BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1423 (Hall) - Horse Racing
Amended: As Introduced Policy Vote: GO 11-0
Urgency: No Mandate: No
Hearing Date: August 12, 2013
Consultant: Maureen Ortiz
This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 1423 requires advanced deposit wagering funds
that are currently being held in a trust by the California
Exposition and State Fair (Cal Expo) to be distributed between
the harness racing horsemen and Cal Expo as specified.
Additionally, the bill clarifies the timeframe for the
distribution of exchange wagering revenues that provide health
and welfare benefits to jockeys.
Fiscal Impact:
Distribution of approximately $150,000 as follows: 50% to
specified horsemen and 50% to Cal Expo (Trust Fund)
Background: Existing law requires a certain percentage of
amounts distributed on advance deposit wagers for harness racing
meetings to be deducted and distributed to a welfare fund
established for the benefit of horsemen and backstretch
personnel, and for any amounts remaining to be utilized for the
benefit of horsemen pursuant to a written agreement between the
racing association that conducts the live harness race meeting
and the organization representing the horsemen, as specified.
Existing law further directs the California Horse Racing Board
(CHRB) to promulgate rules and regulations governing the
conditions under which exchange wagering may be conducted and
allows exchange wagers to be submitted and accepted by licensed
exchange wagering systems in the same manner as is currently
provided for under the Advanced Deposit Wagering Law. Exchange
wagering is a relatively new form of wagering which was
introduced in the United Kingdom in 2000. Exchange wagering
account holders may buy, sell, or "back" and "lay" the outcome
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of horse races in a manner much like day trading on the stock
exchange. Exchange wagering is a form of pari-mutuel wagering
in which two or more persons place identically opposing wagers
in a given market. However, as of this date, exchange wagering
has not yet been implemented and is still pending the approval
of CHRB regulations.
Existing law additionally requires that a specific amount of
exchange wagering revenues be distributed to provide health and
welfare benefits to jockeys annually until January 2, 2021.
Proposed Law: AB 1423 specifies that funds generated that were
deducted from amounts handled on advance deposit wagering at
harness race meetings which are currently held in trust by Cal
Expo shall be distributed in the following manner: 50% as
purses to the harness racing horsemen who participated in the
meeting that concluded on June 16, 2012; and 50% to Cal Expo in
the form of commissions.
AB 1423 also deletes the January 1, 2021 sunset date for the
distribution of the revenue collected through exchange wagering
for health and welfare benefits to jockeys and instead sunsets
the provisions after the 10th annual distribution of those
funds.
Staff Comments: AB 1423 is intended to correct an oversight in
existing Horse Racing Law governing the distribution of funds
from advanced deposit wagering for harness racing at Cal Expo.
Existing law provides that money generated at harness racing
meetings which are being held in trust by Cal Expo must be
distributed in accordance with specified percentages to the
harness horsemen who ran horses at the 2012 race meeting and to
Cal Expo. However, the statute requires the funds to be
distributed to the Jockeys' Guild Welfare Fund, even though
harness drivers are not a beneficiary of that fund.
Consequently, the money has been held in a trust at Cal Expo and
has not yet been distributed. AB 1423 will authorize the
correct distribution of the money as originally intended and
will essentially clarify existing law to allow for the
distribution of funds that are being held in trust because
current law does not provide a clear method of distribution.
Additionally, AB 1423 will ensure that distributions from
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exchange wagering revenue continue for a period of 10 years
after the implementation of exchange wagering to provide health
and welfare benefits to jockeys as was originally intended.