BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2790
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          ASSEMBLY THIRD READING
          AB 2790 (Committee on Governmental Organization)
          As Introduced  March 17, 2010
          Majority vote 

           GOVERNMENTAL ORGANIZATION     19-0                              
           
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          |Ayes:|Coto, Gilmore, Blakeslee, |     |                          |
          |     | Chesbro, Cook, De Leon,  |     |                          |
          |     |Evans, Galgiani, Hall,    |     |                          |
          |     |Hernandez, Jeffries,      |     |                          |
          |     |Lieu, Ma, Mendoza,        |     |                          |
          |     |Nestande, Portantino,     |     |                          |
          |     |Silva, Torres, Tran       |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY :   Adds the "Arlington Million" to the group of specific  
          stake races which are exempt from the 32-race per day limit on  
          imported races, as specified.  Specifically,  this bill   
          authorizes a Thoroughbred horse racing association or fair to  
          distribute the audiovisual signal and accept wagers on the  
          results of the Arlington Million while providing that these  
          races are exempt from the 32 race per day limit on imported  
          races, as defined.

           EXISTING LAW  :

          1)Provides that California Horse Racing Board (CHRB) regulate  
            the various forms of horse racing authorized in this state.

          2)Limits the number of races that may be imported by  
            associations and fairs to no more than 32 races per day on  
            days when live Thoroughbred or fair racing is being conducted  
            in this state, with specified exceptions.  Exempts from that  
            32-race per day limit races imported that are part of the race  
            card of certain prominent races, including the Kentucky Derby,  
            the Kentucky Oaks, the Preakness Stakes, the Belmont Stakes,  
            the Jockey Club Gold Cup, the Travers Stakes, the Breeders'  
            Cup, the Dubai Cup, or the Haskell Invitational.

          3)Provides that wagering on these races may occur without the  
            consent of the horsemen/women participating in the meet, and  








                                                                  AB 2790
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            without regard to the amount of purses involved with the  
            races.

          4)Authorizes Thoroughbred racing associations or fairs to  
            distribute the audiovisual signal and accept wagers on the  
            results of out-of-state and international Thoroughbred races  
            during the calendar period the association or fair is  
            conducting live racing, including days on which there is no  
            live racing being conducted by the association or fair.

           FISCAL EFFECT  :  This bill is keyed non-fiscal by the Legislative  
          Counsel.

           COMMENTS  :  The Arlington Million is a prestigious Grade 1 horse  
          race in the United States for Thoroughbred horses aged three  
          years and upward.  It is raced over a distance of 1 miles on  
          the turf at Arlington Park, Arlington Heights, Illinois (a  
          suburb of Chicago) in August each year.

          The Arlington Million, as its name implies was the first  
          Thoroughbred race to offer a purse of $1 million in August 1981.  
           It is part of the Breeders' Cup Challenge series, the winner of  
          the Arlington Million automatically qualifies for the Breeders'  
          Cup Turf.  The "Million" is considered by many in American  
          racing circle to be the most prestigious turf race in the  
          country behind only the Breeders' Cup.

          This measure provides that all races imported by a Thoroughbred  
          association or fair that are part of the race card of the  
          overall Arlington Million day would be exempted from the 32-race  
          per day limit as defined in current law.  Over the years, this  
          law has been amended to allow specific notable races to be  
          imported outside of this cap for promotional and financial  
          reasons.

          The author notes this bill will help to increase the wagering  
          handle on this specific day which will lead to increased purses,  
          racetrack revenue, and breeders' awards in California.  Purses  
          are important to California's racing industry because they  
          provide revenue to horse owners for their racing operations and  
          to breeders through an increase in the value of their breeding  
          stock.  California's racing industry has found that it's much  
          easier to make a big day bigger relating to their marketing  
          efforts rather than trying to increase attendance on a typical  








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          Wednesday or Thursday.  The bill will also give the racing  
          industry a marketing tool to increase on-track and off-track  
          attendance on this designated day because racing fans will want  
          to wager on all the races from the host track of the prestigious  
          Arlington Million horse race. 
           
          Satellite wagering  :  Satellite wagering via an off-track  
          facility has been legal in California since 1985.  It was  
          authorized at a time when California racetracks were beginning  
          to experience declining attendance and handle figures.  The  
          industry believed that making the product easier to access not  
          only would expose and market horse racing to potential  
          customers, but also would make it more convenient for the  
          existing patrons to wager more often.

           Simulcasting  :  Simulcasting is the process of transmitting the  
          audio and video signal of a live racing performance from one  
          facility to a satellite for retransmission to other locations or  
          venues where pari-mutuel wagering is permitted.  Simulcasting  
          provides racetracks with the   opportunity to increase revenues  
          by exporting their live racing content to as many wagering  
          locations as possible, such as other racetracks, fair satellite  
          facilities and Indian casinos.  Revenues are increased because  
          simulcasting provides racetracks that export their live content  
          with additional customers in multiple locations who would not  
          have otherwise been able to place wagers on the live racing  
          event.

           Racetrack attendance  :  There has been a general decline in the  
          number of people attending and wagering at live horse racetracks  
          in California due to a number of factors, including increased  
          competition from other forms of gaming, unwillingness of  
          customers to travel a significant distance to racetracks and the  
          availability of off-track wagering. The declining attendance at  
          live horse racing events has prompted racetracks to rely on  
          revenues from in-state and out-of-state satellite wagering and  
          account wagering. 

           Related legislation  :  SB 899 (Denham) of 2010, deletes the  
          statewide cap on the number of out-of-country thoroughbred races  
          that a thoroughbred racing association or fair may import,  
          simulcast and on which wagers may be accepted. (Pending on  
          Senate Floor)









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          AB 1857 of 2010, increases, from 32 to 36, the limitation on the  
          total number of out-of-state Thoroughbred races that may be  
          imported per day by a Thoroughbred association or fair that is  
          conducting a live race meet with approval by CHRB.  (Pending on  
          Assembly Floor)

           
          Prior legislation  :  AB 3074 (Governmental Organization  
          Committee), Chapter 510, Statutes of 2008, allows a harness  
          racing association in California to import all of the races  
          conducted on Kentucky Futurity day, irrespective of the six-race  
          day limit in law and increases, from 23 to 32, the limitation on  
          the total number of out-of-state Thoroughbred races that may be  
          imported per day by a Thoroughbred association or fair that is  
          conducting a live race meet.

          AB 1736 (Assembly Committee on Governmental Organization),  
          Chapter 444, Statutes of 2007, adds the "Travers Stakes" to the  
          group of specific stake races which are exempt from the 23-race  
          per day limit on imported races, as specified.

          SB 379 (Denham), Chapter 443, Statutes of 2007, adds the Dubai  
          World Cup race to a specified list of races that would be  
          exempted from the 23-race per day limit on imported races for  
          satellite wagering in California.

          SB 590 (Perata), Chapter 936, Statutes of 2001, authorizes  
          Thoroughbred racing associations and fairs in the northern  
          racing zone to increase the number of imported racing simulcasts  
          available to be wagered upon if the CHRB reduces the number of  
          live racing days.

          AB 509 (Jerome Horton), Chapter 235, Statutes of 2004, allows a  
          Thoroughbred or fair association to distribute the audiovisual  
          signal and accept wagers on the results of out-of-country  
          Thoroughbred races during the calendar period the association or  
          fair is conducting a race meeting under specified conditions.

           
          Analysis Prepared by  :    Eric Johnson/ G. O. / (916) 319-2531 

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