BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           AB 650           Hearing Date:    6/9/2015
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          |Author:    |Perea                                                |
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          |Version:   |2/24/2015    Introduced                              |
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          |Urgency:   |No                     |Fiscal:      |No              |
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          |Consultant:|Arthur Terzakis                                      |
          |           |                                                     |
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          SUBJECT: Horse racing: out-of-state thoroughbred races: Blue  
          Grass Stakes.


          DIGEST:    This bill adds the full card of races originating  
          from Keeneland Racecourse in Lexington, Kentucky, on "Blue Grass  
          Stakes" day, to the group of stakes races in Horse Racing Law  
          which are exempt from the 50-race per day limit on imported  
          races.

          ANALYSIS:
          
          Existing law:

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

          2)Limits the number of races that may be imported by  
            associations and fairs to no more than 50 races per day on  
            days when live thoroughbred or fair racing is being conducted  
            in this state, with specified exceptions.  

          3)Exempts from that 50 race per day limit races imported that  
            are part of the race card of certain prominent races,  
            including the Kentucky Derby, the Kentucky Oaks, the Preakness  
            Stakes, the Belmont Stakes, the Jockey Club Gold Cup, the  
            Travers Stakes, the Arlington Million, the Breeders' Cup, the  
            Dubai Cup, the Arkansas Derby, the Apple Blossom Handicap or  







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            the Haskell Invitational.

          4)Authorizes thoroughbred racing associations or fairs to  
            distribute the audiovisual signal and accept wagers on the  
            results of out-of-state and international thoroughbred races  
            during the calendar period the association or fair is  
            conducting live racing, including days on which there is no  
            live racing being conducted by the association or fair.



          This bill adds the "Blue Grass Stakes " to the group of stakes  
          races in Horse Racing Law which are exempt from the 50-race per  
          day limit on imported races.

          Background
          
          Blue Grass Stakes. The Blue Grass Stakes, currently known as the  
          Toyota Blue Grass Stakes due to sponsorship by the Toyota Motor  
          Corporation, is an American Grade 1 horse race for 3-year old  
          thoroughbreds held annually in April at Keeneland Racecourse in  
          Lexington, Kentucky.  The race is named for the Bluegrass region  
          of Kentucky, characterized by grass having bluish-green culms,  
          which is known as the "heart" of the thoroughbred racing  
          industry.  First run at the Kentucky Association track in  
          Lexington in 1911, the Blue Grass has, from its inception,  
          served as an important prep race for the Kentucky Derby.  The  
          race is run at a distance of nine furlongs (1-1/8 miles) on  
          dirt.

          Purpose of AB 650.  This bill provides that all races imported  
          by a thoroughbred association or fair that are part of the race  
          card of the overall Blue Grass Stakes day would be exempted from  
          the 50-race per day limit, as defined in current law.  Over the  
          years, this law has been amended to allow specific notable races  
          to be imported outside of this cap for promotional and financial  
          reasons.

          The author's office notes that this bill is intended to help  
          increase public interest and participation at California  
          racetracks and satellite wagering facilities.  The satellite  
          importation of this historic and prestigious race will allow  
          California racetracks to remain competitive, increase the  
          wagering handle on this specific race day and will lead to  
          increased purses, racetrack revenue, and breeders' awards in  








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          this state.

          Satellite Wagering.  Satellite wagering via an off-track  
          facility has been legal in California since 1985.  It was  
          authorized at a time when California racetracks were beginning  
          to experience declining attendance and handle figures.  The  
          industry believed that making the product easier to access not  
          only would expose and market horse racing to potential  
          customers, but also would make it more convenient for the  
          existing patrons to wager more often.
           
           Simulcasting.  Simulcasting is the process of transmitting the  
          audio and video signal of a live racing performance from one  
          facility to a satellite for re-transmission to other locations  
          or venues where parimutuel wagering is permitted.  Simulcasting  
          provides racetracks with the opportunity to increase revenues by  
          exporting their live racing content to as many wagering  
          locations as possible, such as other racetracks, fair satellite  
          facilities and Indian casinos.  Revenues are increased because  
          simulcasting provides racetracks that export their live content  
          with additional customers in multiple locations who would not  
          have otherwise been able to place wagers on the live racing  
          event.

          Racetrack Attendance.  Over the past 25 years the industry has  
          witnessed a general decline in the number of people attending  
          and wagering at live horse racetracks in California due to a  
          number of factors, including increased competition from other  
          forms of gaming, unwillingness of customers to travel a  
          significant distance to racetracks and the availability of  
          off-track wagering. The declining attendance at live horse  
          racing events has prompted racetracks to rely on revenues from  
          in-state and out-of-state satellite wagering and account  
          wagering. 

          Prior/Related Legislation
          
          SB 187 (Hall, 2015) adds the "Wood Memorial" to the group of  
          stakes races in Horse Racing Law which are exempt from the  
          50-race per day limit on imported races.  (Pending in Assembly  
          policy committee)

          AB 1295 (Gray, 2015) provides that the limitation of 50 imported  
          races per day does not apply to races imported into the combined  
          central and southern zones when there is live thoroughbred or  








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          fair racing being conducted in those zones but no live  
          thoroughbred or fair racing is being conducted in the northern  
          zone.  (Pending in this committee) 

          AB 364 (Gipson, 2015) adds the "Belmont Derby Invitational" to  
          the group of races in Horse Racing Law which are exempt from the  
          50-race per day limit on imported races.  (Pending in this  
          Committee)

          AB 2655 (Hall, Chapter 149, Statutes of 2014) added the "Apple  
          Blossom Handicap" to the group of stakes races in Horse Racing  
          Law which are exempt from the 50-race per day limit on imported  
          races.

          AB 2693 (Governmental Organization, Chapter 350, Statutes of  
          2012), among other things, added the "Arkansas Derby" to the  
          group of stakes races in Horse Racing Law which are exempt from  
          the 50-race per day limit on imported races.
           
           AB 2520 (Hall, Chapter 347, Statutes of 2012) increased the  
          number of races quarter or harness racing associations are  
          allowed to import for simulcast wagering purposes from eight to  
          ten per day on live racing days.  
           
           AB 707 (Garrick, Chapter 84, Statutes of 2011) increased from 32  
          to 50, the limitation on the total number of out-of-state  
          thoroughbred races that may be imported per day by a  
          thoroughbred association or fair that is conducting a live race  
          meet with approval by the CHRB.  
           
           AB 2790 (Governmental Organization, Chapter 141, Statutes of  
          2010) added the "Arlington Million" to the list of imported  
          races not subject to the limitation of 32 races per day.
           
           SB 899 (Denham, Chapter 279, Statutes of 2010) deleted the  
          statewide cap on the number of out-of-country thoroughbred races  
          that a thoroughbred racing association or fair may import,  
          simulcast, and on which wagers may be accepted statewide in any  
          given year.  
           
           AB 136 (Silva, Chapter 221, Statutes of 2009) deleted the  
          limitation on the total number of out-of-state or out-of-country  
          harness or quarter horse races that may be imported in a  
          calendar year by a harness or quarter horse racing association.   









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          AB 763 (Chesbro, Chapter 122, Statutes of 2009) authorized the  
          Humboldt County Fair to offer satellite wagering on eight  
          out-of-state races during the August days when the fair is  
          offering live racing, if specified conditions are met.  

           AB 2048 (Silva, Chapter 439, Statutes of 2008), among other  
          things, increased by two (from six to eight) the number of races  
          that a harness and quarter horse racing association could import  
          on live racing days from out-of-state and out-of-country  
          locations. 
           
           AB 3074 (Governmental Organization, Chapter 508, Statutes of  
          2008) authorized the CHRB to allow harness racing tracks to  
          accept wagers during the Kentucky Futurity and increased from 23  
          to 32 the total number of thoroughbred races that may be  
          imported statewide for satellite wagering by associations or  
          fairs. 
           
           SB 379 (Denham, Chapter 443, Statutes of 2007) added the "Dubai  
          World Cup" to a specified day of races that would be exempted  
          from the 23-race day limit on imported races for satellite  
          wagering. 
           
           AB 241 (Price, Chapter 594, Statutes of 2007), among other  
          things, authorized all fairs to operate a satellite wagering  
          facility off of the fair grounds.  In addition, authorized the  
          establishment of up to 45 "mini-satellite" wagering sites to be  
          operated by private industry throughout the state. 

          AB 765 (Evans, Chapter 613, Statutes of 2007) among other  
          things, reauthorized horse racing's Advance Deposit Wagering  
          law, which was due to "sunset" on January 1, 2008.
           
           AB 1736 (Governmental Organization, Chapter 444, Statutes of  
          2007) added the "Travers Stakes" to a specified day of races  
          that would be exempted from the 23-race day limit on imported  
          races for satellite wagering. 

          SB 1183 (Margett, Chapter 232, Statutes of 2004) authorized a  
          harness racing association that is conducting a live race  
          meeting to accept wagers on the full card of races conducted by  
          another racing association on the day the other racing  
          association conducts the Breeders Crown Stakes, the Meadowlands  
          Pace, the Hambletonian or the North American Cup.








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           AB 509 (Jerome Horton, Chapter 235, Statutes of 2004) allowed a  
          thoroughbred racing association or fair to import the  
          audiovisual signal, and accept wagers on, the results of  
          out-of-country thoroughbred races. 

          AB 471 (Hertzberg, Chapter 198, Statutes of 2001), among other  
          things, allowed a California resident to wager on races  
          (including most out-of-state racetracks) using the phone,  
          Internet or other electronic media.
           
           AB 2760 (Wesson, 2000) would have established a backstretch  
          employee labor relations process, as specified, and authorized  
          the CHRB to permit racing associations to accept advanced  
          deposit wagers, as defined.  (Vetoed by the Governor on the  
          basis that allowing wagering via the Internet and telephone  
          would be a major change in the status quo and a significant  
          expansion of gambling.)
           
           SB 27 (Maddy, Chapter 335, Statutes of 1998), among other  
          things, authorized wagering on the results of out-of-state  
          thoroughbred races provided that the total number accepted  
          statewide in any given year does not exceed the total number of  
          thoroughbred races on which wagers were accepted in 1998.  Also,  
          capped the total number of thoroughbred races imported at 23 per  
          day. 

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             No           Local:          No


            SUPPORT:  

          California Authority of Racing Fairs

          OPPOSITION:

          None received