe Jr., has been vocal about his stance on HISA since last spring. He has criticized the law, describing it as a “federal statute created by industry insiders who are disconnected from the challenges faced by small-scale racing in West Virginia.”
What happened in the courts with HISA?
In August, the appeals court heard oral arguments on the legal challenges to HISA’s constitutionality. November’s ruling came as a result of those challenges brought by:
- The NHBPA (National Horsemen’s Benevolent and Protective Association)
- opponents of the HISA Authority
- The FTC.
Prior to this appeal, the US District Court (Northern District of Texas) ruled that HISA did not infringe upon any constitutional provisions. Nevertheless, it recognized the legitimate concerns raised by the NHBPA.
The three-judge panel in November, however, had a different opinion. They argued that “a fundamental constitutional principle states that only the federal government can exercise federal power.” According to them, HISA is not affiliated with the federal government.
According to the panel, even though private entities like the HISA Authority can exercise federal power under the supervision of a government agency, the Authority has the ability to limit the FTC’s examination of suggested regulations and policy decisions, despite the fact that the FTC itself is a government agency.
The panel concluded that this decision would establish the Authority as the higher authority, instead of the FTC. Moreover, it would breach a fundamental protection by granting governmental power to a private entity that lacks accountability to the public.
According to the appeals court, “The Constitution prohibits that.”
Afterward, the district court received the case once again as the appeals court remanded it. Subsequently, HISA has the option to petition for an “en banc” hearing, which involves the participation of all judges in the court of appeals.
The option of appealing the case to the Supreme Court is available. However, it is uncertain whether either court will decide to consider the case.
What are the Horseracing Integrity and Safety Act and Authority?
HISA’s objective is to establish consistent horse racing regulations nationwide, as they previously differed in a fragmented manner from one state to another. This bipartisan legislation was scheduled to come into effect on July 1, 2022.
The original legislation, known as the Consolidated Appropriations Act, was enacted in 2020 as part of an omnibus bill.
In response to a series of track tragedies, such as the unfortunate occurrence of 40 horse deaths within a span of just over a year at Santa Anita Park, and the exposure of doping scandals, notably the 2020 investigation that resulted in charges against 27 individuals including trainers, veterinarians, and drug distributors, this initiative was launched.
The creation of the Horseracing Integrity and Safety Authority under HISA would entail specific responsibilities. These would encompass the formulation of regulations pertaining to:
- Anti-doping
- Medication control
- Racetrack safety
In order to fulfill its responsibilities, the Authority would establish two permanent committees.
- The standing committee for racetrack safety.
- The standing committee for anti-doping and medication control.
Although the Act primarily pertains to thoroughbreds, the Authority has the discretion to establish rules that encompass other breeds. Moreover, HISA aims to safeguard both jockeys and horses.
“The primary risk to jockey safety, as highlighted by Lisa Lazarus, the CEO of HISA, during her speech to the Jockey Club on December 6th, is an unsound horse.”
However, others such as Bennett Liebman, a former acting co-chair of the New York State Racing and Wagering Board, have raised concerns about the FTC’s involvement for reasons unrelated to constitutionality. Liebman argues that the FTC should prioritize other important industries instead of focusing on horse racing. Additionally, he highlights the fact that the FTC lacks expertise in animal welfare, further questioning their suitability for overseeing this particular issue.
Marty Irby from Animal Wellness Action expressed contentment with the restricted supervision, but cautioned that if HISA did not succeed, horse racing in the United States could face a fate similar to greyhound racing and the Ringling Bros. and Barnum & Bailey Circus.
HISA timeline:
- As part of the omnibus Consolidated Appropriations Act, the HISA is passed in 2020.
- In March 2022, the constitutionality of HISA is upheld by the US District Court for the Northern District of Texas.
- In July 2022, HISA faces an injunction from West Virginia and Louisiana.
- In August 2022, the HISA and the FTC successfully obtain a temporary halt to the injunction.
- In November 2022, the US Court of Appeals for the Fifth Circuit declares HISA as “facially unconstitutional.” Consequently, the injunction on HISA is lifted.
HISA and West Virginia horse betting from here
Play West Virginia was informed by Joe Moore, the executive director of the West Virginia Racing Commission (WVRC), that while HISA plans to pursue additional court review, West Virginia will continue to adhere to the West Virginia Thoroughbred Rules of Racing.
Ben Mosier, executive director of the Horseracing Integrity & Welfare Unit, stated this week that HISA will persist in its educational and outreach endeavors aimed at all stakeholders within the Thoroughbred industry, as well.
The FTC stated in its order that the fundamental principle of the Act is the requirement for consistency. Nonetheless, the company has decided to cancel its intention of launching the Anti-Doping and Medication Control Policy in January.
In a speech following the ruling, Lazarus had hinted at the FTC’s statement, suggesting the importance of unity within the racing industry. She emphasized the industry’s unwavering dedication to the welfare of horses, stating, “At the end of the day, our commitment lies with these magnificent creatures.”
Attorney Alan Foreman, chairman and CEO of the Thoroughbred Horsemen’s Association, may have the last word for now regarding the business end.
In an interview with theracingbiz.com, he expressed his concerns about the current situation, stating that it is a period of great confusion and overall unfavorable conditions for the industry. The instability and confusion prevailing at this time are detrimental to our business.
Related Articles
