BILL ANALYSIS AB 2790 Page 1 ASSEMBLY THIRD READING AB 2790 (Committee on Governmental Organization) As Introduced March 17, 2010 Majority vote GOVERNMENTAL ORGANIZATION 19-0 ----------------------------------------------------------------- |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 Page 2 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 AB 2790 Page 3 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) AB 2790 Page 4 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 FN: 0004240