A federal police drone spotted the black Holden Commodore creating circles and leaving clouds of smoke just metres away from pedestrians on Flemington Road during the Summernats festival on Saturday.
The alleged 22-year-old male driver was spoken to in the nearby suburb of Mitchell.
He allegedly had two children and two adults in the car during the burnout.
“The 22-year-old Macquarie man was issued with an Immediate Suspension Notice, suspending his right to drive in the ACT for three months,” police said in a statement.
“His Holden Commodore was also seized.”
The alleged driver will face court at a later date and is expected to face a slew of dangerous driving offences.
Festivalgoers were seen being bashed, beaten and kicked by guards with punches being thrown from both sides.
Summernats organisers and security contractor Red Dawn are investigating the matter.
Acting Superintendent Rod Anderson said he was alarmed with the dangerous driving and anti-social behaviour during the four-day festival.
“This type of behaviour on our roads placed other road users and pedestrians at significant risk,” he said.
“Anti-social behaviour was also prevalent, with police responding to various instances of fighting and general non-compliance from large crowds both inside and outside the event.
“It was really disappointing to see how many people engaged in this type of behaviour, with no regard for others that were there to enjoy the event.”