BILL NUMBER: SB 1072 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 30, 2010
AMENDED IN ASSEMBLY AUGUST 20, 2010
AMENDED IN ASSEMBLY AUGUST 16, 2010
AMENDED IN ASSEMBLY AUGUST 2, 2010
INTRODUCED BY Senator Calderon
( Principal coauthor: Assembly Member
John A. Perez )
FEBRUARY 17, 2010
An act to amend Section 19605.73 of, and to add Section
19642.1 to, the Business and Professions Code, relating to horse
racing. An act to amend Section 19605.73 of, to add
Sections 19601.02, 19605.74, and 19642.1 to, and to add Article 9.1
(commencing with Section 19604.5) to Chapter 4 of Division 8 of, the
Business and Professions Code, relating to horse racing.
LEGISLATIVE COUNSEL'S DIGEST
SB 1072, as amended, Calderon. Horse racing: statewide marketing
organization. organization: Breeders' Cup
promotion: wagering deduction: exchange wagering.
(1) Existing law authorizes a thoroughbred association or fair,
subject to approval by the California Horse Racing Board, to deduct
from the parimutuel pool for any type of wager, a specified
percentage for the meeting of the thoroughbred association or fair
that accepts the wager.
This bill would require every thoroughbred association or fair
that conducts a live race meeting to deduct an additional 2% of the
total amount handled on exotic wagers requiring the selection of 2
wagering interests, and 3% on exotic wagers requiring the selection
of 3 or more wagering interests. The bill would require that these
funds be distributed into the purse account of the meet conducting
racing in the zones in which the wager was placed, to be used to
augment overnight purses.
This bill would require any thoroughbred racing association or
fair that authorizes betting systems located outside of this state to
accept wagers on a race to retain from the total amount received
from the out-of-state betting system, less certain specified
deductions made pursuant to existing law, the incremental amount
received as a result of the 2% or 3% takeout on exotic wagers
required by this bill, for distribution as overnight purses. This
bill would require that the method utilized to determine the
incremental amount received as a result of the takeout increase be
established by agreement between the various affected thoroughbred
racing associations and fairs, and horsemen's organizations. If these
groups are unable to agree as to the method of determining the
incremental amount received, this bill would require the board to
determine the allocation method after holding a hearing.
For a thoroughbred association hosting the Breeders' Cup
Championship series, this bill would require the amounts collected
pursuant to the above provisions requiring that 2% or 3% be deducted
from the amount handled on exotic wagers be set aside for the purpose
of promoting and sponsoring the Breeders' Cup. The bill would
require the thoroughbred racing association hosting the Breeders' Cup
to enter into an agreement with the organization that operates the
Breeders' Cup regarding the expenditure of the funds, as provided,
and would require a written report be made to the board regarding how
the funds were utilized.
(2) Existing law provides that the California Horse Racing Board
shall have all powers necessary to carry out the purposes of the
Horse Racing Law, such as adopting rules and regulations to protect
the public, allocating dates for and controlling horse racing and
parimutuel wagering, and enforcing all rules and regulations.
This bill would authorize exchange wagering, defined by the bill
as a form of parimutuel wagering in which 2 or more persons place
identically opposing wagers in a given market, provided that the
entity offering exchange wagering is licensed by the board and has
entered into an exchange wagering agreement between the licensee, the
applicable racing association or fair conducting live racing, and
the horsemen's organization responsible for negotiated purse
agreements for the breed on which exchange wagers are accepted, as
provided.
The bill would invest the board with the full power to prescribe
rules, regulations, and conditions under which exchange wagering may
be conducted in California, except that the bill would require the
board to develop rules that prohibit certain persons associated with
an entrant in a particular race from placing an exchange wager on a
race involving that entrant, that prohibit the placing of exchange
wagers on previously run races, that require the exchange wagering
licensee to provide information to the person placing the wager, that
prohibit the use of automatic or quick picks to place an exchange
wager, and that prohibit the displaying of the results of a wager
using casino themes, as provided.
The bill would allow the board to recover any costs associated
with the licensing and regulation of exchange wagering by imposing an
assessment on the licensee. The bill would require that these funds
be deposited in the Horse Racing Fund, to be available upon
appropriation by the Legislature for the sole purpose of regulating
exchange wagering.
The bill would prohibit the taking of exchange wagers by an
exchange wagering licensee prior to May 1, 2012.
(3) Existing law provides that unclaimed refunds from horse racing
are to be distributed to an organization that is responsible for
negotiating business agreements on behalf of horsemen, to be held in
trust for the purpose of negotiating an agreement with a jockeys'
organization to provide health and welfare benefits to California
licensed jockeys. Existing law requires that the funds held in trust
shall not exceed $450,000.
Pursuant to the above provision, this bill would require each
exchange wagering licensee to annually distribute the greater of
$100,000, or an amount equal to 0.001 multiplied by the total amount
of exchange revenue collected by the licensee in that year to be used
for the purposes specified above.
(1)
(4) Existing law permits racing associations, fairs,
and the organization responsible for contracting with racing
associations and fairs with respect to the conduct of racing
meetings, to form a private, statewide marketing organization to
market and promote thoroughbred and fair horse racing, and to obtain,
provide, or defray the cost of workers' compensation coverage for
stable employees and jockeys of thoroughbred trainers. Existing law
requires the marketing organization to annually submit to the
California Horse Racing Board a statewide marketing and promotion
plan and a thoroughbred trainers' workers' compensation defrayal plan
for thoroughbred and fair horse racing. Existing law requires
0.4% of the amount handled by each satellite wagering facility
is required to be distributed to the marketing
organization for the promotion of thoroughbred and fair horse racing,
and to defray the cost of workers' compensation insurance, as
specified. Existing law repeals these provisions on January 1, 2011.
This bill would extend the operation of these provisions until
January 1, 2014, when they would be repealed. The bill would specify
that its provisions allowing for the formation of a private statewide
marketing association applies apply to
thoroughbred racing associations, fairs, and the organization for
contracting with thoroughbred racing associations and fairs with
respect to the conduct of racing meetings. The bill would specify
that the marketing and promotion activities that the marketing
organization may engage in includes, but is
include, but are not limited to, the establishment and
maintenance of an Internet Web site, players incentive programs, and
the funding of promotional activities at satellite wagering
facilities.
This bill would change the amount to be distributed to the
marketing organization for the promotion of thoroughbred and fair
racing from an amount equal to 0.4% of the amount handled at each
satellite wagering facility to an amount not to exceed 0.25%, and
would delete the provision allowing for the funds to be used to
defray the cost of workers' compensation coverage for stable
employees and jockeys of thoroughbred trainers. The bill would
require that the initial distribution be 0.2% of the total amount
handled by satellite wagering facilities for thoroughbred and fair
meetings only and would allow the board to adjust this amount to an
aggregate of 0.25% of the total amount handled by satellite wagering
facilities for thoroughbred and fair meetings only.
The bill would, with respect to the statewide marketing and
promotion plan, instead require the marketing organization, by
November 1 of each year, to submit a written report to the board on
the statewide marketing and promotion plan for the upcoming calendar
year, and would additionally require the marketing organization to
annually present to the board at the board's November meeting a
verbal report on the statewide marketing and promotion plan for the
upcoming calendar year. The bill would delete the requirement that
the marketing organization submit to the board a thoroughbred
trainers' workers workers' compensation
and defrayal plan. The bill would also require the marketing
organization to quarterly submit to the board a written report that
accounts for all receipts and expenditures of the promotion funds for
the previous 3 months.
(2)
(5) Existing law authorizes the board, in performing
its responsibilities, to participate in the affairs of associations
having as their purpose the interchange of information relating to
racing law enforcement, the licensing of horse racing participants,
the registration of race horses, the tabulation, analysis, and
publication of statistical information based on parimutuel handles
and the distribution of proceeds, and to conduct research regarding
horse racing accidents, and the detection of drugs on race horses,
among other things.
This bill would provide that, in addition to certain specified
distributions, an amount not to exceed 0.05% of the total amount
handled by each satellite wagering facility shall be distributed to a
nonprofit organization designated by the board for the purposes of
maintaining a database of horse racing information to further the
purposes of the above provision. The bill would state that the amount
distributable to the nonprofit organization shall initially be
0.05% of the total amount handled by each satellite wagering facility
and may be adjusted by the board, in its discretion. The bill
would require the nonprofit organization to submit an annual budget
and file quarterly financial statements with the board.
By imposing new requirements under the Horse Racing Law, the
violation of which would be a crime, this bill would create new
crimes and would thereby impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares
all of the following:
(1) The Breeders' Cup Championship series of races is the
preeminent series of horse races recognized throughout the world.
(2) From the inaugural running in Hollywood Park 26 years ago, the
Breeders' Cup has a rich and vibrant tradition in California, having
been run here eight times.
(3) The Breeders' Cup Championship races have, for 2008 and 2009,
been held in California and have been an outstanding success,
bringing significant revenue and tourism to the State of California.
(4) In 2009, the Breeders' Cup was held at Santa Anita racetrack
located in Los Angeles County, where it was attended by over 96,000
fans and telecast to over 130 countries.
(5) The Los Angeles Economic Development Commission, having
studied the impact of the Breeders' Cup Championship series being
held in California the last two years, has concluded that the events
have brought an additional $60,000,000 in economic impact to the
State of California and Los Angeles region each year, through added
tourism and other economic impact, and created over 500 direct and
indirect jobs.
(6) The Legislature and the Governor of California recognize the
importance of the horse racing industry to this state, including the
50,000 jobs associated with the industry, and have taken significant
steps to support the industry, evidenced most recently by the
$40,000,000 in license fee relief provided in 2009.
(7) An additional concern is that horse owners are not bringing
their horses to California because of prevailing lower purses and
horses are leaving the state in order to compete for higher purses
offered in other states.
(8) California has one of the lowest takeouts on conventional win,
place, and show wagering, and the takeout on exotic wagering
proposed in this bill will be lower than that prevailing in some of
the most prominent racing jurisdictions.
(b) It is therefore the intent of the Legislature to encourage the
organization operating the Breeders' Cup Championship series to make
California the permanent home of the Breeders' Cup Championship
series, and it is the intent of the Legislature, through the
enactment of this act, to provide substantial support towards that
end.
(c) It is also the intent of the Legislature to make it more
advantageous for horses to compete in California racing by increasing
the amount of funds available for purses. The increased purses will
result in a higher caliber of racing with larger and more competitive
fields, which, in turn, will improve the attractiveness of
California's racing product and generate additional funds for
reinvestment in the industry.
SEC. 2. Section 19601.02 is added to the
Business and Professions Code , to read:
19601.02. (a) Notwithstanding Section 19610, every thoroughbred
association or fair that conducts a live race meeting shall deduct an
additional 2 percent of the total amount handled on exotic wagers
requiring the selection of two wagering interests, and 3 percent of
the total amount handled on exotic wagers requiring the selection of
three or more wagering interests.
(b) The funds collected pursuant to subdivision (a) from wagers
placed within the inclosure of a thoroughbred association or fair
conducting a race meeting, at satellite locations within this state,
and from account wagers originating within this state, shall be
distributed to the purse account of the meet conducting racing in the
zone in which the wager was placed, and distributed in accordance
with subdivision (d).
(c) Any thoroughbred racing association or fair, when it
authorizes betting systems located outside this state to accept
wagers on a race, shall retain from the total amount received by the
association or fair from the out-of-state betting system, the
incremental amount received as a result of the takeout specified in
subdivision (a) for distribution as overnight purses in accordance
with subdivision (d) without regard to the provisions of paragraph
(1) of subdivision (b) of Section 19602. The method utilized to
determine the incremental amount received as a result of the takeout
increase specified in subdivision (a) shall be established by
agreement between the various affected thoroughbred racing
associations and fairs and the applicable horsemen's organization.
Should the thoroughbred racing association or fair and the applicable
horsemen's organization be unable to reach an agreement as to the
method of making such determination, the board shall determine the
appropriate allocation method after a hearing on the matter.
(d) The amounts collected pursuant to subdivisions (b) and (c)
shall be utilized solely to augment and not supplant overnight
purses. Within 90 days after the conclusion of a given meet, the
thoroughbred association or fair receiving funds pursuant to
subdivisions (b) and (c) shall report to the board the manner in
which the funds were used to augment and not supplant overnight
purses at that meet.
(e) The board shall have the authority to postpone or revoke the
implementation of the takeout increase specified in subdivision (a)
if the board determines that the incremental amount that results from
the negotiations with the out-of-state betting systems is
incrementally insufficient.
SEC. 3. Sections 4 and 5 of this act shall be
known and may be cited as the Exchange Wagering Act.
SEC. 4. The Legislature finds and declares all of
the following:
(a) The horse racing industry is economically important to
California, and the general welfare of the people of California will
be promoted by the advancement of horse racing and related projects
and facilities in California.
(b) It is the intent of the Legislature, by authorizing exchange
wagering in California, to promote the economic future of the horse
racing industry in California, and to foster the potential for
increased commerce, employment, and recreational opportunities in
California.
(c) The Legislature has determined that the California Horse
Racing Board is best suited to oversee, license, and regulate
exchange wagering in California.
SEC. 5. Article 9.1 (commencing with Section
19604.5) is added to Chapter 4 of Division 8 of the
Business and Professions Code , to read:
Article 9.1. Exchange Wagering
19604.5. (a) As used in this section, the following definitions
apply:
(1) "Back" means to wager on a selected outcome occurring in a
given market.
(2) "Board" means the California Horse Racing Board.
(3) "Corrective wager" means an exchange wager placed by the
exchange wagering licensee in a given market, under circumstances
approved by the board, in order to address the impact on that market
of the cancellation or voiding of a given matched wager or a given
part of a matched wager.
(4) "Exchange" means a system operated by an exchange wagering
licensee in which the exchange wagering licensee maintains one or
more markets in which persons may back or lay a selected outcome.
(5) "Exchange revenues" means all charges, fees, income, payments,
revenues, and deductions of any kind assessed or collected by, or
paid or delivered to, an exchange wagering licensee in connection
with the submission of any exchange wagers to the exchange wagering
licensee by residents of California and residents of jurisdictions
outside of California on the results of horse races conducted in
California, and by residents of California on the results of horse
races conducted outside of California.
(6) "Exchange wagers" means wagers submitted to an exchange
wagering licensee to be posted in a market on an exchange.
(7) "Exchange wagering" means a form of parimutuel wagering in
which two or more persons place identically opposing wagers in a
given market.
(8) "Exchange wagering account" means the account established with
an exchange wagering licensee by a person participating in exchange
wagering. An exchange wagering account may only be established or
maintained with an exchange wagering licensee by a natural person.
(9) "Exchange wagering agreement" means a written agreement by and
among the applicable exchange wagering licensee, the applicable
racing association or racing fair conducting live racing in this
state, and the horsemen's organization responsible for negotiating
purse agreements for the breed on which exchange wagers are accepted,
provided that the terms and conditions for the permitted use of
signal by the exchange wagering licensee, and the compensation to the
applicable racing association or racing fair and the horsemen's
organization, include provisions for, but are not limited to all of
the following:
(A) Calculation of any and all amounts earned and payable to the
applicable racing association or racing fair and horsemen's
organization.
(B) Audit rights and conditions.
(C) Duration terms.
(D) Contractual remedies.
(10) "Exchange wagering licensee" means a person located within or
outside of California that is authorized to offer exchange wagering
to residents of California pursuant to this section.
(11) "Identically opposing wagers" means wagers in which one or
more persons offer to lay a selected outcome at the same price at
which one or more persons offer to back that same outcome, with the
amount subject to the lay being proportionately commensurate to the
amount subject to the back.
(12) "Lay" means to wager on a selected outcome not occurring in a
given market.
(13) "Market" means, in relation to a given horse race or a given
set of horse races, a particular outcome that is subject to exchange
wagering as determined by an exchange wagering licensee.
(14) "Matched wager" means the wager that is formed when two or
more persons are confirmed by the exchange operator as having placed
identically opposing wagers in a given market on the exchange.
(15) "Net winnings" means the aggregate amounts payable to a
person as a result of that person's winning matched wagers in a pool
less the aggregate amount paid by that person as a result of that
person's losing matched wagers in that pool.
(16) "Parimutuel" means any system whereby wagers with respect to
the outcome of a horse race are placed with, or in, a wagering pool
conducted by an authorized person, and in which the participants are
wagering with each other and not against the person conducting the
wagering pool.
(17) "Person" means any individual, partnership, corporation,
limited liability company, or other association or organization.
(18) "Pool" means the total of all matched wagers in a given
market.
(19) "Price" means the odds for a given exchange wager.
(20) "Unmatched wager" means a wager or portion of a wager placed
in a given market within an exchange that does not become part of a
matched wager because there are not one or more available exchange
wagers in that market with which to form one or more identically
opposing wagers.
(21) "Zone" has the same meaning as defined in Section 19530.5, as
modified by the provisions of subdivision (f) of Section 19601,
except that for the purposes of this act the combined central and
southern zones shall be considered one "central/southern" zone.
(b) Notwithstanding any other law, rule, or regulation, exchange
wagering by residents of California and residents of jurisdictions
outside of California on the results of horse races conducted in
California, and by residents of California on the results of horse
races conducted outside of California, shall be lawful provided that
all of the following apply:
(1) Exchange wagering shall only be conducted by an exchange
wagering licensee pursuant to a valid exchange wagering license
issued by the board.
(2) No exchange wagering licensee shall accept exchange wagers on
races conducted in California from a resident of California or a
resident of a jurisdiction outside California, or conducted outside
California from a resident of California, unless an exchange wagering
agreement exists allowing these wagers.
(3) Exchange wagering shall be conducted pursuant to and in
compliance with the provisions of the Interstate Horseracing Act of
1978 (15 U.S.C. Sec. 3001 et seq.), as amended, this section, all
applicable federal laws, and rules and regulations promulgated by the
board pursuant to this section.
(4) An exchange wagering licensee may only offer exchange wagering
on thoroughbred horse races, whether these thoroughbred races are
conducted within or outside of this state, to persons whose primary
residence address is in the northern zone of this state if it has an
exchange wagering agreement with (A) the racing association or racing
fair located in the northern zone authorized by the board to conduct
a live thoroughbred racing meeting in accordance with the provisions
of Article 4 (commencing with Section 19480) at that time, or during
the calendar period, when the exchange wagering licensee is offering
exchange wagering to persons whose primary residence is in the
northern zone of this state, and (B) the horsemen's organization
responsible for negotiating purse agreements for a live thoroughbred
racing meeting.
(5) An exchange wagering licensee may only offer exchange wagering
on thoroughbred horse races, whether these thoroughbred races are
conducted within or outside of this state, to persons whose primary
residence address is in the central/southern zone of this state if it
has an exchange wagering agreement with (A) the racing association
or racing fair located in the central/southern zone authorized by the
board to conduct a live thoroughbred racing meeting in accordance
with the provisions of Article 4 (commencing with Section 19480) at
that time, or during the calendar period, when the exchange wagering
licensee is offering exchange wagering to persons whose primary
residence is in the central/southern zone of this state, and (B) the
horsemen's organization responsible for negotiating purse agreements
for a live thoroughbred racing meeting.
(6) An exchange wagering licensee may only offer exchange wagering
on quarter horse races, whether these quarter horse races are
conducted within or outside of this state, to persons whose primary
residence address is in this state if it has an exchange wagering
agreement with (A) the racing association or racing fair located in
the state authorized by the board to conduct a live quarter horse
racing meeting in accordance with the provisions of Article 4
(commencing with Section 19480) at that time, or during the calendar
period, when the exchange wagering licensee is offering exchange
wagering to persons whose primary residence is this state, and (B)
the horsemen's organization responsible for negotiating purse
agreements for the live quarter horse racing meeting.
(7) An exchange wagering licensee may only offer exchange wagering
on standardbred horse races, whether these standardbred horse races
are conducted within or outside of this state, to persons whose
primary residence address is in this state if it has an exchange
wagering agreement with (A) the racing association or racing fair
located in the state authorized by the board to conduct a live
standardbred racing meeting in accordance with the provisions of
Article 4 (commencing with Section 19480) at that time, or during the
calendar period, when the exchange wagering licensee is offering
exchange wagering to persons whose primary residence is this state,
and (B) the horsemen's organization responsible for negotiating purse
agreements for the live standardbred racing meeting.
(8) Exchange wagers are submitted to, and accepted by, an exchange
wagering licensee in person, by direct telephone call, or by
communication through other electronic media.
(c) A person shall not be permitted to open an exchange wagering
account, or place an exchange wager, except in accordance with
federal law, this section, and rules and regulations promulgated by
the board. Only natural persons with valid exchange wagering accounts
may place wagers through an exchange. To establish an exchange
wagering account, a person shall be at least 18 years of age and a
resident of California or of another jurisdiction within which the
placement of exchange wagers would not be unlawful under United
States federal law or the law of that jurisdiction.
(d) The board shall approve, as part of the exchange wagering
licensee's application for an exchange wagering license, security
policies and safeguards to ensure player protection and integrity,
including, but not limited to, provisions governing the acceptance of
electronic applications for persons establishing exchange wagering
accounts, location and age verification confirmation for persons
establishing exchange wagering accounts, the use of identifying
factors to ensure security of individual accounts, and the
requirements for management of funds in exchange wagering accounts.
An exchange wagering licensee may not accept a wager, or series of
wagers, if the results of the wager or wagers would create a
liability for the exchange wagering account holder that is in excess
of the funds on deposit in the exchange wagering account of that
holder.
(e) Notwithstanding any other law, rule, or regulation:
(1) The board shall have full power to prescribe rules,
regulations, and conditions under which exchange wagering may be
conducted in California consistent with this section, including the
manner in which exchange wagers may be accepted and the requirements
for any person to participate in exchange wagering.
(2) Prior to the board promulgating rules, regulations, and
conditions under which exchange wagering may be conducted in
California, the board shall consider studies or comments submitted by
interested parties on the impact of exchange wagering on parimutuel
betting and the economics of the California horse racing industry to
assist the board in developing rules, regulations, and conditions for
exchange wagering that are in the best interest of the public and
the California horse racing industry. The board may set a time frame
for comments and studies to be submitted by interested parties and
for the board to consider the studies and comments so as to allow
sufficient time, in the discretion of the board, to allow for the
promulgation of rules, regulations, and conditions for exchange
wagering and the issuance of licenses for exchange wagering prior to
May 1, 2012.
(3) Notwithstanding paragraph (1), the board shall adopt the
following rules:
(A) An owner, authorized agent, trainer, jockey, jockey's agent,
driver, or stable employee shall not place an exchange wager to lay
any entrant in a horse race that is owned in whole or part by that
owner or the owner represented by that authorized agent, trained by
that trainer or stable employee, ridden by that jockey or the jockey
represented by that jockey's agent, or driven by that driver.
(B) No exchange wagers shall be placed on a market after the
conclusion of a live race. Exchange wagering on previously run races
is prohibited.
(C) The exchange wagering licensee shall provide a person with
information on the race, including the track where the race will take
place and the names of the participating horses before the person
may place an exchange wager.
(D) The exchange wagering licensee shall require the person making
the exchange wager to select the specific race and horse for the
wager. The use of automatic, quick-pick, or similar features to aid
in the placing of a wager shall be prohibited.
(E) The results of a wager shall not be displayed through the use
of video or mechanical reels or other slot machine or casino game
themes, including, but not limited to, dice games, wheel games, card
games, and lotto.
(4) The board shall have full power to prescribe rules,
regulations, and conditions under which all exchange wagering
licenses are issued or renewed in California, including requiring an
annual audit of the exchange wagering licensee's books and records
pertaining to exchange wagering, and to revoke, suspend, or refuse to
renew a license pursuant to the authority granted to the board in
this chapter.
(5) The board may reasonably require licensure or registration of
officers or directors of any exchange wagering licensee.
(6) The board may recover any costs associated with the licensing
or regulation of exchange wagering from the exchange wagering
licensee by imposing an assessment on the exchange wagering licensee
in an amount that does not exceed the reasonable costs associated
with the licensing or regulation of exchange wagering. Funds received
pursuant to this subdivision shall be deposited in the Horse Racing
Fund, to be available upon appropriation by the Legislature for the
sole purpose of regulating exchange wagering.
(f) (1) The board shall not approve an application for an original
or renewal license as an exchange wagering licensee unless the
entity, if requested in writing by a bona fide labor organization no
later than 90 days prior to licensing, has entered into a contractual
agreement with that labor organization that provides all of the
following:
(A) The labor organization has historically represented employees
who accept or process any form of wagering at the nearest horse
racing meeting located in California.
(B) The agreement establishes the method by which the exchange
wagering licensee will agree to recognize and bargain in good faith
with a labor organization which has demonstrated majority status by
submitting authorization cards signed by those employees who accept
or process any form of wagering for which a California exchange
wagering license is required.
(C) The agreement requires the exchange wagering licensee to
maintain its neutrality concerning the choice of those employees who
accept or process any form of wagering for which a California
exchange wagering license is required and whether or not to authorize
the labor organization to represent them with regard to wages,
hours, and other terms and conditions of employment.
(D) The agreement applies to those classifications of employees
who accept or process wagers for which a California exchange wagering
license is required whether the facility is located within or
outside of California.
(2) (A) The agreement required by paragraph (1) shall not be
conditioned by either party upon the other party agreeing to matters
outside the requirements of paragraph (1).
(B) The requirement in paragraph (1) shall not apply to an
exchange wagering licensee which has entered into a collective
bargaining agreement with a bona fide labor organization that is the
exclusive bargaining representative of employees who accept or
process parimutuel wagers on races for which an exchange wagering
license is required, whether the facility is located within or
outside of California.
(3) Permanent state or county employees and nonprofit
organizations that have historically performed certain services at
county, state, or district fairs may continue to provide those
services.
(4) Parimutuel clerks employed by racing associations or fairs or
employees of exchange wagering licensees who accept or process any
form of wagers who are laid off due to lack of work shall have
preferential hiring rights for new positions with their employer in
occupations whose duties include accepting or processing any form of
wagers, or the operation, repair, service, or maintenance of
equipment that accepts or processes any form of wagering at a
racetrack, satellite wagering facility, or exchange wagering licensee
licensed by the board. The preferential hiring rights established by
this paragraph shall be conditioned upon the employee meeting the
minimum qualification requirements of the new job.
(g) Notwithstanding any other law, rule, or regulation, an
exchange wagering licensee shall not be required to include any pools
of exchange wagers in the wagering pools at the racing association
or racing fair conducting the races, nor shall an exchange wagering
licensee be required to retain, withhold, or take out any amounts
from any exchange wagers, except as expressly set forth in the
applicable exchange wagering agreement.
(h) Subject to the approval of the board, an exchange wagering
licensee shall be permitted to collect exchange revenues in the
manner and amounts determined by the exchange wagering licensee,
including, but not limited to, assessing a surcharge on any person's
net winnings.
(i) Notwithstanding any other law, rule, or regulation, the board
shall require all of the following:
(1) Each exchange wagering licensee shall distribute all moneys in
each pool, net of any fees, charges, or deductions of any kind
assessed or collected by the exchange wagering licensee in connection
with matched wagers in that pool, at the conclusion of the race or
races associated with that pool.
(2) Each exchange wagering licensee shall distribute the portions
of the exchange wagering licensee's exchange revenues as may be
required pursuant to the exchange wagering agreement pursuant to
paragraphs (2) to (7), inclusive, of subdivision (b).
(3) Fifty percent of the amounts received by a racing association
or racing fair from exchange wagering shall be paid to horsemen
participating in the meetings conducted by that racing association or
racing fair in the form of purses. The allocation of amounts
received by a racing association or racing fair from exchange
wagering between that racing association or racing fair and the
horsemen participating in the meetings conducted by that racing
association or racing fair may be modified by a written agreement
between those entities.
(4) In addition to payments set forth in paragraphs (1) and (2),
each exchange wagering licensee shall distribute, on an annual basis,
an amount equal to the greater of (A) one hundred thousand dollars
($100,000), or (B) an amount equal to 0.001 multiplied by the total
amount of exchange revenues collected by the exchange wagering
licensee in that calendar year. The distribution shall be made at the
direction of the board pursuant to Section 19612.9. This paragraph
shall become inoperative on January 1, 2021, and, as of that date, is
repealed, unless a later enacted statute that is enacted before
January 1, 2021, deletes or extends that date.
(j) An exchange wagering licensee may cancel or allow to be
canceled any unmatched wagers, without cause, at any time.
(k) The board may prescribe rules governing when an exchange
wagering licensee may cancel or void a matched wager or part of a
matched wager, and the actions which an exchange wagering licensee
may take when all or part of a matched wager is canceled or voided.
The rules may include, but are not limited to, permitting the
exchange wagering licensee to place corrective wagers under
circumstances approved in the rules adopted by the board. Exchange
wagers placed on a market after the start of a race shall be lawful
if authorized by the board, racing association, or racing fair
conducting the races, and the horsemen's organization responsible for
negotiating purse agreements for the breed on which the exchange
wager is made.
(l) The provisions of this section shall be deemed to be
severable, and if any phrase, clause, sentence, or provision of this
section is declared to be unconstitutional or the applicability
thereof to any person is held invalid, the remainder of this section
shall not thereby be deemed to be unconstitutional or invalid.
(m) The board shall promulgate administrative rules and
regulations to effectuate the purposes of this section.
(n) No exchange wagering licensee may accept exchange wagers
pursuant to this section prior to May 1, 2012.
SECTION 1. SEC. 6. Section 19605.73
of the Business and Professions Code is amended to read:
19605.73. (a) Thoroughbred racing associations, fairs, and the
organization responsible for contracting with thoroughbred racing
associations and fairs with respect to the conduct of racing
meetings, may form a private, statewide marketing organization to
market and promote thoroughbred and fair horse racing, including, but
not limited to, establishment and maintenance of an Internet Web
site featuring California thoroughbred and fair racing, the
establishment and administration of players incentive programs for
those who wager on thoroughbred association and fair races, and
promotional activities at satellite wagering facilities to increase
their attendance and handle. While the promotional activities at
satellite wagering facilities shall be funded by the marketing
organization, they shall be implemented and coordinated by
representatives of the satellite wagering facilities and the
thoroughbred racing associations or fair then conducting a live race
meet. The organization shall consist of the following members: two
members, one from the northern zone and one from the combined central
and southern zones, appointed by the thoroughbred racetracks; two
members, one from the northern zone and one from the combined central
and southern zones, appointed by the owners' organization
responsible for contracting with associations and fairs with respect
to the conduct of racing meetings; and two members, one from the
northern zone and one from the combined central and southern zones,
appointed by the organization representing racing and satellite
fairs.
(b) The marketing organization formed pursuant to subdivision (a)
shall, by November 1 of each year, submit a written report to the
board on a statewide marketing and promotion plan for the upcoming
calendar year. In addition, the organization shall annually present
to the board at the board's November meeting a verbal report on the
statewide marketing and promotion plan for the upcoming calendar
year. The plan shall be implemented as determined by the
organization. The organization shall receive input from all
interested industry participants and may utilize outside consultants.
(c) In addition to the distributions specified in subdivisions (a)
and (b) of Section 19605.7, subdivisions (a) and (b) of Section
19605.71, and Section 19605.72, for thoroughbred and fair meetings
only, from the amount that would normally be available for
commissions and purses, an amount not to exceed 0.25 percent of the
total amount handled by each satellite wagering facility shall be
distributed to the marketing organization formed pursuant to
subdivision (a) for the purposes set forth therein. The amounts
initially distributed to the marketing organization formed pursuant
to subdivision (a) shall be 0.2 percent of the total amount handled
by satellite wagering facilities for thoroughbred and fair meetings
only. The amount distributable to the marketing organization may be
adjusted by the board, in its discretion. However, the adjusted
amounts may not exceed an aggregate of 0.25 percent of the total
amount handled by satellite wagering facilities for thoroughbred and
fair meetings only. Any of the promotion funds that are not expended
in the year in which they are collected may be expended in the
following year. If promotion funds expended in any one year exceed
the amount collected for that year, the funds expended in the
following year shall be reduced by the excess amount. Any of the
promotion funds that are not expended in the year in which they are
collected may be expended in the following year. If promotion funds
expended in any one year exceed the amount collected for that year,
the funds expended in the following year shall be reduced by the
excess amount. The marketing organization, on a quarterly basis,
shall submit to the board a written report that accounts for all
receipts and expenditures of the promotion funds for the previous
three months.
(d) This section shall remain in effect only until January 1,
2014, and, as of that date, is repealed, unless a later enacted
statute that is enacted before January 1, 2014, deletes or extends
that date. Any moneys held by the organization shall, in the event
this section is repealed, be distributed to the organization formed
pursuant to Section 19608.2, for purposes of that section.
SEC. 7. Section 19605.74 is added to the
Business and Professions Code , to read:
19605.74. For every year that the organization operating the
Breeders' Cup Championship series chooses to conduct the Breeders'
Cup at a race meeting in California, the following, notwithstanding
any other provision of law, shall apply to the race meeting
conducting the Breeders' Cup races on days during which Breeders' Cup
races are conducted:
(a) The amounts that would have otherwise been distributed to a
purse account pursuant to subdivisions (a), (b), (c), and (d) of
Section 19601.02 shall be made available for the purpose of promoting
and sponsoring the Breeders' Cup.
(b) The thoroughbred racing association hosting the Breeders' Cup
shall enter into a written agreement, in consultation and cooperation
with the California Tourism Commission and the statewide marketing
organization formed pursuant to Section 19605.73, with the
organization that operates the Breeders' Cup regarding the manner in
which the funds set-aside to support and promote the Breeders' Cup
are to be expended.
(c) Within 90 days after the holding of each Breeders' Cup, a
written report shall be made to the board detailing the manner in
which the set aside funds were utilized to promote and support the
Breeders' Cup.
SEC. 2. SEC. 8. Section 19642.1 is
added to the Business and Professions Code, to read:
19642.1. In addition to the distributions specified in Sections
19605.7, 19605.71, and 19605.72, from the amounts that would normally
be available for commissions and purses from wagering on all breeds,
an amount not to exceed 0.05 percent of the total amount handled by
each satellite wagering facility shall be distributed to the
nonprofit organization designated by the board for purposes of
maintaining a database of horseracing information to further the
purposes of Section 19444. The amount distributable to the nonprofit
organization initially shall be 0.05 percent of the total amount
handled by each satellite wagering facility and may be
adjusted by the board, in its discretion. The nonprofit organization
shall annually submit its budget for the ensuing calendar year to the
board at its November meeting and shall file quarterly financial
statements with the board.
SEC. 9. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.