BILL ANALYSIS Bill No: SB 1072 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Roderick D. Wright, Chair 2009-2010 Regular Session Staff Analysis SB 1072 Author: Calderon As Amended: August 30, 2010 Hearing Date: August 31, 2010 Consultant: Arthur Terzakis SUBJECT Horse Racing Law DESCRIPTION SB 1072 makes the following substantive changes and additions to California's Horse Racing Law: (1) requires thoroughbred racing associations and fairs to deduct an additional amount of the total handle on exotic wagering (e.g., exacta, trifecta, superfecta) for purse augmentation; (2) authorizes the California Horse Racing Board (CHRB) to license entities to operate "exchange wagering" systems, as defined, that accept exchange wagers from individuals residing either within or outside of this state on horse races run in California or other states and makes it explicit that exchange wagering shall not become operative until May 1, 2012 ; (3) requires each exchange wagering licensee to annually distribute a specified amount of exchange wagering revenue to the existing jockey health and benefit welfare fund; (4) authorizes the thoroughbred racing industry to use monies from horse racing wagering pools to promote the Breeders' Cup, in order that California might be considered the permanent home of this championship series of races; (5) extends the sunset, from January 1, 2011 to January 1, 2014, on provisions that authorize racing associations and fairs that conduct thoroughbred racing to pay to the owners' organization a certain portion of the purses for a statewide marketing program, as specified, to increase interest in horse racing; and (6) provides that an amount not to exceed 0.05% SB 1072 (Calderon) continued Page 2 of the total amount handled by each satellite wagering facility shall be distributed to the nonprofit organization designated by the CHRB for the purpose of maintaining a database of horse racing information, as defined. Specifically, this measure: 1. Makes various legislative findings relative to the economic importance of the Breeders' Cup Championship series and declares that it is not only the desire of the Legislature to encourage the organization operating this prestigious international event to make California its permanent home but also the intent of the Legislature to provide substantial support towards that endeavor. 2. Also, makes additional findings and declarations relative to the fact that California has one of the lowest "takeouts" on wagering and concern that horse owners are not bringing their horses to California because of lower purses and horses are leaving the state in order to compete for higher purses. 3. Provides that every thoroughbred racing association or fair that conducts a live race meet shall deduct an additional 2% of the total amount handled on exotic wagers requiring the selection of two wagering interests (e.g., exactas, quinellas) and 3% of the total amount handled on exotic wagers requiring the selection of three or more wagering interests (e.g., trifectas, superfectas). (The additional takeout is intended to augment purses.) 4. Provides that any thoroughbred association or fair that authorizes betting systems located outside of this state to accept wagers on a race shall retain from the total amount received from the out-of-state betting system, less certain deductions made pursuant to existing provisions of law, the incremental amount received as a result of the 2% or 3% takeout referenced above on exotic wagers required by this measure, for distribution as overnight purses. 5. Grants the CHRB the authority to postpone or revoke implementation of the takeout increase, as specified. 6. Adds a new Article (Article 9.1) to the Horse Racing Law authorizing "exchange wagering" and declares that the SB 1072 (Calderon) continued Page 3 Legislature has determined that the CHRB is best suited to oversee, license, and regulate exchange wagering in California. Also, declares legislative intent to promote the economic future of the horse racing industry in California and to foster the potential for increased commerce, employment and recreational opportunities by authorizing exchange wagering. 7. Defines a host of new terms, as specified, for purposes of exchange wagering including the term "exchange wagering" which means a form of parimutuel wagering in which two or more persons place identically opposing wagers in a given market. 8. Stipulates that exchange wagering shall only be conducted by an exchange wagering licensee pursuant to a valid exchange wagering license issued by the CHRB. Also, provides that no exchange wagering licensee may accept wagers prior to 05/01/2012. 9. Makes it explicit that 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, as defined, exists allowing such wagers. Additionally, exchange wagering must be conducted pursuant to and in compliance with the federal Interstate Horseracing Act of 1978. 10. Defines "exchange wagering agreement" to mean 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 certain specified provisions. 11. Requires the CHRB to promulgate rules and regulations governing the conditions under which exchange wagering may be conducted, including requiring an annual audit of an exchange wagering licensee. Also, would allow exchange SB 1072 (Calderon) continued Page 4 wagers to be submitted and accepted by licensed exchange wagering systems in the same manner as is currently provided for Advanced Deposit Wagers (e.g., in person, telephone, or Internet). 12. Requires the CHRB, prior to promulgating rules and regulations under which exchange wagering may be conducted, to consider studies or comments submitted by interested parties on the impact of exchange wagering on parimutuel wagering and the economics of the State's 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 industry. 13. Provides that only persons 18 years of age or older could establish exchange wagering accounts and requires the CHRB to approve security policies and safeguards to ensure player protections, age verification and location. 14. Directs the CHRB to adopt rules prohibiting any owner, trainer, jockey, or stable employee from placing an exchange wager on any horse owned, trained, or ridden by any of those individuals. 15. Includes language (similar to Advance Deposit Wagering law) relative to supporting the contracting rights of parimutuel clerks that have been displaced due to the increased automation of the wagering process, in addition to a specific distribution to the existing jockey health and benefit welfare fund. 16. Provides that monies that would have been otherwise distributed to a purse account from the increased takeout on Breeders' Cup day(s) shall be available for the purpose of promoting and sponsoring the Breeders' Cup. 17. Also, requires the host track of the Breeders' Cup to enter into a written agreement with the Breeders' Cup, LTD, in consultation and cooperation with the California Tourism Commission and the statewide marketing organization relative to the manner in which the funds set aside to support and promote the Breeders' Cup are to be expended. 18. Furthermore, requires that a written report be made to SB 1072 (Calderon) continued Page 5 the CHRB detailing the manner in which the set aside funds were utilized to promote and support the Breeders' Cup. 19. Extends the sunset, from January 1, 2011 to January 1, 2014, on provisions that authorize racing associations and fairs that conduct thoroughbred racing to pay to the owners' organization a certain portion of the purses for a statewide marketing program, as specified, to increase interest in horse racing. 20. Requires the statewide marketing plan for horse racing to be presented (rather than submitted) to the Horse Racing Board at the CHRB's November meeting. Also, requires the written plan be submitted to the board by November 1st of each year. 21. Changes the distribution amount that would normally be available for commissions and purses, from 0.4% to an amount not to exceed 0.25% of the total amount handled by each satellite wagering facility which is then distributed to the marketing organization, as specified. 22. Provides that an initial amount of 0.05% of the total amount handled by each satellite wagering facility shall be distributed to the nonprofit organization designated by the CHRB for the purpose of maintaining a database of horse racing information as defined. 23. Requires the marketing organization, on a quarterly basis, to submit to the CHRB a report accounting for all receipts and expenditures of the promotion funds during the previous three months. 24. Deletes obsolete language regarding workers' compensation responsibilities associated with the statewide marketing association. EXISTING LAW Article IV, Section 19(b) of the Constitution of the State of California provides that the Legislature may provide for the regulation of horse races and horse race meetings and wagering on the results. Existing law provides that the California Horse Racing Board (CHRB) shall regulate the various forms of horse SB 1072 (Calderon) continued Page 6 racing authorized in this state. Existing law provides that "parimutuel wagering" is a form of wagering in which bettors either purchase tickets of various denominations, or issue wagering instructions leading to the placement of wagers, on the outcome of one or more horse races. When the outcome of the race or races has been declared official, the association distributes the total wagers comprising each pool, less the amounts retained for purposes specified in this chapter, to winning bettors. Existing law requires racing associations to pay out certain percentages of the total amount wagered and of the portion deducted from the parimutuel pool (i.e., the takeout), for state license fees, owner purses, racing association commissions, and breeding incentive programs. The amounts vary depending upon the type of breed bet upon (Thoroughbred, Quarter Horse, harness, etc.), the type of bet made (e.g., conventional or exotic), and whether the wager was made on-track or at a satellite wagering facility. Existing law authorizes a Thoroughbred association or fair, at the joint request of the association or fair and the organization representing the horsemen, and subject to approval of CHRB, to deduct from the parimutuel pool for any type of wager, an amount of 10% to 25%, inclusive, of the total amount handled for the meeting of the thoroughbred association or fair that accepts the wager. Existing law allows the distribution of funds from the amount deducted to be modified or redirected, subject to the approval of CHRB, as specified. Existing law permits CHRB to set the deduction for any new type of wager introduced after January 1, 2004, in an amount of not less than 10% nor more than 30% at the joint request of an association or fair and the horsemen's organization. Existing law authorizes a quarter horse association, subject to approval by the CHRB, and a harness racing association to deduct up to two percent more from the total amount wagered in the parimutuel pool for any type of wager, and, specifies how the funds shall be distributed to eligible satellite wagering facilities, owners' purses and racetrack commissions. SB 1072 (Calderon) continued Page 7 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 jockey's 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. Existing law authorizes racing associations, fairs, and the Thoroughbred Owners of California (TOC) to form a private statewide marketing organization to market and promote thoroughbred and fair horse racing. The California Marketing Committee (CMC) is generally responsible for promoting horse racing in the state by developing and implementing a marketing plan that will increase on-track and off-track attendance throughout the state. The CMC is required to submit an annual marketing and promotion plan to the California Horse Racing Board (CHRB). These provisions sunset as of January 1, 2011. Existing law provides for the California Travel & Tourism Commission (CTTC). The CTTC is a not-for-profit, 501(C)(6) corporation formed in 1998 to work jointly with the State of California's Division of Tourism to implement the annual Marketing Plan, which promotes California as a travel destination. While these two partners (CTTC and Division of Tourism) are separate legal entities, they are commonly referred to jointly as California Tourism. BACKGROUND Takeout Rate Component : The "takeout" is the amount deducted from wagers before winnings are paid out to bettors. The state, racetracks, breeders, and horsemen through purses, receive a distribution from the takeout. Currently, California's takeout rate on Thoroughbred races is 15.43% for win, place, and show wagers, and 20.68% for other types of wagers (i.e., Exacta, Trifecta, and Pick-6). Over the last couple of years, there has been a movement within the racing industry in other states to have greater flexibility to either lower or increase the takeout. For instance, Keeneland Racetrack in Kentucky and Saratoga in SB 1072 (Calderon) continued Page 8 New York lowered their takeout structure while the Maryland Jockey Club increased their parimutuel takeout. The various racing jurisdictions experienced varied results after altering the takeout. Many within the racing industry have a view that moderating takeout rates on specific pools might stimulate handle as well as overall revenue for purses. Today's racing customer is not just a local resident who comes to a California racetrack but a patron sitting in a simulcast facility in another state with a wide choice of tracks to wager on. Ultimately, racing's patrons drive the parimutuel market and their response to an increased or decreased takeout on any type of wager will determine the rate of takeout. Many within the racing industry have a view that moderating takeout rates on specific pools might stimulate handle as well as overall revenue for purses. AB 1308 (Torrico), Chapter 410, Statutes of 2007, gave a racing association and the owners' organization flexibility, subject to CHRB approval, to set takeout rates at an amount of not less than 10% nor more than 25% from the parimutuel pool for any type of wager. AB 1308 provided the horse racing industry with greater flexibility to make adjustments to the takeout. This measure would expand on the concept contained in AB 1308 by directing the increased takeout (2% - 3%) directly to purses which benefits owners, trainers, and jockeys. This measure is intended to allow greater flexibility to direct the distribution of funds generated by a takeout increase to an area with the greatest economic benefit for the industry. This measure is also intended to enable the California racing industry to increase its competitiveness by establishing purses more consistent with purses in other major racing states (e.g., New York, Pennsylvania, West Virginia, Delaware, Iowa, Indiana, Louisiana, New Mexico, and Florida) that benefit from the operation of slot machines and video lottery terminals, which are prohibited at California racetracks. Even with an increase in the takeout rate, California would still rank among the top twenty lowest takeout structures on specific exotic wagers in the country. Proponents indicate that the increased takeout revenue would be focused on an agreed upon strategy for stabilizing industry operations. SB 1072 (Calderon) continued Page 9 SB 1072 would allow the CHRB to postpone and/or revoke the implementation of the takeout increase, as defined, if the board determines that the incremental amount received from out-of-state betting systems is insufficient to achieve the objective. Takeout Rate Comparisons : Currently, California has one of the lowest takeouts on rates on exotic wagering (20.68%) in the nation. Del Mar Thoroughbred Club, Santa Anita Park, Hollywood Park, and Golden Gate Fields rank in the top ten nationally for offering the lowest takeout rate on exotic wagers. Examples of a higher takeout rate (Thoroughbreds) for an exotic wager (Trifecta) would be Fair Grounds in Louisiana at 25%, Monmouth Park in New Jersey at 25%, Pimilco in Maryland at 25.75%, Belmont Park and Saratoga Park in New York at 26%, and Penn National in Pennsylvania at 31% compared to California at 20.68%. Even with the takeout increase as proposed, California will still be in the middle-tier for its takeout on exotic wagers compared to other racing prominent jurisdictions across the country. Deteriorating Status of the Horse Racing Industry in California : The California horse racing industry's long-term health is threatened by a combination of factors, including competition from racing in other states, other forms of gaming within California, racetrack bankruptcies and the potential for higher return from development than operating revenues. As resources shrink, the industry is experiencing deficits in virtually every one of its revenue sources. Traditional take out, allocation and distribution formulas are no longer able to sustain ongoing operations. As the value of racing operations declines, track ownership is struggling to maximize shareholders' return on the investment and tempted by alternative uses of the property that yield higher returns. Consequently, the racing industry is suffering unprecedented instability and capital flight. Tens of thousands of industry jobs are in immediate jeopardy, along with breeding farms and precious open space in urban centers throughout California. Also at risk is a substantial amount of local and state revenue generated both directly and indirectly by the industry. Exchange Wagering Component: This measure would SB 1072 (Calderon) continued Page 10 additionally authorize the CHRB to license entities to operate exchange wagering systems that accept "exchange wagers" from individuals residing either within or outside of this state on horse races run in California or in other states, so long as the process is conducted in compliance with the federal Interstate Horseracing Act. Exchange wagering is defined as a means of parimutuel wagering in which two or more persons place identically opposing wagers on a horse race. SB 1072 would require exchange wagering agreements to be entered into by the exchange wagering licensee, the applicable racing association or fair conducting live racing in the state, and the horsemen's organization representing the particular breed currently racing at the meet, and that provides for the contractual terms and conditions specifying the use of the racing signal and the compensation returned to the respective parties to the agreement, audit terms and conditions, and contractual remedies. Exchange wagering on horse racing is currently permitted in England, where it has been reported to have contributed to a double-digit increase in wagering handle as well as helping to appeal to a different segment of the betting public that generally did not gravitate to conventional parimutuel wagering opportunities. Similar legislation has been introduced and is moving through the New Jersey State Legislature as well. Wagering on horse races in California is conducted using the "parimutuel method" in which bettors are betting against each other, with no other entity having an interest or stake in the outcome of the race. In traditional parimutuel wagering, each bettor selects the horse or horses they choose to wager on an outcome (how those individual horses will finish in a race - Win, Place, and Show wagering) or the order of finish for multiple numbers of horses (exotic wagers such as exacta, trifecta, superfecta), and the amount which they desire to wager. The odds on any particular horse are determined by the total amount bet on the race by the individual bettors. The bets made are pooled together and the parimutuel operator is responsible for paying the winning bets from that pool. In parimutuel "exchange wagering" (which involves bettors betting against each other, with no other entity having an SB 1072 (Calderon) continued Page 11 interest or stake in the outcome of the race), each bettor again selects a horse, an outcome, and the amount the bettor desires to wager. Another bettor can match that wager, choosing to wager the opposite of the original wager. For example, if bettor "A" thinks a horse will win a race and would like to wager $2 to win on that horse at 1-1 odds, bettor "B" can match the wager for $2 at 1-1 odds if bettor B has the opinion that the horse will not win the race. When wagers are matched, they are pooled together and the parimutuel exchange wagering operator is responsible for paying the winning bettors out of the pool (just as is the case in all other forms of parimutuel wagering on horse races in California.) Parimutuel exchange wagering is limited to win, place and show wagering. The racing industry derives revenue from traditional parimutuel wagering from a "takeout" or "commission" that is charged on every wager placed in the pool, and from parimutuel exchange wagering from a "commission" that is charged only on a bettor's net winnings on a particular race. In either case, those revenues are shared among the horse owners (purses), the race tracks and the provider of the parimutuel wagering service. Breeders' Cup Component: This measure is also intended to encourage the Breeders' Cup to consider locating its series of championship races on a permanent basis in California. The State of California is in competition with the states of Kentucky and New York to be the permanent home of the Breeders' Cup, which is actively looking at a permanent host location as a potential option as part of its ongoing strategic planning initiative. The Breeders' Cup Championship series of races were held in California in 2008 and 2009 and generated significant revenue and tourism for the State. It is a well known fact that the California horse racing industry is in distress and has lost favor with the public, primarily due to competition with other forms of gambling and declining popularity of its own product. Yet the horse racing industry in this state remains an important segment of the economy, generating by some estimates almost 50,000 jobs. It is the author's belief that locating the Breeders' Cup on a permanent basis in California would generate $60 million in economic output and create over 500 direct and SB 1072 (Calderon) continued Page 12 indirect jobs, according to the Los Angeles Economic Development Corporation's estimate in relation to the 2009 Breeders' Cup that was held at Santa Anita racetrack. To that end, this measure would stipulate that the monies that would have otherwise been distributed to a purse account from the increased takeout on Breeders' Cup day(s) shall be available for the purpose of promoting and sponsoring the Breeders' Cup. Marketing Program Component: SB 27 (Maddy), Chapter 335, Statutes of 1998, among its provision, created a private statewide marketing organization for thoroughbred and fair racing that is funded by 0.4 percent of the instate off-track handle. The funds generated from this distribution are used to market California horse racing on a statewide basis. The California Marketing Committee (CMC) is generally responsible for promoting horse racing in the state by developing and implementing a marketing plan that will increase on-track and off-track attendance throughout the state. An underlying assumption of the CMC's Marketing Plan is that it is far easier to capture a new fan through an on-track visitation to a satellite wagering facility. In 2003, the CMC received approximately $6.1 million to support its marketing efforts but due to handle declines it has been reduced to approximately $4 million in 2010. Current law provides that the CMC must annually submit to the CHRB a statewide marketing and promotion plan for thoroughbred and fair horse racing that encompasses all geographical zones in the state, including the manner in which funds were expended in the implementation of the plan for the previous calendar year. Additionally, the 2010 CMC budget redirects a portion of its marketing and advertising funds to enhance purses on major racing days, such as the Santa Anita Handicap, Hollywood Gold Cup, and Pacific Classic. The CMC will expire after this year due to a sunset provision in the law unless there is legislation to extend it. AB 1736 (Governmental Organization), Chapter 444, Statutes of 2007, extended the sunset to January 1, 2011. SB 1072 will extend the sunset of the program until January 1, 2014. Additionally, SB 1072 makes various modifications to the manner in which the marketing organization may expend its revenue. Furthermore, SB 1072 contains language which SB 1072 (Calderon) continued Page 13 provides an amount not to exceed 0.05% of the total amount handled by each satellite wagering facility shall be distributed to the non-profit organization [the California Horse Racing Information Management System, Inc (CHRIMS)] designated by the CHRB for the purpose of maintaining a database of horse racing information, as defined. Proponents indicate that the original funding for the development of CHRIMS was provided by un-cashed vouchers [AB 1418 (Tucker), Chapter 311, Statutes of 1994]. As account wagering has proliferated and on-track and off-track wagering have experienced severe declines in handle due to economic conditions the revenues from vouchers have declined dramatically. CHRIMS has filled the funding gap through the deferral of equipment and software upgrades, direct industry surcharges and through the development of outside revenues from services provided to customers in other states. However, voucher revenues have continued to decline and are projected to decline by $125,000 in 2010. In addition, CHRIMS must repay capital equipment financing provided by Oak Tree Racing Association which was used to replace equipment on the verge of failure and replace revenues from services previously provided to the CMC for its player rewards and database marketing efforts. Proponents contend that this measure will help ensure that CHRIMS remains a valuable technology and marketing tool for California's horse racing industry. Arguments in Support: Proponents contend that SB 1072 is about self-reliance, re-investing in California for growth, and protecting jobs for the future. Proponents claim this measure would potentially increase purses by $25 million or more annually thereby placing California's purse structure on a competitive basis with other states. Proponents also argue that the higher purses will help increase field size and provide increased handle. Furthermore, proponents believe there are adequate safeguards (checks and balances) in this measure to ensure that implementation of "exchange wagering" will benefit California's horse racing industry. Arguments in Opposition: Opponents are generally supportive of the provisions in this measure pertaining to the increase in the takeout on specified wagers as well as the provisions intended to improve California's ability to attract the Breeders' Cup World Championships however SB 1072 (Calderon) continued Page 14 opponents have expressed concern with the provisions authorizing "exchange wagering." Opponents state that "exchange wagering actually allows bettors using the Internet to place bets that a horse will lose, rather than win. This is fraught with danger and threatens the very integrity of horse racing in our state which is a multi-billion dollar industry, providing tens of thousands of jobs. This also has the potential of actually reducing on-track activity and could negatively impact jobs in the future." Opponents believe that exchange wagering is a major policy change in horse racing law that warrants major study and discussion prior to adoption by the Legislature. Staff Comments: As noted above, "exchange wagering" is a form of gambling in which two or more persons place directly opposing wagers on the outcome of horse races and "sporting events." Typically, exchange wagering allows a better to "back" or wager on a selected horse to win, with another bettor "laying" or wagering on that same horse not to win. A back and a lay become matched when a bettor lays at the same price at which another bettor backs that same outcome, with the amount subject to the lay being proportionately commensurate to the amount subject to the back. Exchange wagering allows the bettor to name his/her own odds in the hopes of luring a match. While the potential for positive industry effects is present with exchange wagering, so too is the prospect for disaster. Some within the industry believe that exchange wagering may cannibalize traditional parimutuel wagering and actually leave less money in the system for those responsible for putting on the show, (e.g., owners, breeders and racetracks), thus placing the future of horse racing in jeopardy. PRIOR/RELATED LEGISLATION AB 2414 (Perez) 2009-10 Session. Would sunset the exchange wagering provisions of SB 1072 (Calderon) on May 1, 2016. (Pending in Senate Rules Committee) SB 16xx (Ashburn), Chapter 12, Statutes of 2009-10 Second Extraordinary Session. Among other things, provided that beginning on July 1, 2009, and annually thereafter, thirty-two million ($32,000,000) shall be appropriated from the state's General Fund and paid into the Fair and SB 1072 (Calderon) continued Page 15 Exposition Fund for the financial support of the network of California fairs. SB 766 (Negrete McLeod) Chapter 766, Statutes of 2009. Authorized the CHRB to shift money around from various funds, including the marketing funds, which are in surplus, to others that are in deficit, such as the Vanning and Stabling Account. SB 517 (Florez) Chapter 636, Statutes of 2009. Allowed a thoroughbred association or fair, subject to the approval of the CHRB, to alter the amount deducted from horse racing wagering. Also, allowed the distribution of funds from the amount deducted to be modified or redirected, subject to the approval of CHRB. AB 246 (Price) Chapter 226, Statutes of 2009. Authorized a quarter horse associations, subject to approval by the CHRB, and a harness racing association to deduct up to two percent more from the total amount wagered in the parimutuel pool for any type of wager, and, specified how the funds shall be distributed to eligible satellite wagering facilities, owners' purses and racetrack commissions. AB 1499 (Evans) Chapter 151, Statutes of 2009. Reauthorized a fair to deduct an additional 0.5 percent of the total amount handled in exotic parimutuel pools of races for any breed, other than races solely for thoroughbreds, to defray workers' compensation insurance costs for trainers and owners who race at an applicable fair. AB 1308 (Torrico) Chapter 410, Statutes of 2007. Authorized a Thoroughbred association or fair and the horsemen's organization, subject to approval by CHRB, to deduct an amount of not less than 10% nor more than 25% from the parimutuel pool for any type of wager. AB 1736 (Governmental Organization) Chapter 444, Statutes of 2007. Among other things, extended the sunset on provisions to enable racing associations and fairs to fund taking part in the statewide horse racing marketing program. AB 765 (Evans) Chapter 613, Statutes of 2007. SB 1072 (Calderon) continued Page 16 Reauthorized horse racing's Advance Deposit Wagering law, which was due to "sunset" on January 1, 2008, as specified. In addition, provided that a fair, combination of fairs, or an association conducting racing at a fair, may, with CHRB approval, deduct an additional 1% from its handle, to be used for maintenance and improvements at a fair's racetrack inclosure, as specified. AB 2164 (Plescia) Chapter 80, Statutes of 2004. Extended the sunset on provisions to enable racing associations and fairs to fund taking part in the statewide horse racing marketing program to 2006. AB 388 (Strickland) Chapter 174, Statutes of 2003. Authorized CHRB to set the deduction for any new type of wager introduced after January 1, 2004, in an amount of not less than 10 percent nor more than 30 percent at the joint request of an association or fair and the horsemen's organization. AB 2931 (Horton) Chapter 922, Statutes of 2002. Authorized the racing associations to use funds earmarked for the CMC for use in developing a program to off-set workers' compensation rates for horse trainers in the state. AB 2869 (Horton) Chapter 924, Statutes of 2002. Allowed CHRB to authorize a racing association and the organization representing horsemen to reduce the portion deducted from the parimutuel pool for purses and commissions, provided that the change only affected funds available for purses and commissions. AB 2502 (Wyland) Chapter 90, Statutes of 2002. Extended the sunset on provisions to enable racing associations and fairs to fund taking part in the National Thoroughbred Racing Association (NTRA) to increase interest in horse racing. AB 471 (Hertzberg) Chapter 198, Statutes of 2001. Allowed a California resident to wager on races (including most out-of-state racetracks) using the phone, Internet or other electronic media. SB 27 (Maddy) Chapter 335, Statutes of 1998. Among other things, granted major license fee relief ($40 million annually) and limited out-of-state full-card simulcasting. SB 1072 (Calderon) continued Page 17 Also, created the CMC that is funded by 0.4 percent of the in-state off-track handle. SB 103 (Maddy) Chapter 10, Statutes of 1998. Provided for California's involvement in the NTRA by permitting thoroughbred owners to (pay to) take part in a national marketing program to increase interest in horse racing. SUPPORT : As of August 31, 2010: California Authority of Racing Fairs California Horse Racing Board California Teamsters Public Affairs Council California Thoroughbred Breeders Association Del Mar Thoroughbred Hollywood Park Jockeys Guild Los Angeles County Fair Service Employees International Union Thoroughbred Owners of California TVG UNITE HERE OPPOSE : As of August 31, 2010: California Thoroughbred Trainers Churchill Downs Incorporated (Twin Spires, YouBet, and United Tote) California Coalition Against Gambling Expansion (CCAGE) FISCAL COMMITTEE: Senate Appropriations Committee **********