BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 270|
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CONSENT
Bill No: AB 270
Author: Perea (D)
Amended: 5/12/11 in Assembly
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 12-0, 6/14/11
AYES: Wright, Anderson, Calderon, Cannella, Corbett, De
León, Evans, Hernandez, Padilla, Strickland, Wyland, Yee
NO VOTE RECORDED: Berryhill
ASSEMBLY FLOOR : 76-0, 5/19/11 - See last page for vote
SUBJECT : Horse racing: satellite wagering
SOURCE : Author
DIGEST : This bill creates an exception to Horse Racing
Law by authorizing a fair satellite wagering facility 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. Specifically, this bill:
(1) permits a fair satellite wagering facility, that
generate less than $10 million annually in total handle, to
determine that the position of satellite facility
supervisor is not economically feasible, following a public
hearing by the board of directors, and (2) stipulates that
a fair satellite wagering facility which elects to
eliminate the satellite wagering supervisor position must
do both of the following: (a) continue to abide by all
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laws and regulations pertaining to its operation and (b)
provide notice of the fair board's action to the California
Horse Racing Board within 10 days of approval of the Fair
Board.
ANALYSIS :
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 grants the California Horse Racing Board
(CHRB) the authority to regulate the various forms of horse
racing authorized in this state.
Existing law requires the 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 law provides that the supervisor shall,
among other things, monitor the performance of licensees at
the facilities.
Existing law authorizes the CHRB to permit licensed racing
associations, fairs and mini-satellite licensees to operate
satellite wagering facilities.
Existing law authorizes the CHRB to approve the
establishment of 15 mini-satellite wagering sites in each
zone (for a total of 45) and defines "minisatellite
wagering site" to mean a location where satellite wagering
may be conducted, with the approval of the CHRB, provided
that the wagering occurs in an area that is restricted to
those who are 21 years of age or older.
Existing law specifies that no mini-satellite site may be
located within 20 miles of a race track, a satellite
wagering facility, or a tribal casino that has a satellite
wagering facility without the consent of each facility
within that 20-mile radius.
This bill creates an exception to Horse Racing Law by
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authorizing a fair satellite wagering facility 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. Specifically, this bill: (1)
permits a fair satellite wagering facility, that generate
less than $10 million annually in total handle, to
determine that the position of satellite facility
supervisor is not economically feasible, following a public
hearing by the board of directors, and (2) stipulates that
a fair satellite wagering facility which elects to
eliminate the satellite wagering supervisor position must
do both of the following: (a) continue to abide by all
laws and regulations pertaining to its operation and (b)
provide notice of the fair board's action to the California
Horse Racing Board within 10 days of approval of the Fair
Board.
Background
History: California has allowed off-track betting in
satellite wagering facilities located at fairs and racing
associations throughout the state for well over 25 years.
Satellite wagering 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 would expose and market
horse racing to potential customers and also make it far
more convenient for existing patrons to wager more often.
Currently, there are 34 satellite-wagering facilities in
California located at live race tracks, fair grounds and
Indian casinos. In addition, seven state-designated or
county fairs have received 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 (Fresno Club One).
In 2007, AB 241 (Price) was enacted to authorize the
creation of 15 "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
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potential California bettors and to increase the handle -
the amount wagered on horse races. To date, only two
mini-satellites have been opened and licensed statewide
(one is located at the California Commerce Club in the City
of Commerce, the other is located at the OC Tavern Grill
and Sports Bar in San Clemente).
Duties of a Simulcast or Satellite Facility Supervisor .
The simulcast facility supervisor is responsible for the
oversight of the facility and to ensure compliance with the
state's laws, rules and regulations. The duties, in
addition to any duties and responsibilities required by his
or 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 CHRB'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 enclosure
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 CHRB's laws and
regulations at the simulcast location.
Prior/Related Legislation
SB 1439 (Price) of 2010 would have decreased the exclusion
zone in which a "minisatellite" horse racing wagering
facility can be situated in proximity to an existing horse
racing satellite wagering facility or live horse racing
race track from a 20 to 15 mile radius. (Failed passage on
Senate floor)
AB 2215 (Fuentes), Chapter 255, Statutes of 2010, among
other things, authorizes a minisatellite wagering facility
to enter into an agreement with an advance deposit wagering
(ADW) provider to accept and facilitate the placement of
any wager at its facility that a California resident could
make through that ADW provider.
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SB 16xx (Ashburn) Chapter 12, Statutes of 2009-10 Second
Extraordinary Session, among other things, provides 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
Exposition Fund for the financial support of the network of
California fairs.
AB 246 (Price), Chapter 226, Statutes of 2009, authorizes a
quarter horse association and a harness racing association
to deduct up to two 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, owner's purses and racetrack
commissions
AB 241 (Price), Chapter 594, Statutes of 2007, authorizes
all fairs to operate a satellite wagering facility off of
the fair grounds. Also, authorizes the establishment of up
to 45 mini-satellite wagering sites to be operated by
private industry throughout California.
AB 1286 (Richardson) Chapter 202, Statutes of 2007, allows
the Alameda County Fair and the Los Angeles County Fair
(Fairplex) to obtain authorization to operate new satellite
wagering facilities off of their fair grounds under certain
conditions.
SB 677 (Murray) 2005-06 Session, would have authorized the
establishment of seven additional satellite wagering
facilities around the state. (Died Assembly Inactive File)
SB 1096 (Dutton) Chapter 1096, Statutes of 2005, authorizes
the National Orange Show (San Bernardino County) to operate
a second satellite-wagering operation within its fair
district boundaries.
AB 401 (J. Horton) Chapter 556, Statutes of 2003, permitts
CalExpo, with the approval of the Department of Food and
Agriculture and CHRB, to operate a satellite wagering
facility within the boundaries of CalExpo in addition to
any facility otherwise authorized under current law.
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SB 14 (Maddy), Chapter 1273, Statues of 1987, expands
satellite wagering statewide.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/14/11)
California Authority of Racing Fairs
California Exposition and State Fair
Del Mar Thoroughbred Club
Kern County Fair
National Date Festival
Riverside County Fair
San Joaquin County Fair
Santa Maria Fairpark
Shasta District Fair
The Big Fresno Fair
ARGUMENTS IN SUPPORT : According to the author's office,
this bill intends to provide greater financial flexibility
to smaller fair satellite wagering facilities that find
themselves in difficult financial situations due to the
mandatory staffing language in current law pertaining to
satellite facility supervisors. The author's office points
out that over the years, expenses have increased
considerably while the mechanism to generate revenue to
cover overhead is limited by Horse Racing Law (two percent
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. The author's
office states that this measure would provide flexibility
in managing overhead costs which in turn would enable these
facilities to remain in operation generating revenue for
the fair and California's horse racing industry.
The author's office notes that county fairs and
agricultural associations receive a great deal of their
revenue from wagering on horse racing, so it's in their
best interest to ensure that satellite wagering remains a
viable facet of their business operation. Additionally,
this bill intends to ensure that the California horse
racing industry remains viable as an agribusiness within
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the state.
ASSEMBLY FLOOR :
AYES: Achadjian, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, John A. Pérez
NO VOTE RECORDED: Alejo, Eng, Gorell, Yamada
PQ:do 6/15/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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