BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1303|
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CONSENT
Bill No: AB 1303
Author: Hall (D)
Amended: As introduced
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 6/11/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,
De Le�n, Galgiani, Hernandez, Lieu, Padilla
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 5/9/13 (Consent) - See last page for vote
SUBJECT : Horse racing
SOURCE : Author
DIGEST : This bill adds a new section to California Horse
Racing Law that 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.
ANALYSIS :
Existing law:
1.Provides that the California Horse Racing Board (CHRB) shall
regulate the various forms of horse racing authorized in this
state.
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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, 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 (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 the 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.
This bill adds a new section to California Horse Racing Law that
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.
Background
Pari-mutuel wagering . Means 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
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"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.
Horse racing takeout . The horse racing takeout amount is a
percentage deducted from all of the wagers before the winnings
are paid out to bettors. These takeout rates vary among states.
California's current rate is 15.95% for conventional
thoroughbred wagers (win, place, and show wagers) and 22.68% to
23.68% for exotic thoroughbred wagers (Exacta, Trifecta, and
Pick-6). The money from the takeout is used for such things as
owner purses, racing association commissions, and breeding
incentive programs. In addition, various funds receive money
from the takeout to meet specific needs of the industry. For
example, funds have been set up for offsite stabling and
transporting horses on race day, to offset the costs of workers
compensation, to establish pension plans and provide a welfare
fund for backstretch personnel, and to fund the California
Marketing Committee, which promotes horse racing.
This bill requires the publication of the takeout for every race
and every type of bet. Each racing day, racetracks sell copies
of their 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 are wagering on a specific horse
in a designated race either in California or other racing
jurisdictions. While making the wagering, different takeout
rates apply on California races versus those being contested in
other states and countries. Many racing fans are unaware of the
take-out rates for their favorite racetrack.
Comments
According to the author's office, at one time, takeout rates
used to be 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. The
author's office believes that when the Breeders' Cup is run,
those wagering in California should know what takeout rates are
being applied on the day's races. It has been reported that
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some racing fans have been under the impression that the takeout
rates were the same as the host track while others believed the
Breeders' Cup set its own. The author's office is of the
opinion that takeout rates should be available on the Internet
Web site of every racetrack and in the programs sold at
racetracks and satellite wagering facilities. Furthermore, the
author's office references the New York State Racing and
Wagering Board which requires its racetracks to publish their
takeout rates with a web link to their current statutory takeout
sections of law. The author's office emphasizes that 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
ASSEMBLY FLOOR : 75-0, 5/9/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Linder, Lowenthal, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone,
Ting, Torres, Wagner, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. P�rez
NO VOTE RECORDED: Donnelly, Holden, Logue, Waldron, Vacancy
MW:ej 6/26/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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