Police said they were tipped off by a driver of a family car who said he had been overtaken by high-powered cars bearing rally-type markings in the north eastern region of Catalonia.
The managing director of Cannonball Run Europe, Tim Porter told Reuters on Tuesday that entrants in the rally of the same name had been fined by Spanish police, citing a law which the Spanish embassy later told his organisation does not exist.
"I think it is absolutely outrageous the police can make up laws as they go along," Porter said, adding that another of the rally entrants detained was charged with suspected speeding.
"At least half a dozen of them were picked up in a service station drinking coffee."
Police said they tracked down and impounded 71 cars including Porsches, Ferraris and Rolls Royces and took statements and addresses from their mostly British drivers.
"We suspect (the racers) of belonging to an illicit group, which organised illegal races which could put the lives of other people in danger," a Catalan regional police spokesman said.
A judge is now deciding whether to formally charge the drivers, he added. Their cars were released after they paid fines of between €150 (£102) and €400.
Police are attempting to identify the organisers of the rally, which drivers are believed to have paid thousands of pounds to join.