BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 707
                                                                  Page  1

          Date of Hearing:   May 11, 2011

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                                 Isadore Hall, Chair
                    AB 707 (Garrick) - As Amended:  March 31, 2011
           
          SUBJECT  :   Horse racing: thoroughbred races.

           SUMMARY  :   Increases from 32 to 60, the limitation on the total 
          number of out-of-state Thoroughbred races that may be imported 
          per day by a Thoroughbred association or fair that is conducting 
          a live race meet with approval by the California Horse Racing 
          Board (CHRB).   

           EXISTING LAW  :

          1) Provides that CHRB regulate the various forms of horse racing 
          authorized in this state.

          2) Limits the number of races that may be imported by 
          associations and fairs to no more than 32 races per day on days 
          when live Thoroughbred or fair racing is being conducted in this 
          state, with specified exceptions.  

          Exempts from that 32-race per day limit races imported that are 
          part of the race card of certain prominent races, including the 
          Kentucky Derby, the Kentucky Oaks, the Preakness Stakes, the 
          Belmont Stakes, the Jockey Club Gold Cup, the Travers Stakes, 
          the Breeders' Cup, the Dubai Cup, or the Haskell Invitational.

          3) Authorizes Thoroughbred racing associations or fairs to 
          distribute the audiovisual signal and accept wagers on the 
          results of out-of-state and international Thoroughbred races 
          during the calendar period the association or fair is conducting 
          live racing, including days on which there is no live racing 
          being conducted by the association or fair.

           FISCAL EFFECT  :   This bill has been keyed non-fiscal by 
          Legislative Counsel.

           COMMENTS  :   

          The scale and scope of horse racing is governed by statute.  Any 
          attempt to expand its market requires legislative action.  The 
          California Legislature has attempted to address the racing 








                                                                  AB 707
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          industry's long-term viability through a number of legislative 
          efforts to expand the exposure of horse racing to the general 
          public and enhance horse racing's marketability.

          AB 707 increases the number of out-of-state races on which 
          Thoroughbred and fair racing associations may simulcast and 
          accept wagers on each day from 32 to 60.  The author states by   
                allowing Thoroughbred and fair racing associations to 
          import more out-of-state races, it will give the horse racing 
          industry a marketing tool and leverage with racetracks outside 
          of this state.  Presently, due to specific importation 
          restrictions, Thoroughbred and fair racing associations are 
          sending their signal to out-of-state locations, but are not able 
          to receive the maximum rate for their live racing product.  
          However, if these racing associations were able to accept more 
          out-of-state races under some type of reciprocity agreement, a 
          majority of the money wagered between the two markets would stay 
          in this state for track commissions, purses, and breeders' 
          awards.

          This measure will also give the industry a marketing tool to 
          increase on-track and off-track attendance because more quality 
          races from out-of-state locations would be offered to their      
            wagering patrons on a daily basis.

          Background: 

           Satellite wagering  :  Satellite wagering via an off-track 
          facility has been legal in California since 1985.  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.

           Simulcasting  :  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.  
          Revenues are increased because simulcasting provides racetracks 








                                                                  AB 707
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          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.

           Racetrack attendance  :  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 account wagering. 

           In opposition  :  In opposition to this bill, Los Alamitos Race 
          Course writes, "this measure will have a detrimental impact on 
          Los Alamitos.  Those who enjoy the sport of wagering on horse 
          racing will now have the opportunity to wager on seventy-eight 
          different racing events each day before they see their very 
          first race from Los Alamitos.  This places us at a disadvantage 
          because many racing patrons might become tired of handicapping 
          races, and/or possibly have exhausted their bankroll before the 
          first live race from our racetrack is run."

           Prior legislation  :  AB 2790 (Committee on Governmental 
          Organization), Chapter 141, Statutes of 2010.  Added races that 
          are part of the race card of the Arlington Million to the list 
          of imported races not subject to the limitation of 32 races per 
          day.  
           
          SB 899 (Denham), Chapter 279, Statutes of 2010.  Deleted the 
          statewide cap on the number of out-of-country thoroughbred races 
          that a thoroughbred racing association or fair may import, 
          simulcast and on which wagers may be accepted. 

          AB 3074 (Governmental Organization Committee), Chapter 510, 
          Statutes of 2008.  Allows a harness racing association in 
          California to import all of the races conducted on Kentucky 
          Futurity day, irrespective of the six-race day limit in law and 
          increases, from 23 to 32, the limitation on the total number of 
          out-of-state Thoroughbred races that may be imported per day by 
          a Thoroughbred association or fair that is conducting a live 
          race meet.

          AB 1736 (Assembly Committee on Governmental Organization), 








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          Chapter 444, Statutes of 2007.  Adds the "Travers Stakes" to the 
          group of specific stake races which are exempt from the 23-race 
          per day limit on imported races, as specified.

          SB 379 (Denham), Chapter 443, Statutes of 2007.  Adds the Dubai 
          World Cup race to a specified list of races that would be 
          exempted from the 23-race per day limit on imported races for    
               satellite wagering in California.

          SB 590 (Perata), Chapter 936, Statutes of 2001.  Authorizes 
          Thoroughbred racing associations and fairs in the northern 
          racing zone to increase the number of imported racing simulcasts 
              available to be wagered upon if the CHRB reduces the number 
          of live racing days.

          AB 509 (Jerome Horton), Chapter 235, Statutes of 2004.  Allows a 
          Thoroughbred or fair association to distribute the audiovisual 
          signal and accept wagers on the results of out-of-country        
            Thoroughbred races during the calendar period the association 
          or fair is conducting a race meeting under specified conditions.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Del Mar Thoroughbred Club
          Fairplex Racing Association
          LA County Fair Association
          Oak Tree Racing Association

           Opposition 
           
          Los Alamitos Race Course
           

          Analysis Prepared by  :    Eric Johnson / G. O. / (916) 319-2531