BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 432|
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THIRD READING
Bill No: AB 432
Author: V. Manuel Pérez (D)
Amended: 6/19/13 in Senate
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 6/11/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,
De León, Galgiani, Hernandez, Lieu, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 73-0, 5/20/13 - See last page for vote
SUBJECT : Horse racing: exchange wagering
SOURCE : California Thoroughbred Breeders Association
DIGEST : This bill requires any racing association or racing
fair receiving distributions from any exchange wagering
agreement to distribute a specified portion of that revenue to
the official registering agency, which is required to distribute
those revenues in a specified manner.
ANALYSIS :
Existing law:
1. Stipulates that the California Horse Racing Board (CHRB)
shall regulate the various forms of horse racing authorized
in this state and directs the CHRB to promulgate rules and
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regulations governing the conditions under which exchange
wagering may be conducted, including requiring an annual
audit of an exchange wagering licensee. Authorizes the CHRB
to recover any costs associated with the licensing or
regulation of exchange wagering by imposing an assessment on
the exchange wagering licensee in an amount that does not
exceed the reasonable costs associated with the licensing or
regulation of exchange wagering.
2. Allows exchange wagers to be submitted and accepted by
licensed exchange wagering systems in the same manner as is
currently provided for under Advanced Deposit Wagering Law.
Provides that no exchange wagering licensee may accept wagers
prior to May 1, 2012. Defines "exchange wagering" as a form
of parimutuel wagering in which two or more persons place
identically opposing wagers in a given market, and 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 the 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.
3. Includes provisions similar to Advanced Deposit Wagering Law
relative to supporting the contracting rights of pari-mutuel
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.
4. Provides that any association conducting a race meeting that
includes thoroughbred racing shall deposit, at specified
intervals, with the official registering agency 0.54 % of the
total handled on-track in daily conventional and exotic
parimutuel pools resulting from thoroughbred wagers made in
the state. After deducting a sum equal to 5% of the
aforementioned and total deposits made from out of state
wagers, the amount to compensate the official registering
agency for its administrative costs and for expenses it
incurs for educational, promotional, and research programs,
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the official registering agency is required to distribute
annually the balance of the deposits as follows: (a) 10% to
the California-bred race fund to help promote California-bred
races; (b) of the remaining balance a deduction for the
purpose of owner premiums; and (c) a 15% deduction for the
California-bred bonus program to be used for the payment of
bonuses to California-bred horses in maiden allowance races
in the state. Funds remaining after the above distributions
must be distributed as follows: (a) 75% to the breeder fund
from which breeder awards are to be paid and (b) 25% to the
stallion fund from which stallion awards are to be paid.
This bill requires any racing association or racing fair
receiving distributions from any exchange wagering agreement to
distribute a specified portion of that revenue to the official
registering agency, which is required to distribute those
revenues in a specified manner.
Background
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.
As noted above, existing law requires the CHRB to promulgate
administrative rules and regulations to effectuate exchange
wagering. At its November 2012 regular meeting the CHRB adopted
the proposed addition of Article 27 (Exchange Wagering), which
comprises 25 regulations governing the conduct of exchange
wagering in California. The exchange wagering rulemaking file
was submitted to the Office of Administrative Law (OAL) on
January 31, 2013. Two months later (March 31, 2013) OAL
disapproved the file. Of the 25 regulations submitted, the OAL
cited necessity, clarity or consistency issues with eight
regulations, as well as certain procedures of the Administrative
Procedures Act. The CHRB has 120 days from the date of the
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disapproval to correct and resubmit the rulemaking file.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/24/13)
California Thoroughbred Breeders Association (source)
ARGUMENTS IN SUPPORT : The author's office states that when
exchange wagering was authorized by the Legislature in 2010 (SB
1072, Calderon, Chapter 283), the enabling legislation lacked
clarity pertaining to the allotment of exchange wagering
revenues for California's Thoroughbred breeders. The author's
office states, that this bill simply clarifies that should
exchange wagering be implemented in California under Business
and Professions Code Section 19617.2, California Thoroughbred
breeders will not see a reduction in breeder, owner and stallion
owner incentives.
ASSEMBLY FLOOR : 73-0, 5/20/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Buchanan,
Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hernández, Jones, Levine,
Linder, Lowenthal, Maienschein, Mansoor, Medina, Melendez,
Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, John A. Pérez
NO VOTE RECORDED: Brown, Holden, Jones-Sawyer, Logue, Yamada,
Vacancy, Vacancy
MW:k 6/25/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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