BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                       AB 1303|
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                                    THIRD READING


          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 León, 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  :     Oak Tree Racing Association


           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

           SUPPORT  :   (Verified  2/13/14)

          Oak Tree Racing Association (source) 
          California Authority of Racing Fairs

           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, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier,  
            Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,  
            Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,  
            Jones-Sawyer, 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, Torres, Wagner, Weber, Wieckowski, Wilk, Williams,  
            Yamada, John A. Pérez
          NO VOTE RECORDED:  Donnelly, Holden, Logue, Waldron, Vacancy


          MW:ej:n  2/13/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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