Churchill Downs Asks the FTC to Investigate Horse Racing's Own Regulator

A four-page letter from the Kentucky Derby's owner asks the Federal Trade Commission to review HISA's governance, transparency and technology controls. It was copied to all nine HISA directors and to five members of Congress.

• Churchill Downs Incorporated chief executive Bill Carstanjen wrote to the Federal Trade Commission on 28 August asking it to require, or itself conduct, an independent review of the Horseracing Integrity and Safety Authority
• The letter cites questions over HISA's governance, transparency, technology controls and accountability, and was copied to all nine HISA directors, to chief executive Lisa Lazarus and to a bipartisan group of lawmakers including Ted Cruz, Maria Cantwell, Mitch McConnell, James Comer and Paul Tonko
• The National Horsemen's Benevolent and Protective Association wrote in support, making this a rare alignment between a major track operator and the horsemen's body
• Two controversies sit behind it: an unusual run of results and wagering activity around horses connected to the Fair Hill Training Center, and alleged unauthorised access to confidential horse health records through the HISA Portal
• The letters followed the acceptance of a suspension from HISA by Marshall Gramm

The Regulated Are Asking the Regulator's Regulator to Step In

Bill Carstanjen, chief executive of Churchill Downs Incorporated, sent a four-page letter dated 28 August to the Federal Trade Commission asking it to require an independent review of the Horseracing Integrity and Safety Authority, or to conduct one itself. The letter raises what it describes as serious questions about HISA's governance, transparency, technology controls and accountability.

The distribution list is part of the message. It was addressed to FTC chairman Andrew Ferguson and Commissioner Mark Meador, and copied to all nine HISA directors and to chief executive Lisa Lazarus, as well as to a bipartisan group of federal lawmakers including Senators Ted Cruz, Maria Cantwell and Mitch McConnell and Representatives James Comer and Paul Tonko.

Churchill Downs is not alone. The National Horsemen's Benevolent and Protective Association wrote in support of an independent review, which puts a major track operator and the principal horsemen's organisation on the same side of an argument about the regulator, a combination that does not occur often.

Two matters sit behind the request. One concerns an extraordinary run of results and unusual wagering activity around horses connected to the Fair Hill Training Center, referred to in coverage as the "Fair Hill Five". The other concerns alleged unauthorised access to confidential horse health records held on the HISA Portal, which goes directly to whether the authority can keep the data it collects secure. Both letters followed the acceptance of a HISA suspension by Marshall Gramm.

The FTC Is the Only Available Address, and That Is the Structural Problem

HISA is unusual among American regulators in that it is a private, self-regulatory authority whose rules take effect only when approved by the Federal Trade Commission. That design was intended to solve horse racing's fragmentation, replacing a patchwork of state rules with one national framework. It also means there is no ordinary appeal route for a stakeholder who thinks the authority itself is failing. There is no legislature to lobby for a change of leadership, no licensing body above it and no state commission with jurisdiction. The only party with standing to look at HISA is the FTC. So a track operator that wants a governance review has to write to a consumer protection agency and copy in Congress, which is exactly what has happened. Whatever the merits of the complaints, the mechanism reveals a supervisory gap that the industry has been living with since the authority was created.

Data Security Is the More Serious of the Two Allegations

The wagering pattern question will be settled or not on the evidence, and racing has processes for that. The portal allegation is different in kind. HISA's entire model depends on compelling participants to submit veterinary records, treatment histories and medication data, on the basis that centralised information makes the sport safer and more honest. If confidential horse health records were accessible to people not entitled to see them, the authority's problem is not one incident but the consent underpinning the whole scheme. Trainers and owners hand over commercially and competitively sensitive information because they must. A regulator asking for that level of disclosure carries a correspondingly heavy obligation on custody, and this is the second story this week, after the identity vendor investigation in the casino sector, in which the weak point is the database rather than the rule.

A Track Operator and the Horsemen Agreeing Is the Signal Worth Reading

Churchill Downs and the horsemen's associations have spent years on opposite sides of purse structures, takeout, and the terms on which racing content is sold. Their alignment here does not make the complaints correct, and both parties have their own histories with HISA that inform how they frame it. But regulators generally survive criticism from one constituency and struggle when the criticism becomes common ground. HISA now has the operator of its most valuable race meeting and the body representing its participants both asking the FTC to look at how it is run. That is a governance problem before it is a factual one, and it will not be resolved by winning the argument about the Fair Hill horses.

The authority was designed so that only the FTC can hold it to account. It is about to find out how seriously the FTC takes that job.