BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                       Bill No:  SB  
          819
          
                 SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                       Senator Roderick D. Wright, Chair
                           2013-2014 Regular Session
                                 Staff Analysis

          SB 819  Author:  Committee on Governmental Organization
          As Introduced:  March 14, 2013
          Hearing Date:  April 23, 2013
          Consultant:  Art Terzakis

                                         
                                    SUBJECT  
          Breeders' Cup World Championship Series: payment of purses 

                                   DESCRIPTION
           
          SB 819 modifies an existing provision of Horse Racing Law  
          that requires certain purse account funds be used to  
          promote and support the Breeders' Cup by expanding the use  
          of those funds to include the "payment of purses in  
          Breeders' Cup Championship races."  

                                   EXISTING LAW

          Article IV, Section 19(b) of the Constitution of the State  
          of California provides that the Legislature may provide for  
          the regulation of horse races and horse race meetings and  
          wagering on the results.

          Existing law provides that the California Horse Racing  
          Board (CHRB) shall regulate the various forms of horse  
          racing authorized in this state.

          Existing law generally provides for the distribution of  
          funds collected from wagers on horse racing in California.   
          In years that the Breeders' Cup Championship series is  
          conducted at a race meeting in California, the law requires  
          that specified amounts that would have otherwise been  
          distributed to a purse account be made available to promote  
          and sponsor the Breeders' Cup.

                                    BACKGROUND
           




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           Purpose of SB 819:   Currently, Horse Racing Law (Section  
          19605.74 of the Business and Professions Code) requires the  
          thoroughbred racing association (in this case, Santa Anita)  
          hosting the Breeders' Cup to set-aside and make available  
          certain monies generated from handle on days during which  
          Breeders' Cup races are conducted in California for the  
          purpose of "promoting and supporting" the Breeders' Cup.   
          SB 819 would specify that promoting and supporting the  
          Breeders' Cup includes the "payment of purses in Breeders'  
          Cup Championship races" as a purpose of the funds.  This  
          measure is simply intended to improve the business climate  
          for horse racing in California and to encourage the  
          organization operating this prestigious international event  
          to make California its permanent home.  
           Arguments in Support:   Proponents reference the fact that  
          the first ever Breeders' Cup was held at Hollywood Park  
          racetrack in 1984 and from that day forward California has  
          played an important role in establishing the Breeders' Cup  
          as the culmination of the thoroughbred-racing season and  
          the multi-million dollar world renowned event it is today.   
          Santa Anita racetrack hosted nearly 90,000 fans during the  
          2012 Breeders' Cup World Championships.  Santa Anita will  
          also be hosting the 2013 Breeders' Cup Championships which  
          will mark the 10th time that the Breeders' Cup has been  
          held in the Golden State. 

           Comments:   It is a well-known fact that the California  
          horse racing industry is in distress and has lost favor  
          with the public, primarily due to competition with other  
          forms of gambling and declining popularity of its own  
          product. Yet the horse racing industry in this state  
          remains an important segment of the economy, generating by  
          some estimates almost 50,000 jobs.  

          The State of California is in competition with several  
          other states to be the permanent home of the Breeders' Cup,  
          which is actively looking at a permanent host location as a  
          potential option as part of its ongoing strategic planning  
          initiative.  Experts within the industry believe that  
          locating the Breeders' Cup on a permanent basis in  
          California would generate $60 million in economic output  
          and create hundreds of direct and indirect jobs.
           
          This proposal is intended to help California attract the  
          world's best horses, trainers and owners to participate in  
          the Breeders' Cup World Championships and make California  




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          an attractive site for future editions of the richest two  
          days in sports.

                            PRIOR/RELATED LEGISLATION
           
           SB 1072 (R. Calderon), Chapter 238, Statutes of 2010.    
          Among other things, authorized the CHRB to license entities  
          to operate "exchange wagering" systems, as defined, which  
          accept exchange wagers from individuals residing either  
          within or outside of this state on horse races run in  
          California or other states.  Also, provided that monies  
          that would have been otherwise distributed to a purse  
          account from the increased takeout on Breeders' Cup day(s)  
          shall be available for the purpose of promoting and  
          sponsoring the Breeders' Cup.  Additionally, required the  
          host track of the Breeders' Cup to enter into a written  
          agreement with the Breeders' Cup, LTD, in consultation and  
          cooperation with the California Tourism Commission and the  
          statewide marketing organization relative to the manner in  
          which the funds set aside to support and promote the  
          Breeders' Cup are to be expended.
           
          SUPPORT:   As of April 19, 2013:  

          Breeders' Cup Limited

           OPPOSE:   None on file as of April 19, 2013.

           FISCAL COMMITTEE:   No.

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