BILL ANALYSIS Ó
AB 1303
Page 1
Date of Hearing: April 10, 2013
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Hall III, Isadore, Chair
AB 1303 (Hall) - As Introduced: February 22, 2013
SUBJECT : Horse racing: takeouts: disclosure to patrons.
SUMMARY : Requires each racing association or fair to inform
patrons, through the official program, of the takeout being
applied to the handle for the racing meeting.
EXISTING LAW :
1) Provides that the California Horse Racing Board (CHRB) shall
regulate the various forms of horse racing authorized in this
state.
2) Provides that "pari-mutuel wagering" is a form of wagering
in which bettors either purchase tickets of various
denominations, or issue wagering instructions leading to the
placement of wagers, on the outcome of one or more horse races.
When the outcome of the race or races has been declared
official, the association distributes the total wagers
comprising each pool, less the amounts retained for purposes
specified in this chapter, to winning bettors.
3) Requires racing associations to pay out certain percentages
of the total amount wagered and of the portion deducted from the
pari-mutuel pool (i.e., the takeout), for regulation, owner
purses, racing association commissions, and breeding incentive
programs. The amounts vary depending upon the type of breed bet
upon (Thoroughbred, Quarter Horse, harness, etc.), the type of
bet made (e.g., conventional or exotic), and whether the wager
was made on-track or at a satellite wagering facility.
4) Provides that a thoroughbred association or fair subject to
approval by the CHRB), may deduct from the total amount handled
in the pari-mutuel pool for any type of wager, an amount of not
less than 10% nor more than 25% at the joint request of the
thoroughbred association or fair and the horsemen's organization
for the meeting of the thoroughbred association or fair
accepting the wager.
5) Permits CHRB to set the deduction for any new type of wager
AB 1303
Page 2
introduced after January 1, 2004, in an amount of not less than
10% nor more than 30% at the joint request of an association or
fair and the horsemen's organization.
FISCAL EFFECT : Unknown.
COMMENTS :
Background : Pari-Mutuel Wagering means, literally, a mutuel
wager or "betting among ourselves." All the money that is
wagered worldwide on a particular race and bet is put into a
separate electronic pool. The race track where the race is being
conducted is merely a broker for the transaction and deducts a
fixed commission or "takeout" from that pool. The takeout is
retained by the track and a percentage of it becomes "purse
money," the money for which the horses compete. The racetrack
has no fiscal interest in the actual "official" order finish of
a race. The track's share (the takeout) remains the same no
matter who wins a particular race.
Purpose of this bill : According to the author, the takeout is
the amount deducted from wagers before winnings are paid out to
bettors. The state, racetracks, breeders, and horsemen through
purses, receive a distribution from the takeout.
Each racing day, California racetrack sell copies of its
official racing program, detailing relevant information about
each race (e.g., ages of horses, names of jockeys, trainers).
Racing fans use the program when placing their bets so they can
be sure that they're wagering on a specific horse in a
designated race either in California or other racings
jurisdictions. While making the wagering, different takeout
rates apply on California races versus those being contested in
other states and countries.
The author points out that many racing fans are unaware of the
takeout rates for their favorite racetrack. At one time,
takeout rates were included in past performances but that is not
necessarily the case anymore with the influx of intra-state and
out-of-state simulcasting added to the daily wagering menu.
For instance, when the Breeders' Cup is run each year,
California horseplayers should know what takeout rates are being
applied on the day's races. It has been reported, that some
racing fans have been under the impression that the takeout
AB 1303
Page 3
rates are the same as the host track while others believe the
Breeders' Cup sets its own.
The author states, what is the big secret? Takeout rates should
be available on the website of every racetrack and in the
programs sold at racetracks and satellite wagering facilities.
The author further points out that the New York State Racing &
Wagering Board requires its racetracks to publish their takeout
rates with a web link to the current statutory takeout sections
of law.
The author believes that ultimately, racing's patrons drive the
pari-mutuel market and their response to an advertised takeout
on any type of wager might induce the ultimate rate of takeout
which might not only increase daily wagering handle but lead to
a stronger and healthier industry.
Prior/related legislation : SB 1072 (Ron Calderon), Chapter 283,
Statutes of 2010. The bill made substantive changes and
additions to California's Horse Racing Law. One of additions
required Thoroughbred racing associations and fairs to deduct
(Takeout) an additional amount of the total handle on exotic
wagering (e.g., exacta, trifecta, and superfecta) for purse
augmentation.
SB 517 (Florez), Chapter 636, Statutes of 2009. Allows a
Thoroughbred association or fair, subject to CHRB, to alter the
amount deducted from horse racing wagering. Allows the
distribution of funds from the amount deducted to be modified or
redirected, subject to the approval of CHRB.
SB 766 (Negrete McLeod), Chapter 616, Statutes of 2009. Allows
uncommitted surplus funds in the CMC Fund or the horse racing
Workers' Compensation Fund, to be reallocated to any other fund
or account created pursuant to the Horse Racing Law.
AB 1308 (Torrico), Chapter 410, Statutes of 2007. Authorizes a
Thoroughbred association or fair and the horsemen's
organization, subject to approval by CHRB, to deduct an amount
of not less than 10% nor more than 25% from the pari-mutuel pool
for any type of wager.
AB 2869 (Horton), Chapter 924, Statutes of 2002. Allowed CHRB
to authorize a racing association and the organization
AB 1303
Page 4
representing horsemen to reduce the portion deducted from the
pari-mutuel pool for purses and commissions, provided that the
change only affected funds available for purses and commissions.
AB 388 (Strickland), Chapter 174, Statutes of 2003. Permits
CHRB to set the deduction for any new type of wager introduced
after January 1, 2004, in an amount of not less than 10% nor
more than 30% at the joint request of an association or fair and
the horsemen's organization.
SB 103 (Maddy), Chapter 10, Statutes of 1998. Requires any
association, including fairs, that conducts thoroughbred racing
to pay to the owners' organization contracting with the
association an additional percentage for a national marketing
program, as specified, to promote thoroughbred racing unless the
owners' organization chooses not to contribute to the program.
The bill sunsets January 1, 2004.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531