BILL NUMBER: AB 1289 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 9, 2007
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 amended, 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.
Existing law requires the California Horse Racing Board to adopt
rules to license and regulate all phases of operation of advance
deposit wagering for licensees, betting systems, and
multijurisdictional hubs located in California.
This bill would require the rules adopted by the board to include
a requirement that employees represented in the same or similar
classifications be employed at a ratio of one employee for every
$20,000 in wagers handled by those licensees, betting systems, and
multijurisdictional hubs.
Existing law specifies how the amount received as a market access
fee from advance deposit wagers shall be distributed.
This bill would require that a specified amount of that fee be
used to establish and administer a defined contribution retirement
plan for California jockeys, as specified.
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wagering will be repealed on January 1, 2008.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, 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 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 located within California 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. The rules adopted by
the board shall include a requirement that employees represented in
the same or similar classifications shall be employed at a ratio of
one employee for every twenty thousand dollars ($20,000) in wagers
handled by the licensees, betting systems, and multijurisdic
tional hubs subject to this section.
(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 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) An amount equal to 0.00395 multiplied by the amount handled on
advanced deposit wagers originating in California for each racing
meeting shall be distributed to the California Horse Racing Board to
establish and to administer jointly with the organization certified
as the majority representative of California licensed jockeys
pursuant to Section 19612.9, a defined contribution retirement plan
for California licensed jockeys who retired from racing on or after
January 1, 2003, and who, as of the date of their retirement, had
ridden in a minimum of 1,250 parimutuel races conducted in
California.
(5)
(6) 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)
(5) , 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)
(6) .
(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) (3) ,
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)
(6) , 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, 2011,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2011, deletes or extends that date.