[Federal Register Volume 88, Number 144 (Friday, July 28, 2023)]
[Notices]
[Pages 48849-48852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16000]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. P222100]


Horseracing Integrity and Safety Authority Enforcement Rule 
Modification

AGENCY: Federal Trade Commission.

ACTION: Notice of Horseracing Integrity and Safety Authority (HISA) 
proposed rule modification; request for public comment.

-----------------------------------------------------------------------

SUMMARY: The Horseracing Integrity and Safety Act of 2020 recognizes a 
self-regulatory nonprofit organization, the Horseracing Integrity and 
Safety Authority, which is charged with developing proposed rules on a 
variety of subjects. Those proposed rules and proposed rule 
modifications take effect only if approved by the Federal Trade 
Commission. The Authority submitted to the Commission a proposed rule 
modification on Enforcement on May 31, 2023. The Office of the 
Secretary of the Commission determined that the proposal complied with 
the Commission's rule governing such submissions. This document 
publicizes the Authority's proposed rule modification's text and 
explanation, and it seeks public comment on whether the Commission 
should approve or disapprove the proposed rule modification.

DATES: If approved, the HISA proposed rule modification would take 
effect upon approval, and the Commission must approve or disapprove the 
proposed rule modification on or before September 26, 2023. Comments 
must be received on or before August 11, 2023.

ADDRESSES: Interested parties may file a comment online or on paper by 
following the instructions in the Comment Submissions part of the 
SUPPLEMENTARY INFORMATION section below. Write ``HISA Enforcement Rule 
Modification'' on your comment and file your comment online at https://www.regulations.gov. If you prefer to file your comment on paper, mail 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex H), 
Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: John H. Seesel (202-326-2702), 
Associate General Counsel, Office of the General Counsel, Federal Trade 
Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Self-Regulatory Organization's Statement of the Background, 
Purpose of, and Statutory Basis for the Proposed Rule Modification
    a. Background and Purpose
    b. Statutory Basis
II. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Modification and Discussion of 
Alternatives
III. Legal Authority
IV. Effective Date
V. Request for Comments
VI. Comment and Submissions
VII. Communications by Outside Parities to the Commissioners or 
Their Advisors
VIII. Self-Regulatory Organization's Proposed Rule Language

Background

    The Horseracing Integrity and Safety Act of 2020 \1\ recognizes a 
self-regulatory nonprofit organization, the Horseracing Integrity and 
Safety Authority (``HISA'' or ``the Authority''), which is charged with 
developing proposed rules on a variety of subjects. Those proposed 
rules and proposed rule modifications take effect only if approved by 
the Federal Trade Commission.\2\ The proposed rules and rule 
modifications must be published in the Federal Register for public 
comment.\3\ Thereafter, the Commission has 60 days from the date of 
publication to approve or disapprove the proposed rule or rule 
modification.\4\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 3051 through 3060.
    \2\ 15 U.S.C. 3053(b)(2).
    \3\ 15 U.S.C. 3053(b)(1).
    \4\ 15 U.S.C. 3053(c)(1).
---------------------------------------------------------------------------

    Pursuant to Section 3053(a) of the Horseracing Integrity and Safety 
Act of 2020 and Commission Rule 1.142, notice is hereby given that, on 
May 31, 2023, the Authority filed with the Federal Trade Commission an 
Enforcement proposed rule modification and supporting documentation as 
described in Sections s I and II of this publication, which Items have 
been prepared by the Authority. The Office of the Secretary of the 
Commission determined that the filing complied with the Commission's 
rule governing such submissions.\5\ The Commission publishes this 
notice to solicit comments on the proposed rule modification from 
interested persons.
---------------------------------------------------------------------------

    \5\ 16 CFR 1.140 through 1.144; see also Fed. Trade Comm'n, 
Procedures for Submission of Rules Under the Horseracing Integrity 
and Safety Act, 86 FR 54819 (Oct. 5, 2021), https://www.federalregister.gov/documents/2021/10/05/2021-21306/procedures-for-submission-of-rules-under-the-horseracing-integrity-and-safety-act.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Background, Purpose 
of, and Statutory Basis for the Proposed Rule Modification

a. Background and Purpose

    The Horseracing Integrity and Safety Act of 2020 (``Act'') 
recognizes that the establishment of a national set of uniform 
standards for racetrack safety and medication control will enhance the 
safety and integrity of horseracing. On December 20, 2021, the 
Authority filed with the Commission the Rule 8000 Series, which 
establishes penalties and adjudicatory procedures for the enforcement 
of rules promulgated by the Authority. The Rule 8000 Series was 
published in the Federal Register on January 26, 2022,\6\ and approved 
by the Commission by Order dated March 25, 2022.\7\
---------------------------------------------------------------------------

    \6\ See Fed. Trade Comm'n, Notice of HISA Enforcement Proposed 
Rule (``Notice''), 87 FR 4023 (Jan. 26, 2022).
    \7\ Order Approving the Enforcement Rule Proposed by the 
Horseracing Integrity and Safety Authority, March 25, 2022.
---------------------------------------------------------------------------

    In its Order, the Commission directed the Authority to file 
modifications to several provisions in the Rule Series 8000, including 
a modification which ``further defines the meaning of ``object'' and 
``device'' within proposed Rule 8400(a)(2)'s list of items eligible for 
seizure (``medication, drug, substance, paraphernalia, object, or 
device'') and that provides a process for the return of seized property 
if no violation is found.'' \8\ In a subsequent Order dated September 
23, 2022, which approved the proposed modifications to the Rule 8000 
Series, the Commission directed the Authority to further refine the 
language pertaining to the Authority's power to seize items.\9\
---------------------------------------------------------------------------

    \8\ Id. at 34-35.
    \9\ Order Approving the Enforcement Rule Modification Proposed 
by the Horseracing Integrity and Safety Authority, September 23, 
2022.
---------------------------------------------------------------------------

    The Authority therefore proposes the rule modifications described 
in this publication in order to fulfill the Commission's directive. The 
proposed

[[Page 48850]]

rule modification is described in detail in Section II of this 
publication. The modifications have been crafted in the most precise 
manner possible to resolve the specific issues that the Commission 
directed the Authority to address. No reasonable alternatives presented 
themselves for consideration in effecting the very narrowly focused 
changes necessary to comply with the Commission's directive.
    The proposed rule modification will affect Covered Persons by 
clarifying with particularity the objects and devices subject to search 
and seizure in the course of investigations conducted by the Authority. 
Covered Horses and Covered Horseraces will not be directly affected by 
these modifications to the search and seizure provisions in the Rule 
8000 Series, since these provisions focus specifically upon 
investigations of Covered Persons and other individuals. But Covered 
Horses and Covered Horseraces will be affected by--and benefit from--
the effective enforcement through the Rule 8000 Series of the 
Authority's racetrack safety program. The program safeguards and 
enhances in many ways the health and safety of Covered Horses 
participating in Covered Horseraces under the jurisdiction of the 
Authority. The clarity and soundness of the search and seizure 
provisions will promote effective enforcement of the program.
    With the review, input and ultimate approval of the Authority's 
Board of Directors, the proposed rule modification to Rule 8400 
conforms to the directive in the Commission's Order of September 23, 
2022. HISA submits herewith the proposed rule modification for 
Commission approval.

b. Statutory Basis

    The Horseracing Integrity and Safety Act of 2020, 15 U.S.C. 3051 
through 3060.

II. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Enforcement Proposed Rule Modification

    In its Order dated March 25, 2022, the Commission directed the 
Authority ``to submit to the Commission a supplemental proposed rule 
modification by July 1, 2022, in which the Authority further defines 
the meaning of `object' and `device' within proposed Rule 8400(a)(2)'s 
list of items eligible for seizure (`medication, drug, substance, 
paraphernalia, object, or device') and that provides a process for the 
return of seized property if no violation is found.'' \10\ The 
Authority filed a modification in response to the Commission's 
directive, but the modification retained the broad terms ``object'' and 
``device.'' The Commission in its subsequent Order dated September 23, 
2022, directed the Authority to further refine the language pertaining 
to the Authority's power of seizure. Specifically, the Order states as 
follows: ``The Authority is hereby directed to not rely on the words 
`object' or `device' in Rule 8400(a)(2) to effectuate a seizure. It is 
further directed to submit within 30 days of this Order a proposed rule 
modification to define further the type of item subject to a seizure to 
include items such as `intravenous tubing, oral dosing syringes, 
needles, nasal gastric tubes, various types of container bags, and 
vials' and other items such as illegal whips and shock devices, but it 
should not include in the proposed definition generic nouns that could 
be applied to authorize seizure of computers, phones, cars, or other 
objects that are not themselves evidence of a violation.'' \11\
---------------------------------------------------------------------------

    \10\ Order Approving the Enforcement Rule Proposed by the 
Horseracing Integrity and Safety Authority, March 25, 2022. pp. 34-
35.
    \11\ Order Approving the Enforcement Rule Modification Proposed 
by the Horseracing Integrity and Safety Authority of September 23, 
2022, p. 15.
---------------------------------------------------------------------------

    The Proposed Rule Modification complies with the Commission's Order 
by deleting the words ``object'' and ``device,'' and adding instead a 
list of items similar to that specified in the Commission's Order. The 
pertinent provision, Rule 8400(a)(2), has been revised as follows, with 
language stricken as indicated and new language added as underlined 
below:

[[Page 48851]]

[GRAPHIC] [TIFF OMITTED] TN28JY23.047

    The Authority believes that the modification of the language as 
described above conforms with the Commission's directive. The words 
``object'' and ``device'' have been deleted and a new provision has 
been added in Rule 8400(a)(2)(ii) which sets forth a more specific list 
of items as described by the Commission. The word ``paraphernalia'' has 
also been replaced with the more specific term ``injectable.'' In 
addition, a reference to computers and phones has been deleted in a 
provision relating to the return of seized property in Rule 8400(b).
    The Commission's Order of September 23, 2022, also directed the 
Authority to ``correct the potential inconsistency it conceded in its 
response to comments by replacing `relate to' with the Act's exact 
phrase in defining the access power of Rule 8400(a)(1).'' The proposed 
rule modification complies with this request by replacing the phrase 
``relate to'' in Rule 8400(a)(1)(i) and (ii) with the phrase ``are used 
in,'' as utilized in the search and seizure provision in 15 U.S.C. 
3054(c)(1)(A)(i).
    The Commission's Order specifies that this proposed rule 
modification is not subject to pre-submission informal public comment 
under the Commission's procedural rule, 16 CFR 1.142(f).
    All the changes proposed in the proposed rule modification are 
intended to enhance the Rule 8000 Series Enforcement Rules in a manner 
consistent with 15 U.S.C. 3057(d). An effective enforcement system 
builds public confidence in the sport by ensuring that Covered 
Horseraces are conducted in a fair and transparent manner. The proposed 
rule modification considers the unique character of horseracing and the 
organizational structure of the Authority, and it is carefully tailored 
to respond to the Commission's directive to narrow the seizure powers 
of the Authority as set forth in Rule 8400.
    Covered Persons will benefit from the effective enforcement of the 
rules, the standards of integrity in racing that the rules establish, 
and the deterrence of violations.

III. Legal Authority

    This rule modification is proposed by the Authority for approval or 
disapproval by the Commission under 15 U.S.C. 3053(c)(1).

IV. Effective Date

    If approved by the Commission, this proposed rule modification will 
take effect immediately.

V. Request for Comments

    Members of the public are invited to comment on the Authority's 
proposed rule modification. The Commission requests that factual data 
on which the comments are based be submitted with the comments. The 
supporting documentation referred to in the Authority's filing, as well 
as the written comments it received before submitting the proposed rule 
modification to the Commission, are available for public inspection at 
https://www.regulations.gov under docket number FTC-2022-0044.
    The Commission seeks comments that address the decisional criteria 
provided by the Act. The Act gives the Commission two criteria against 
which to measure proposed rules and rule modifications: ``The 
Commission shall approve a proposed rule or modification if the 
Commission finds that the proposed rule or modification is consistent 
with--(A) this chapter; and (B) applicable rules approved by the 
Commission.'' \12\ In other words, the Commission will evaluate the 
proposed rule modification for its consistency with the specific 
requirements, factors, standards, or considerations in the text of the 
Act as well as the Commission's procedural rule.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 3053(c)(2).
---------------------------------------------------------------------------

VI. Comment and Submissions

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 11, 2023. 
Write ``HISA Enforcement Rule 8400 Modification'' on your comment. Your 
comment--including your name and your State--will be placed on the 
public record of

[[Page 48852]]

this proceeding, including, to the extent practicable, on the website 
https://www.regulations.gov.
    Because of the Commission's heightened security screening, postal 
mail addressed to the Commission will be subject to delay. The 
Commission strongly encourages that comments be submitted online 
through the https://www.regulations.gov website. To ensure that the 
Commission considers your online comment, please follow the 
instructions on the web-based form.
    If you file your comment on paper, write ``HISA Enforcement Rule 
Modification'' on your comment and on the envelope, and mail your 
comment to the following address: Federal Trade Commission, Office of 
the Secretary, 600 Pennsylvania Avenue NW, Suite CC-5610 (Annex H), 
Washington, DC 20580.
    Because your comment will be placed on the public record, you are 
solely responsible for making sure that your comment does not include 
any sensitive or confidential information. In particular, your comment 
should not contain sensitive personal information, such as your or 
anyone else's Social Security number; date of birth; driver's license 
number or other State identification number or foreign country 
equivalent; passport number; financial account number; or credit or 
debit card number. You are also solely responsible for making sure your 
comment does not include any sensitive health information, such as 
medical records or other individually identifiable health information. 
In addition, your comment should not include any ``[t]rade secret or 
any commercial or financial information which . . . is privileged or 
confidential''--as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)--including in 
particular competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c), 16 CFR 4.9(c). 
In particular, the written request for confidential treatment that 
accompanies the comment must include the factual and legal basis for 
the request and must identify the specific portions of the comment to 
be withheld from the public record. See FTC Rule 4.9(c). Your comment 
will be kept confidential only if the General Counsel grants your 
request in accordance with the law and the public interest. Once your 
comment has been posted publicly at https://www.regulations.gov--as 
legally required by FTC Rule 4.9(b), 16 CFR 4.9(b)--we cannot redact or 
remove your comment, unless you submit a confidentiality request that 
meets the requirements for such treatment under FTC Rule 4.9(c), and 
the General Counsel grants that request.
    Visit the FTC website to read this document and the news release 
describing it. The FTC Act and other laws the Commission administers 
permit the collection of public comments to consider and use in this 
proceeding as appropriate. The Commission will consider all timely and 
responsive public comments it receives on or before August 11, 2023. 
For information on the Commission's privacy policy, including routine 
uses permitted by the Privacy Act, see https://www.ftc.gov/siteinformation/privacypolicy.

VII. Communications by Outside Parties to the Commissioners or Their 
Advisors

    Written communications and summaries or transcripts of oral 
communications respecting the merits of this proceeding, from any 
outside party to any Commissioner or Commissioner's advisor, will be 
placed on the public record. See 16 CFR 1.26(b)(5).

VIII. Self-Regulatory Organization's Proposed Rule Language

    The following language reflects the Enforcement rule with the 
proposed modifications incorporated. A redline version that shows every 
way in which the previously approved Enforcement rule would be modified 
by the proposed rule modification is available as Exhibit A on the 
docket for this matter at https://www.regulations.gov.

8400. Investigatory Powers

    (a) The Commission, the Authority or their designees:
    (1) Shall have free access to:
    (i) with regard to Covered Persons, books, records, offices, 
racetrack facilities, and other places of business of Covered Persons 
that are used in the care, treatment, training, and racing of Covered 
Horses, and
    (ii) with regard to any person who owns a Covered Horse or performs 
services on a Covered Horse, books, records, offices, facilities, and 
other places of business that are used in the care, treatment, 
training, and racing of Covered Horses.
    (2) May seize:
    (i) any medication, drug, substance, or injectable in violation or 
suspected violation of any provision of 15 U.S.C. Chapter 57A or the 
regulations of the Authority; and
    (ii) intravenous tubing, syringes, needles, nasogastric tubes, 
container bags, vials, electrical devices, riding crops not in 
compliance with Rule 2281, and similar items that may be evidence of a 
violation or suspected violation of any provision of 15 U.S.C. Chapter 
57A or the regulations of the Authority.
    (b) Upon final resolution of a violation, the Commission, the 
Authority or their designees shall return seized property, the 
possession of which is not specifically prohibited by the Act or the 
rules of the Authority.
    (c) A Covered Person shall:
    (1) Cooperate with the Commission, the Authority or their designees 
during any investigation; and
    (2) Respond truthfully to the best of the Covered Person's 
knowledge if questioned by the Commission, the Authority, or their 
designees about a racing matter.
    (d) A Covered Person or any officer, employee or agent of a Covered 
Person shall not hinder a person who is conducting an investigation 
under or attempting to enforce or administer any provision of 15 U.S.C. 
chapter 57A or the regulations of the Authority.
    (e) The Commission or the Authority may issue subpoenas for the 
attendance of witnesses in proceedings within their jurisdiction, and 
for the production of documents, records, papers, books, supplies, 
devices, equipment, and all other instrumentalities related to matters 
within the jurisdiction of the Commission or the Authority.
    (f) Failure to comply with a subpoena or with the other provisions 
of this Rule may be penalized by the imposition of one or more 
penalties set forth in Rule 8200.
    (g) The Commission or the Authority may administer oaths to 
witnesses and require witnesses to testify under oath in matters within 
the jurisdiction of the Commission or the Authority.

    By direction of the Commission.
April J. Tabor,
Secretary.
[FR Doc. 2023-16000 Filed 7-27-23; 8:45 am]
BILLING CODE 6750-01-P