The short-term fate of the Horseracing Integrity and Safety Authority rests in the Sixth Circuit Court of Appeals, while the long-term fate of the fledgling organization may lie in the hands of the Supreme Court. In the two weeks following a ruling by a three-judge panel of the U.S. Fifth Circuit Court of Appeals that HISA’s enabling legislation was unconstitutional, HISA supporters have pinned their hopes on the Sixth Circuit, where an appeal of a lower court’s ruling on the validity of HISA will be heard Wednesday. If the Sixth Circuit upholds the lower court’s ruling, then the constitutionality of the 2020 legislation forming HISA will have two opposing opinions, making it ripe for review by the Supreme Court. The Fifth Circuit ruling will not go into effect until the court issues a so-called mandate on Jan. 10, just 10 days after HISA is expected to roll out its Anti-Doping and Medication Control program, which will entail a massive effort by HISA to take responsibility for sampling collection, drug-testing, and enforcement of drug rules in 12 states – the only states that are holding live horse racing in January and where HISA will have jurisdiction at the start of the year. :: DRF Bets members get FREE DRF Past Performances - Formulator or Classic. Join now! HISA officials have said they are unbowed by the Fifth Circuit ruling and are moving forward to implement their new programs on Jan. 1. At the same time, HISA has filed a brief with the Sixth Circuit in advance of the Wednesday hearing, contending that the Fifth Circuit erred in its interpretation of the statute and the role of the Federal Trade Commission in overseeing HISA’s authority. “The Fifth Circuit ruling has not affected our preparations for this moment, nor our day-to-day operations,” said Lisa Lazarus, chief executive of HISA, in a newsletter distributed by HISA on Friday, referring to the Jan. 1 roll-out. “Our focus remains on the task at hand.” Although HISA has not yet taken a direct course of action to counter the Fifth Circuit decision, it is expected to weigh a handful of options in the next month, including whether to ask the entire Fifth Circuit to re-hear the case, known as a request for an en banc hearing; whether to ask for a stay of the ruling until the Sixth Circuit rules; and whether to seek legislative redress through Congress. None of those options is a sure thing. “HISA continues to explore all possible legal options related to the Fifth Circuit opinion,” HISA said in a statement in response to questions about what legal course it is considering. The Fifth Circuit ruled that HISA is “not subordinate” to the Federal Trade Commission, its nominal overseer. By constitutional requirement, the FTC must oversee HISA for Congress to delegate power to HISA, a private, non-profit company created by legislation passed late in 2020. The legislation allowed HISA to formulate its rules for its national regulatory program, but it required HISA to submit those rules for review and approval by the FTC. While two lower courts dismissed challenges to the legislation, the Fifth Circuit reversed one of the rulings on appeal, focusing on an interpretation that under the law the FTC “cannot review the Authority’s policy choices,” in the words of the three-panel judge that decided the case. “An agency does not have meaningful oversight if it does not write the rules, cannot change them, and cannot second-guess their substance,” the panel wrote. HISA’s brief to the Sxith Circuit said that the Fifth Circuit decision was based on “two fundamentally mistaken premises,” contending that the Fifth Circuit judges misread the legislation. In the brief, HISA attorneys said that the FTC “ultimately decides” the validity of the HISA-proposed rules, and that the FTC unquestionably has the power to modify rules submitted by HISA. The Fifth Circuit decision also has limited scope, in that the decision only applies to those jurisdictions it oversees – Louisiana, Texas, and Mississippi. As a result, HISA could choose to roll out its new rules Jan. 1 in all jurisdictions other than those directly impacted by the decision, but that could trigger legal challenges in other states opposed to HISA in lawsuits directly citing the Fifth Circuit ruling. In fact, the only jurisdiction that would be affected is Louisiana – Mississippi has no racetracks, and Texas earlier this year declined to submit to HISA’s jurisdictional authority, going so far as to refuse to validate a racetrack’s out-of-state simulcasting application so that HISA’s rules could not be enforced. (HISA’s enabling legislation was crafted in a way to limit its jurisdiction to horse races that are available for wagering across state lines.) Should the Sixth Circuit rule that HISA’s enabling legislation survives the constitutional test, that will likely set up an appeal to the Supreme Court to decide the issue. It also would likely accelerate efforts by HISA to obtain legislative relief that would clarify the FTC’s role in overseeing the authority, as a way to dodge any adverse ruling by the Supreme Court, where conservatives wary of federal power hold a 6-3 majority. :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.