BILL ANALYSIS Ó
AB 270
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 270 (Perea)
As Amended September 2, 2011
Majority vote.
-----------------------------------------------------------------
|ASSEMBLY: |76-0 |(May 19, 2011) |SENATE: |37-0 |(September 8, |
| | | | | |2011) |
-----------------------------------------------------------------
Original Committee Reference: G.O.
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 and proper
notification of the California Horse Racing Board (CHRB) takes
place, as described.
The Senate amendments :
1)Provide that thirty days prior to the public hearing, the fair
board must notify the CHRB in writing of its intention to not
be subject to the requirements related to a satellite facility
supervisor.
2)Specify that the fair satellite facility shall continue to
abide by all laws and regulations pertaining to the operation
of a satellite facility, including the responsibilities of the
position of satellite facility supervisor.
AS PASSED BY THE ASSEMBLY , this bill permitted 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, as defined
FISCAL EFFECT : This bill has been keyed non-fiscal by
Legislative Counsel.
COMMENTS : This bill, as amended is consistent with Assembly
actions.
AB 270
Page 2
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
regulations at the simulcast location.
AB 270
Page 3
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), Chapter 594, Statutes of 2007, was
enacted to authorize the creation of 15 additional
"mini-satellites" 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 mini-satellites that will generate the
largest handle if more than 15 applications for mini-satellites
are submitted to CHRB for a given zone. To date, only two
mini-satellites have been opened statewide.
In addition, since the mid-1990s, 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
content to as many wagering locations as possible, such as other
racetracks, fair satellite facilities and Indian casinos.
AB 270
Page 4
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.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0002710