BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2287


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          Date of Hearing:  April 20, 2016


                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION


                                  Adam Gray, Chair


          AB 2287  
          (Wilk) - As Amended March 17, 2016


          SUBJECT:  Horse racing:  satellite wagering:  out-of-country  
          thoroughbred races


          SUMMARY:  On the first Saturday in November, would allow a  
          thoroughbred racing association or fair to accept wagers on  
          out-of-country races, until 6:30 p.m., without the consent of  
          the harness or quarter horse racing association that is then  
          conducting a live racing meeting in the state.





          EXISTING LAW:  


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



          2)Provides that CHRB shall have all powers necessary to carry  
            out the purposes of the Horse Racing Law, such as adopting  
            rules and regulations to protect the public, allocating dates  








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            for and controlling horse racing and pari-mutuel wagering, and  
            enforcing all rules and regulations.  

          3)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.  

          4)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 Breeders' Cup, the Dubai Cup, or the  
            Haskell Invitational.

          5)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.

          6)Authorizes a thoroughbred racing association or fair to  
            distribute the audiovisual signal and accept wagers on the  
            results of out-of-country thoroughbred races during the  
            calendar period the association or fair is conducting a race  
            meeting, without the consent of the participating horsemen's  
            and horsewomen's organization. These imported races are  
            subject to specified conditions, including the condition that  
            a thoroughbred racing association or fair may not accept  
            wagers on out-of-country races commencing after 5:30 p.m.,  
            Pacific Standard Time, without the consent of the harness or  
            quarter horse racing association that is then conducting a  
            live racing meeting.



          FISCAL EFFECT:  Unknown









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          COMMENTS:  


           Purpose of the bill  :  According to the author's office, this  
          bill is intended to help increase the wagering handle on  
          out-of-country races on a specific day if/when the Breeders Cup  
          is hosted by a California racetrack and the live race card may  
          extend beyond 5:30 p.m.  AB 2287 would be a limited exemption  
          with the goal of increasing the overall day's total wagering  
          handle to generate more revenue for purses, breeder's awards and  
          racetrack commissions. Purses provide revenue directly to  
          horsemen (owners and trainers) through winnings of their horses;  
          purses also indirectly provide revenue to breeders.  Statistical  
          data has shown that as purses increase the expected price of a  
          buying a horse increases leading to an increase in the supply of  
          foals, yearlings and associated bloodstock (mares and  
          stallions).


          Background:  Current law limits the number of races that may be  
          imported from the United States by a thoroughbred association or  
          fair 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.  In addition, a thoroughbred racing  
          association or fair is authorized to distribute the audiovisual  
          signal and accept wagers on the results of out-of-country  
          thoroughbred races during the calendar period the association or  
          fair is conducting a race meeting, without the consent of the  
          participating horsemen's and horsewomen's organization. These  
          imported races are subject to specified conditions.


           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  








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          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 pari-mutuel 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 20 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 legislation  :  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  








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          the 50-race per day limit on imported races.


          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.   



          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.  


           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. 








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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. 


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition


          None on file




          Analysis Prepared by:Eric Johnson / G.O. / (916) 319-2531

















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