BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 2226 Hearing Date: 6/28/2016
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|Author: |Bigelow |
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|Version: |2/18/2016 Introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Arthur Terzakis |
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SUBJECT: Horse racing: satellite wagering facilities: fairs
DIGEST: This bill authorizes a fair to contract with two or
more fairs that are licensed to conduct thoroughbred meetings
within the northern zone for the operation and management of a
satellite wagering facility.
ANALYSIS:
Existing law:
1)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.
2)Grants the California Horse Racing Board (CHRB) the authority
to regulate the various forms of horse racing authorized in
this state.
3)Authorizes the CHRB to permit licensed racing associations,
fairs and mini-satellite licensees to operate satellite
wagering facilities.
4)Authorizes the CHRB to approve the establishment of 15
mini-satellite wagering sites in each zone (for a total of 45)
and defines "mini-satellite wagering site" to mean a location
where satellite wagering may be conducted, with the approval
AB 2226 (Bigelow) Page 2 of ?
of the CHRB, provided that the wagering occurs in an area that
is restricted to those who are 21 years of age or older.
5)Specifies that no mini-satellite site may be located within 20
miles of a race track, a satellite wagering facility, or a
tribal casino that has a satellite wagering facility without
the consent of each facility within a 20-mile radius.
This bill makes a minor change to the state's Horse Racing Law
regarding the licensing and location of satellite wagering
facilties by clarifying two fairs may enter into an agreement or
partnership to establish a satellite facility within the
northern zone.
Background
Brief history and background. California has allowed off-track
betting in satellite wagering facilities located at fairs and
racing associations throughout the state for over 30 years.
Satellite wagering 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 would expose and market horse racing to
potential customers and also make it far more convenient for
existing patrons to wager more often.
Currently, there are 28 satellite wagering facilities in
California - five of the facilities are at privately operated
racetracks, five at fairs that conduct live racing, fourteen at
county fairs and district agricultural associations, and four on
Indian lands. Simulcast-only facilities do not have live
racing. Those facilities accept wagers on races broadcast via
simulcast from in-state and out-of-state racetracks.
In 2007, AB 241 (Price) was enacted to authorize the creation of
15 "mini-satellites" in each racing zone for a total of 45. The
stated intent of this legislation was to make the sport of horse
racing even more accessible to potential California bettors and
to increase the handle - the amount wagered on horse races. To
date, ten mini-satellite facilities have been licensed
statewide.
California's Horse Racing Law requires the CHRB to issue a
license to a mini-satellite facility for two years, and then
review the operation and the size of the handle, and determine
AB 2226 (Bigelow) Page 3 of ?
if it is in the best interest of horse racing to relicense the
facility or, in the alternative, license another mini-satellite
facility that might generate a greater handle. If there are
more than 15 applications for mini-satellite wagering facilities
in any zone, the CHRB must determine which facilities will
generate the largest handle, and give priority to the approval
of those facilities.
California's Horse Racing Law makes it explicit that no
mini-satellite site may be located within 20 miles of a race
track, a satellite wagering facility, or a tribal casino that
has a satellite wagering facility without the consent of each
facility within a 20-mile radius.
Purpose of AB 2226. According to the author's office, there are
a few locations in California where the 20-mile radius
exclusion-zone of multiple fairs overlap. One such example is
San Francisco and it falls within the exclusion zones of both
the Alameda County Fair and the San Mateo County Fair. Under
current law, fairs can partner with one or more racing
associations that are licensed to conduct thoroughbred meetings
within the northern zone for the operation of a satellite
wagering facility. However, current law does not authorize two
or more fairs to establish a partnership for the management of a
satellite facility. This bill is intended to make it possible
for Alameda and San Mateo to enter into such a joint-venture
agreement for the purpose of establishing a CHRB licensed
mini-satellite facility in San Francisco. Such a mini-satellite
facility could be established in a restaurant, bar, club, etc.
Prior/Related Legislation
AB 270 (Perea, Chapter 393, Statutes of 2011) created an
exception to Horse Racing Law by authorizing a fair satellite
wagering facility to elect not to be subject to the requirements
related to a "satellite facility supervisor" if the board of
directors of the fair, after a public hearing, deems those
requirements to be not economically feasible.
SB 305 (Calderon, Chapter 334, Statutes of 2011) modified a
provision of Horse Racing Law that requires the CHRB to license
mini-satellite facilities for two years and instead directed the
CHRB to license such facilities for up to five years.
SB 1439 (Price, 2010) would have decreased the exclusion zone in
AB 2226 (Bigelow) Page 4 of ?
which a mini-satellite horse racing wagering facility can be
situated in proximity to an existing horse racing satellite
wagering facility or live horse racing race track from a 20 to
15 mile radius. (Failed passage on Senate floor)
AB 2215 (Fuentes, Chapter 255, Statutes of 2010) among other
things, authorized a mini-satellite wagering facility to enter
into an agreement with an advance deposit wagering (ADW)
provider to accept and facilitate the placement of any wager at
its facility that a California resident could make through that
ADW provider.
SB 16xx (Ashburn, Chapter 12, Statutes of 2009-10 Second
Extraordinary Session) among other things, provided that
beginning on July 1, 2009, and annually thereafter, $32 million
shall be appropriated from the state's General Fund and paid
into the Fair and Exposition Fund for the financial support of
the network of California fairs.
AB 246 (Price, Chapter 226, Statutes of 2009) authorized a
quarter horse association and a harness racing association to
deduct up to 2% more from the total amount wagered in the
parimutuel pool for any type of wager, and, specified how the
funds shall be distributed to eligible satellite wagering
facilities, owner's purses and racetrack commissions
AB 241 (Price, Chapter 594, Statutes of 2007) authorized all
fairs to operate a satellite wagering facility off of the fair
grounds. Also, authorized the establishment of up to 45
mini-satellite wagering sites to be operated by private industry
throughout California.
AB 1286 (Richardson, Chapter 202, Statutes of 2007) allowed the
Alameda County Fair and the Los Angeles County Fair (Fairplex)
to obtain authorization to operate new satellite wagering
facilities off of their fair grounds under certain conditions.
SB 677 (Murray, 2005) would have authorized the establishment of
seven additional satellite wagering facilities. (Died Assembly
Inactive File)
SB 1096 (Dutton, Chapter 1096, Statutes of 2005) authorized the
National Orange Show (San Bernardino County) to operate a second
satellite wagering operation within its fair district
boundaries.
AB 2226 (Bigelow) Page 5 of ?
AB 401 (J. Horton, Chapter 556, Statutes of 2003) permitted
Cal-Expo, with the approval of the Department of Food and
Agriculture and CHRB, to operate a satellite wagering facility
within the boundaries of Cal-Expo in addition to any facility
otherwise authorized under current law.
SB 14 (Maddy, Chapter 1273, Statues of 1987) expanded satellite
wagering statewide.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
California Authority of Racing Fairs (sponsor)
OPPOSITION:
None received