BILL ANALYSIS Ó
AB 270
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Date of Hearing: March 30, 2011
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 270 (Perea) - As Introduced: February 7, 2011
SUBJECT : Satellite wagering.
SUMMARY : Creates an exception to Horse Racing Law by
authorizing a satellite wagering facility, located on a
fairground to elect not to be subject to the requirements
related to a satellite facility supervisor if the board of
directors of the fair, after a public hearing, deems those
requirements to be not economically feasible.
EXISTING LAW :
1) Provides for the California Horse Racing Board (CHRB) to
regulate the various forms of horse racing authorized in this
state.
2) Requires that every person who participates in, or has
anything to do with, the racing of horses and every employee of
a pari-mutuel department to be licensed by CHRB.
3) Authorizes CHRB to permit licensed racing associations,
fairs and mini-satellites licensees to operate satellite
wagering facilities.
4) Requires CHRB to set forth requirements for the position of
satellite facility supervisor for all satellite wagering
facilities operated by the state or on public land. The
supervisor is required to monitor the performance of licensees
at the facilities.
5) Defines "inclosure" for purposes of wagering as all areas of
the racing association's or fair's grounds and locations, as
designated by the racing association or fair licensed to conduct
a live racing meeting and approved by CHRB, excluding the public
parking lot.
FISCAL EFFECT : This bill has been keyed non-fiscal by
Legislative Counsel.
COMMENTS :
AB 270
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Purpose of the bill : According to the author, this bill will
provide greater financial flexibility to satellite wagering
facilities on fairgrounds that find themselves in difficult
financial situations due to the mandatory staffing language in
current law relating to satellite supervisors.
Over the years, expenses have increased considerably while the
mechanism to generate revenue to cover specific overhead
expenses is limited by Horse Racing Law (2% commission on each
dollar wagered). Due to declining attendance, increased costs
and other factors, some smaller fair satellite wagering
facilities have been faced with the decision to close their
wagering operations. This bill would provide flexibility in
managing overhead costs which could allow for these facilities
to remain in operation generating revenue for the fair and
California's horse racing industry.
The author notes that county fairs and agricultural associations
receive a great deal of their revenue from wagering on horse
racing, so it is in their best interest to ensure that satellite
wagering remains a viable facet of their business operations.
Additionally, this bill is intended to ensure that the
California horse racing industry remains viable as an
agribusiness within the state.
Background :
Duties of a Simulcast Facility Supervisor : The simulcast
facility supervisor is responsible for the oversight of the
facility to ensure compliance with the Board's laws, rules and
regulations. The duties, in addition to any duties and
responsibilities required by his/her employer, include, but are
not limited to, immediately reporting to the CHRB or its
stewards, in writing or by telephone, any violation of the
Board's rules or regulations which come to their attention or of
which they have knowledge. This includes referrals of matters
involving misconduct of licensees to the host track stewards and
ordering the exclusion or ejection of persons who are prohibited
from participating in pari-mutuel wagering and from being
present within any racing inclosure during a recognized race
meeting. Additional duties include maintaining minutes of the
conduct of each day's events at the simulcast location where
assigned, supervising all phases of the facility which are
directly related to the requirements of the Board's laws and
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regulations at the simulcast location.
California's off-track wagering system : California has allowed
off-track betting in satellite wagering facilities located at
fairs and racing associations throughout the state for 26 years.
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.
Currently, there are 34 satellite-wagering facilities in
California. Six of the facilities are at privately owned
racetracks, eight at fairs that conduct live racing, 15 at
county fairs and district agricultural associations, and three
on Indian lands. Simulcast-only facilities do not have live
racing; those facilities accept wagers on races
broadcast via simulcast from in-state and out-of-state
racetracks.
In 2007, AB 241 (Price) was enacted to authorize the creation of
15 additional "minisatellites" in each racing zone for a total
of 45. The stated intent of this legislation was to make the
sport of horse racing even more accessible to potential
California bettors and to increase the handle - the amount
wagered on horse races - by giving preference to minisatellites
that will generate the largest handle if more than 15
applications for minisatellites are submitted to CHRB for a
given zone. To date, only two mini-satellites have been opened
statewide.
In addition, since the mid-1990's, seven state-designated or
county fairs have received the statutory authority to locate
additional satellite-wagering facilities off the respective
fairgrounds but within the boundaries of the fair district. To
date, only the Fresno County Fair has exercised this authority
by leasing space in a card-club in downtown Fresno.
Simulcasting wagering : 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
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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.
Attendance declines : 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 advance deposit wagering.
Policy consideration : The author might to consider an amendment
which states that a fair would also have to receive the consent
of the CHRB in order to forego the requirement of a licensed
simulcast facility supervisor, as stated in the Rules and
Regulations of the Board.
Also, to ensure that larger facilities might remain staffed by a
licensed supervisor, the author might consider narrowing the
bill to focus on a specific class of facility which can't
sustain the position due to the financial impact on its
operation.
Prior legislation : AB 246 (Price), Chapter 226, Statutes of
2009. Authorized a quarter horse association and a harness
racing association to deduct up to 2 percent more from the total
amount wagered in the pari-mutuel pool for any type of wager,
and, specifies how the funds shall be distributed to eligible
satellite wagering facilities, owners purses and racetrack
commissions. Intended to provide financial assistance to a
number of satellite wagering facilities that find it difficult
to stay open and accept the night signal because they do not
make a profit.
AB 241 (Price), Chapter 594, Statutes of 2007. Authorizes all
fairs to operate a satellite wagering facility off of the fair
grounds. Authorizes the establishment of up to 45
mini-satellite wagering sites to be operated by private industry
throughout California.
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SB 14 (Maddy), Chapter 1273, Statues of 1987. Expanded
satellite wagering statewide. Satellite wagering was the first
major expansion of racing in this state since 1933
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531