FTC Approves Horseracing Integrity and Safety Authority’s Proposed Enforcement Rule Modification

The Federal Trade Commission has issued an Order approving modifications proposed by the Horseracing Integrity and Safety Authority to its enforcement rule after a public comment period.

The Horseracing Integrity and Safety Act, which recognized the Authority, includes a requirement that its rules (and modifications to those rules, such as this one) must be submitted for approval to the FTC. The Act requires that the FTC approve submitted rules if it finds that they are “consistent with” the Act and the FTC’s procedural rules governing the submission process.

The FTC’s procedural rule provides that the FTC will publish the Authority’s proposed rules in the Federal Register for public comment if the Authority’s submissions meet certain criteria. Under the Act, the FTC has 60 days from the date of publication to approve or disapprove the proposed rule.

In the Order, the Commission describes the modifications proposed by the Authority. Three modifications were proposed in response to directives the Commission issued in its March 23, 2022 Order approving the original enforcement rule. The Authority also proposed other modifications on its own initiative in response to stakeholder feedback. In the Order, the Commission explains why the proposed rule modification is consistent with the Act, but it also identifies two issues in which the Authority erred and directs the Authority to fix them. First, the Commission directs the Authority to refine the definition of its access power to exactly match the language of the Act, a revision that the Authority, in its response to the public comments, conceded would be appropriate. Second, the Commission directs the Authority to not rely on the broad terms “device” and “object” in using its seizure power, because devices and objects such as computers and phones should not be subject to seizure when the data they contain can be subpoenaed, and to file a supplemental proposed modification with a new definition within 30 days. Subject to these directives, the Order approves the proposed rule modification.

The Commission vote to approve the rule modification was 4-0-1, with Commissioner Christine S. Wilson abstaining.