BILL NUMBER: AB 1289	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Price

                        FEBRUARY 23, 2007

   An act to amend Section 19604 of the Business and Professions
Code, relating to horse racing.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1289, as introduced, Price. Advance deposit wagering:
out-of-state providers.
   Existing law authorizes advance deposit wagering to be conducted,
with the approval of the California Horse Racing Board. Under
existing law, advance deposit wagering is defined as a form of
parimutuel wagering in which a person residing within California or
outside of the state establishes an account with a licensee,
board-approved betting system, or multijurisdictional wagering hub
located within California or outside of the state.
   This bill would remove from that definition, and from all
provisions related to the authorization of advance deposit wagering,
the reference to a multijurisdictional wagering hub located outside
of the state.
   Under existing law, in order for a licensee, betting system, or
multijurisdictional wagering hub to be approved by the board to
conduct advance deposit wagering, it must meet certain requirements.
   This bill would add to those requirements that the employees who
operate and administer the advance deposit wagering on a daily basis
shall work in California.
   Under existing law, the provisions relating to advance deposit
wagering will be repealed on January 1, 2008.
   This bill would delay the repeal date until January 1, 2011.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 19604 of the Business and Professions Code is
amended to read:
   19604.  Notwithstanding any other provision of law, in addition to
parimutuel wagering otherwise authorized by this chapter, advance
deposit wagering may be conducted upon approval of the board. The
board may authorize any racing association or fair, during the
calendar period it is licensed by the board to conduct a live racing
meeting in accordance with the provisions of Article 4 (commencing
with Section 19480), to accept advance deposit wagers or to allow
these wagers through a betting system or a multijurisdictional
wagering hub in accordance with the following:
   (a) Racing associations and racing fairs may form a partnership,
joint venture, or any other affiliation in order to further the
purposes of this section.
   (b) As used in this section, "advance deposit wagering" means a
form of parimutuel wagering in which a person residing within
California or outside of this state establishes an account with a
licensee, a board-approved betting system, or a board-approved
multijurisdictional wagering hub located within California 
or outside of this state  , and subsequently issues wagering
instructions concerning the funds in this account, thereby
authorizing the entity holding the account to place wagers on the
account owner's behalf. An advance deposit wager may be made only by
the entity holding the account pursuant to wagering instructions
issued by the owner of the funds communicated by telephone call or
through other electronic media. The licensee, a betting system, or a
multijurisdictional wagering hub shall ensure the identification of
the account's owner by utilizing methods and technologies approved by
the board. Further, at the request of the board, any licensee,
betting system, or multijurisdictional wagering hub located in
California  , and any betting system or multijurisdictional
wagering hub located outside of this state that accepts wagering
instructions concerning races conducted in California or accepts
wagering instructions from California residents,  shall
provide a full accounting and verification of the source of the
wagers thereby made, including the zone and breed, in the form of a
daily download of parimutuel data to a database designated by the
board. Additionally, when the board approves a licensee, a betting
system, or a multijurisdictional wagering hub  , whether
 located within California  or outside of this
state,  to accept advance deposit wagering instructions on
any race or races from California residents, the licensee, betting
system, or multijurisdictional wagering hub may be compensated
pursuant to a contractual agreement with a California licensee, in an
amount not to exceed 6.5 percent of the amount handled on a race or
races conducted in California, and in the case of a race or races
conducted in another jurisdiction, may be compensated in an amount
not to exceed 6.5 percent, plus a fee to be paid to the host racing
association not to exceed 3.5 percent, of the amount handled on that
race or races. The amount remaining after the payment of winning
wagers and after payment of the contractual compensation and host
fee, if any, shall be distributed as a market access fee in
accordance with subdivision (g). As used in this section, "market
access fee" means the contractual fee paid by a betting system or
multijurisdictional wagering hub to the California licensee for
access to the California market for wagering purposes. As used in
this section, "licensee" means any racing association or fair, or
affiliation thereof authorized in subdivision (a).
   (c) (1) The board shall develop and adopt rules to license and
regulate all phases of operation of advance deposit wagering for
licensees, betting systems, and multijurisdictional wagering hubs
located in California. Betting systems and multijurisdictional
wagering hubs located and operating in California shall be approved
by the board prior to establishing advance deposit wagering accounts
or accepting wagering instructions concerning those accounts and
shall enter into a written contractual agreement with the bona fide
labor organization that has historically represented the same or
similar classifications of employees at the nearest horse racing
meeting. Permanent state or county employees and nonprofit
organizations that have historically performed certain services at
county, state, or district fairs may continue to provide those
services, notwithstanding this requirement.
   (2) The board shall develop and adopt rules and regulations
requiring betting systems and multijurisdictional wagering hubs to
establish security access policies and safeguards, including, but not
limited to, the following:
   (A) The betting system or wagering hub shall utilize the services
of a board-approved independent third party to perform identity,
residence, and age verification services with respect to persons
establishing an advance deposit wagering account.
   (B) The betting system or wagering hub shall utilize personal
identification numbers (PINs) and other technologies to assure that
only the accountholder has access to the advance deposit wagering
account.
   (C) The betting system or wagering hub shall provide for
withdrawals from the wagering account only by means of a check made
payable to the accountholder and sent to the address of the
accountholder or by means of an electronic transfer to an account
held by the verified accountholder or the accountholder may withdraw
funds from the wagering account at a facility approved by the board
by presenting verifiable personal and account identification
information.
   (D) The betting system or wagering hub shall allow the board
access to its premises to visit, investigate, and place expert
accountants and other persons it deems necessary for the purpose of
ensuring that its rules and regulations concerning credit
authorization, account access, and other security provisions are
strictly complied with.
   (3) The board shall prohibit advance deposit wagering advertising
that it determines to be deceptive to the public. The board shall
also require, by regulation, that every form of advertising contain a
statement that minors are not allowed to open or have access to
advance deposit wagering accounts.
   (d) As used in this section, a "multijurisdictional wagering hub"
is a business conducted in more than one jurisdiction that
facilitates parimutuel wagering on races it simulcasts and other
races it offers in its wagering menu.
   (e) As used in this section, a "betting system" is a business
conducted exclusively in this state that facilitates parimutuel
wagering on races it simulcasts and other races it offers in its
wagering menu.
   (f) In order for a licensee, betting system, or
multijurisdictional wagering hub to be approved by the board to
conduct advance deposit wagering, it shall meet  both
  all  of the following requirements:
   (1) All wagers thereby made shall be included in the appropriate
parimutuel pool of the host racing association or fair under a
contractual agreement with the applicable California licensee, in
accordance with the provisions of this chapter.
   (2) The amounts deducted from advance deposit wagers shall be in
accordance with the provisions of this chapter. 
   (3) The employees who operate and administer the advance deposit
wagering on a daily basis shall work in California. 
   (g) The amount received as a market access fee from advance
deposit wagers, which shall not be considered for purposes of Section
19616.51, shall be distributed as follows:
   (1) An amount equal to 0.0011 multiplied by the amount handled on
advance deposit wagers originating in California for each racing
meeting shall be distributed to the Center for Equine Health to
establish the Kenneth L. Maddy Fund for the benefit of the School of
Veterinary Medicine at the University of California at Davis.
   (2) An amount equal to 0.0003 multiplied by the amount handled on
advance deposit wagers originating in California for each racing
meeting shall be distributed to the Department of Industrial
Relations to cover costs associated with audits conducted pursuant to
Section 19526 and for the purposes of reimbursing the State
Mediation and Conciliation Service for costs incurred pursuant to
this bill. However, if that amount would exceed the costs of the
Department of Industrial Relations, the amount distributed to the
department shall be reduced, and that reduction shall be forwarded to
an organization designated by the racing association or fair
described in subdivision (a) for the purpose of augmenting a
compulsive gambling prevention program specifically addressing that
problem.
   (3) An amount equal to 0.00165 multiplied by the amount handled on
advance deposit wagers that originate in California for each racing
meeting shall be distributed as follows:
   (A) One-half of the amount shall be distributed to supplement the
trainer-administered pension plans for backstretch personnel
established pursuant to Section 19613. Moneys distributed pursuant to
this subparagraph shall supplement, and not supplant, moneys
distributed to that fund pursuant to Section 19613 or any other
provision of law.
   (B) One-half of the amount shall be distributed to the welfare
fund established for the benefit of horsemen and backstretch
personnel pursuant to subdivision (b) of Section 19641. Moneys
distributed pursuant to this subparagraph shall supplement, and not
supplant, moneys distributed to that fund pursuant to Section 19641
or any other provision of law.
   (4) With respect to wagers on each breed of racing that originate
in California, an amount equal to 2 percent of the first two hundred
fifty million dollars ($250,000,000) of handle from all advance
deposit wagers originating from within California annually, an amount
equal to 1.5 percent of the next two hundred fifty million dollars
($250,000,000) of handle from all advance deposit wagers originating
from within California annually, and an amount equal to 1 percent of
handle from all advance deposit wagers originating from within
California in excess of five hundred million dollars ($500,000,000)
annually, shall be distributed as satellite wagering commissions. The
satellite wagering facility commissions calculated in accordance
with this subdivision shall be distributed to each satellite wagering
facility and racing association or fair in the zone in which the
wager originated in the same relative proportions that the satellite
wagering facility or the racing association or fair generated
satellite commissions during the previous calendar year. In the event
of a reduction in the satellite wagering commissions, pursuant to
this section, the benefits therefrom shall be distributed equitably
as purses and commissions to all associations and racing fairs
generating advance deposit wagers in proportion to the handle
generated by those associations and racing fairs. For purposes of
this section, the purse funds distributed pursuant to Section
19605.72 shall be considered to be satellite wagering facility
commissions attributable to thoroughbred races at the locations
described in that section.
   (5) With respect to wagers on each breed of racing that originate
in California for each racing meeting, after the payment of
contractual obligations to the licensee, the betting system, or the
multijurisdictional wagering hub, and the distribution of the amounts
set forth in paragraphs (1) through (4), inclusive, the amount
remaining shall be distributed to the racing association or fair that
is conducting live racing on that breed during the calendar period
in the zone in which the wager originated, and this amount shall be
allocated to that racing association or fair as commissions, to
horsemen participating in that racing meeting in the form of purses,
and as incentive awards, in the same relative proportion as they were
generated or earned during the prior calendar year at that racing
association or fair on races conducted or imported by that racing
association or fair after making all deductions required by
applicable law. Purse funds generated pursuant to this section may be
utilized to pay 50 percent of the total costs and fees incurred due
to the implementation of advance deposit wagering. "Incentive awards"
shall be those payments provided for in Sections 19617.2, 19617.7,
19617.8, 19617.9, and 19619. The amount determined to be payable for
incentive awards shall be payable to the applicable official
registering agency and thereafter distributed as provided in this
chapter. If the provisions of Section 19601.2 apply, then the amount
distributed to the applicable racing associations or fairs from
advance deposit wagering shall first be divided between those racing
associations or fairs in direct proportion to the total amount
wagered in the applicable zone on the live races conducted by the
respective association or fair. Notwithstanding this requirement,
when the provisions of subdivision (b) of Section 19607.5 apply to
the 2nd District Agricultural Association in Stockton or the
California Exposition and State Fair in Sacramento, then the total
amount distributed to the applicable racing associations or fairs
shall first be divided equally, with 50 percent distributed to
applicable fairs and 50 percent distributed to applicable
associations. For purposes of this subdivision, the zones of the
state shall be as defined in Section 19530.5, except as modified by
the provisions of subdivision (f) of Section 19601, and the combined
central and southern zones shall be considered one zone.
   Notwithstanding any provision of this section to the contrary, the
distribution of the market access fee, other than the distributions
specified in paragraph (1) or (2), may be altered upon the approval
of the board, in accordance with an agreement signed by all parties
receiving a distribution under paragraphs (4) and (5).
   (h) Notwithstanding any provisions of this section to the
contrary, all funds derived from advance deposit wagering that
originate from California for each racing meeting on out-of-state and
out-of-country thoroughbred races conducted after 6 p.m., Pacific
time, shall be distributed in accordance with this subdivision. With
respect to these wagers, 50 percent of the amount remaining after the
payment of contractual obligations to the multijurisdictional
wagering hub, betting system, or licensee and the amounts set forth
in paragraphs (1) through (5), inclusive, of subdivision (g) shall be
distributed as commissions to thoroughbred associations and racing
fairs, as thoroughbred and fair purses, and as incentive awards in
accordance with subdivision (g), and the remaining 50 percent,
together with all funds derived for each racing meeting from advance
deposit wagering originating from California out-of-state and
out-of-country harness and quarter horse races conducted after 6
p.m., Pacific time, shall be distributed as commissions on a pro rata
basis to the applicable licensed quarter horse association and the
applicable licensed harness association, based upon the amount
handled instate, both on- and off-track, on each breed's own live
races in the previous year by that association, or it's predecessor
association. One-half of the amount thereby received by each
association shall be retained by that association as a commission,
and the other half of the money received shall be distributed as
purses to the horsemen participating in its current or next scheduled
licensed racing meeting.
   (i) Notwithstanding any provisions of this section to the
contrary, all funds derived from advance deposit wagering which
originate from California for each racing meeting on out-of-state and
out-of-country nonthoroughbred races conducted before 6 p.m.,
Pacific time, shall be distributed in accordance with this
subdivision. With respect to these wagers, 50 percent of the amount
remaining after the payment of contractual obligations to the
multijurisdictional wagering hub, betting system, or licensee and the
amounts set forth in paragraphs (1) through (5), inclusive, of
subdivision (g) shall be distributed as commissions as provided in
subdivision (h) for licensed quarter horse and harness associations,
and the remaining 50 percent shall be distributed as commissions to
the applicable thoroughbred associations or fairs, as thoroughbred
and fair purses, and as incentive awards in accordance with
subdivision (g).
   (j) A racing association, a fair, or a satellite wagering facility
may accept and facilitate the placement of any wager from a patron
at its facility that a California resident could make through a
betting system or multijurisdictional wagering hub duly offering
advance deposit wagering in this state, and the facility accepting
the wager shall receive a 2-percent commission on that wager in lieu
of any distribution for satellite commissions pursuant to subdivision
(g).
   (k) Any disputes concerning the interpretation or application of
this section shall be resolved by the board.
   This section shall remain in effect only until January 1, 
2008   2011  , and as of that date is repealed,
unless a later enacted statute, that is enacted before January 1,
 2008   2011  , deletes or extends that
date.