BILL NUMBER: AB 734 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 20, 2009
INTRODUCED BY Assembly Member Hill
FEBRUARY 26, 2009
An act to amend Sections 19604, 19605.7, and 19605.71 of the
Business and Professions Code, relating to horse racing.
LEGISLATIVE COUNSEL'S DIGEST
AB 734, as amended, Hill. Horse racing: satellite wagering
facilities.
Existing law authorizes advance deposit wagering to be conducted,
with the approval of the California Horse Racing Board. Existing law
specifies how the amount received as a market access fee from advance
deposit wagers shall be distributed, including the distribution of
specified amounts as satellite wagering commissions to each satellite
wagering facility and racing association or fair in the zone in
which the wager originated, as provided.
This bill would increase by 1% the percentages that are used to
determine the amount to be distributed as satellite wagering
commissions.
Existing law requires that the total percentage deducted from
wagers at satellite wagering facilities in the northern zone, and in
the central and southern zone zones ,
be the same as deductions for wagers at the racetrack where the
racing meeting is being conducted and be distributed as specified.
This bill would instead require that the amount
total percentage deducted from wagers at satellite
wagering facilities in the northern zone, and in the central and
southern zone zones , be an
unspecified percentage of the total amount of those wagers
1% of the amount handled greater than the percentage
deducted from wagers at the racetrack where wagering is being
conducted , and be distributed as specified.
Existing law provides that, for thoroughbred meetings and for
harness and certain other race meetings, 2% of the amount handled by
the satellite wagering facility shall be distributed to
the satellite wagering facility as a commission for the right to do
business, as a franchise.
This bill would increase that percentage to 3%.
This bill would also make various clarifying and technical
changes.
Vote: majority. Appropriation: no. Fiscal committee: no.
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. The board may authorize any racing association, racing
fair, betting system, or multijurisdictional wagering hub to conduct
advance deposit wagering in accordance with this section. Racing
associations, racing fairs, and their respective horsemen's
organizations may form a partnership, joint venture, or any other
affiliation in order to further the purposes of this section.
(a) As used in this section, the following definitions apply:
(1) "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 an ADW provider, and subsequently
issues wagering instructions concerning the funds in this account,
thereby authorizing the ADW provider holding the account to place
wagers on the account owner's behalf.
(2) "ADW provider" means a licensee, betting system, or
multijurisdictional wagering hub, located within California or
outside this state, that is authorized to conduct advance deposit
wagering pursuant to this section.
(3) "Betting system" means a business conducted exclusively in
this state that facilitates parimutuel wagering on races it
simulcasts and other races it offers in its wagering menu.
(4) "Breed of racing" means as follows:
(A) With respect to associations and fairs licensed by the board
to conduct thoroughbred, fair, or mixed breed race meetings, "breed
of racing" shall mean thoroughbred.
(B) With respect to associations licensed by the board to conduct
quarter horse race meetings, "breed of racing" shall mean quarter
horse.
(C) With respect to associations and fairs licensed by the board
to conduct standardbred race meetings, "breed of racing" shall mean
standardbred.
(5) "Contractual compensation" means the amount paid to an ADW
provider from advance deposit wagers originating in this state.
Contractual compensation includes, but is not limited to, hub fee
payments, and may include host fee payments, if any, for out-of-state
and out-of-country races. Contractual compensation is subject to the
following requirements:
(A) Excluding contractual compensation for host fee payments,
contractual compensation shall not exceed 6.5 percent of the amount
wagered.
(B) The host fee payments included within contractual compensation
shall not exceed 3.5 percent of the amount wagered. Notwithstanding
this provision, the host fee payment with respect to wagers on the
Kentucky Derby, Preakness Stakes, Belmont Stakes, and selected
Breeders' Cup Championship races may be negotiated by the ADW
provider, the racing associations accepting wagers on those races
pursuant to Section 19596.2, and the horsemen's organization.
(C) In order to ensure fair and consistent market access fee
distributions to associations, fairs, horsemen, and breeders, for
each breed of racing, the percentage of wagers paid as contractual
compensation to an ADW provider pursuant to the terms of a hub
agreement with a racing association or fair when that racing
association or fair is conducting live racing shall be the same as
the percentage of wagers paid as contractual compensation to that ADW
provider when that racing association or fair is not conducting live
racing.
(6) "Horsemen's organization" means, with respect to a particular
racing meeting, the organization recognized by the board as
responsible for negotiating purse agreements on behalf of horsemen
participating in that racing meeting.
(7) "Hub agreement" means a written agreement providing for
contractual compensation paid with respect to advance deposit wagers
placed by California residents on a particular breed of racing
conducted outside of California. In the event a hub agreement exceeds
a term of two years, then an ADW provider, one or more racing
associations or fairs that together conduct no fewer than five weeks
of live racing for the breed covered by the hub agreement, and the
horsemen's organization responsible for negotiating purse agreements
for the breed covered by the hub agreement shall be signatories to
the hub agreement. A hub agreement is required for an ADW provider to
receive contractual compensation for races conducted outside of
California.
(8) "Hub agreement arbitration" means an arbitration proceeding
pursuant to which the disputed provisions of the hub agreement
pertaining to the hub or host fees from wagers on races conducted
outside of California provided pursuant to paragraph (2) of
subdivision (b) are determined in accordance with the provisions of
this paragraph. If a hub agreement arbitration is requested, all of
the following shall apply:
(A) The ADW provider shall be permitted to accept advance deposit
wagers from California residents.
(B) The contractual compensation received by the ADW provider
shall be the contractual compensation specified in the hub agreement
that is the subject of the hub agreement arbitration.
(C) The difference between the contractual compensation specified
in subparagraph (B) and the contractual compensation determined to be
payable at the conclusion of the hub agreement arbitration shall be
calculated and paid within 15 days following the arbitrator's
decision and order. The hub agreement arbitration shall be held as
promptly as possible, but in no event more than 60 days following the
demand for that arbitration. The arbitrator shall issue a decision
no later than 15 days following the conclusion of the arbitration. A
single arbitrator jointly selected by the ADW provider and the party
requesting a hub agreement arbitration shall conduct the hub
agreement arbitration. However, if the parties cannot agree on the
arbitrator within seven days of issuance of the written demand for
arbitration, then the arbitrator shall be selected pursuant to the
Streamlined Arbitration Rules and Procedures of the Judicial
Arbitration and Mediation Services, or pursuant to the applicable
rules of its successor organization. In making the hub agreement
arbitration determination, the arbitrator shall be required to choose
between the contractual compensation of the hub agreement agreed to
by the ADW provider or whatever different terms for the hub agreement
were proposed by the party requesting the hub agreement arbitration.
The arbitrator shall not be permitted to impose new, different, or
compromised terms to the hub agreement. The arbitrator's decision
shall be final and binding on the parties. If an arbitration is
requested, either party may bring an action in state court to compel
a party to go into arbitration or to enforce the decision of the
arbitrator. The cost of the hub agreement arbitration, including the
cost of the arbitrator, shall be borne in equal shares by the parties
to the hub agreement and the party or parties requesting a hub
agreement arbitration. The hub agreement arbitration shall be
administered by the Judicial Arbitration and Mediation Services
pursuant to its Streamlined Arbitration Rules and Procedures or its
successor organization.
(9) "Incentive awards" means 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 under this section
shall be payable to the applicable official registering agency and
thereafter distributed as provided in this chapter.
(10) "Licensee" means any racing association or fair licensed to
conduct a live racing meet in this state, or affiliation thereof,
authorized under this section.
(11) "Market access fee" means the amount of advance deposit
wagering handle remaining after the payment of winning wagers, and
after the payment of contractual compensation, if any, to an ADW
provider. Market access fees shall be distributed in accordance with
subdivision (f).
(12) "Multijurisdictional wagering hub" means 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.
(13) "Racing fair" means a fair authorized by the board to conduct
live racing.
(14) "Zone" means the zone of the state, as defined in Section
19530.5, except as modified by the provisions of subdivision (f) of
Section 19601. For these purposes, the central and southern zones
shall together be considered one zone.
(b) Wagers shall be accepted according to the procedures set forth
in this subdivision.
(1) No ADW provider shall accept wagers or wagering instructions
on races conducted in California from a resident of California unless
all of the following conditions are met:
(A) The ADW provider is licensed by the board.
(B) A written agreement allowing those wagers exists with the
racing association or fair conducting the races on which the wagers
are made.
(C) The agreement referenced in subparagraph (B) shall have been
approved in writing by the horsemen's organization responsible for
negotiating purse agreements for the breed on which the wagers are
made in accordance with the Interstate Horseracing Act (15 U.S.C.
Sec. 3001, et seq.), regardless of the location of the ADW provider,
whether in California or otherwise, including, without limitation,
any and all requirements contained therein with respect to written
consents and required written agreements of horsemen's groups to the
terms and conditions of the acceptance of those wagers and any
arrangements as to the exclusivity between the host racing
association or fair and the ADW provider. For purposes of this
subdivision, the substantive provisions of the Interstate Horseracing
Act shall be taken into account without regard to whether, by its
own terms, that act is applicable to advance deposit wagering on
races conducted in California accepted from residents of California.
(2) No ADW provider shall accept wagers or wagering instructions
on races conducted outside of California from a resident of
California unless all of the following conditions are met:
(A) The ADW provider is licensed by the board.
(B) There is a hub agreement between the ADW provider and one or
both of (i) one or more racing associations or fairs that together
conduct no fewer than five weeks of live racing on the breed on which
wagering is conducted during the calendar year during which the
wager is placed, and (ii) the horsemen's organization responsible for
negotiating purse agreements for the breed on which wagering is
conducted.
(C) If the parties referenced in clauses (i) and (ii) of
subparagraph (B) are both signatories to the hub agreement, then no
party shall have the right to request a hub agreement arbitration.
(D) If only the party or parties referenced in clause (i) of
subdivision subparagraph (B) is a
signatory to the hub agreement, then the signatories to the hub
agreement shall, within five days of execution of the hub agreement,
provide a copy of the hub agreement to the horsemen's organization
responsible for negotiating purse agreements for the breed on which
wagering is conducted for each race conducted outside of California
on which California residents may place advance deposit wagers. Prior
to receipt of the hub agreement, the horsemen's organization shall
sign a nondisclosure agreement with the ADW provider agreeing to hold
confidential all terms of the hub agreement. If the horsemen's
organization wants to request a hub agreement arbitration, it shall
send written notice of its election to the signatories to the hub
agreement within 10 days after receipt of the copy of the hub
agreement, and shall provide its alternate proposal to the hub and
host fees specified in the hub agreement with that written notice. If
the horsemen's organization does not provide that written notice
within the 10-day period, then no party shall have the right to
request a hub agreement arbitration. If the horsemen's organization
does provide that written notice within the 10-day period, then the
ADW provider shall have 10 days to elect in writing to do one of the
following:
(i) Abandon the hub agreement.
(ii) Accept the alternate proposal submitted by the horsemen's
organization.
(iii) Proceed with a hub agreement arbitration.
(E) If only the party referenced in clause (ii) of
subdivision subparagraph (B) is a signatory to
the hub agreement, then the signatories to the hub agreement shall,
within five days of execution of the hub agreement, provide written
notice of the host and hub fees applicable pursuant to the hub
agreement for each race conducted outside of California on which
California residents may place advance deposit wagers, which notice
shall be provided to all racing associations and fairs conducting
live racing of the same breed covered by the hub agreement. If any
racing association or fair wants to request a hub agreement
arbitration, it shall send written notice of its election to the
signatories to the hub agreement within 10 days after receipt of the
notice of host and hub fees. It shall also provide its alternate
proposal to the hub and host fees specified in the hub agreement with
the notice of its election. If more than one racing association or
fair provides notice of their request for hub agreement arbitration,
those racing associations or fairs, or both, shall have a period of
five days to jointly agree upon which of their alternate proposals
shall be the official proposal for purposes of the hub agreement
arbitration. If one or more racing associations or fairs that
together conduct no fewer than five weeks of live racing on the breed
on which wagering is conducted during the calendar year during which
the wager is placed does not provide written notice of their
election to arbitrate within the 10-day period, then no party shall
have the right to request a hub agreement arbitration. If a valid hub
agreement arbitration request is made, then the ADW provider shall
have 10 days to elect in writing to do one of the following:
(i) Abandon the hub agreement.
(ii) Accept the alternate proposal submitted by the racing
associations or fairs.
(iii) Proceed with a hub agreement arbitration.
The results of any hub agreement arbitration elected pursuant to
this subdivision shall be binding on all other associations and fairs
conducting live racing on that breed.
(F) The acceptance thereof is in compliance with the provisions of
the Interstate Horseracing Act (15 U.S.C. Sec. 3001, et seq.),
regardless of the location of the ADW provider, whether in California
or otherwise, including, without limitation, any and all
requirements contained therein with respect to written consents and
required written agreements of horsemen's groups to the terms and
conditions of the acceptance of such wagers and any arrangements as
to the exclusivity between the host racing association or fair and
the ADW provider.
(c) An advance deposit wager may be made only by the ADW provider
holding the account pursuant to wagering instructions issued by the
owner of the funds communicated by telephone call or through other
electronic media. The ADW provider shall ensure the identification of
the account's owner by using methods and technologies approved by
the board. Any ADW provider that accepts wagering instructions
concerning races conducted in California, or accepts wagering
instructions originating in California, shall provide a full
accounting and verification of the source of the wagers thereby made,
including the postal ZIP Code and breed of the source of the wagers,
in the form of a daily download of parimutuel data to a database
designated by the board. The daily download shall be delivered in a
timely basis using file formats specified by the database designated
by the board, and shall include any and all data necessary to
calculate and distribute moneys according to the rules and
regulations governing California parimutuel wagering. Any and all
reasonable costs associated with the creation, provision, and
transfer of this data shall be borne by the ADW provider.
(d) (1) (A) The board shall develop and adopt rules to license and
regulate all phases of operation of advance deposit wagering for ADW
providers operating in California.
(B) The board shall not approve an application for an original or
renewal license as an ADW provider unless the entity, if requested in
writing by a bona fide labor organization no later than
ninety 90 days prior to licensing, has entered
into a contractual agreement with that labor organization that
provides all of the following:
(i) The labor organization has historically represented employees
who accept or process any form of wagering at the nearest horse
racing meeting located in California.
(ii) The agreement establishes the method by which the ADW
provider will agree to recognize and bargain in good faith with a
labor organization which has demonstrated majority status by
submitting authorization cards signed by those employees who accept
or process any form of wagering for which a California ADW
advance deposit wagering license is required.
(iii) The agreement requires the ADW provider to maintain its
neutrality concerning the choice of those employees who accept or
process any form of wagering for which a California ADW
advance deposit wagering license is required
whether or not to authorize the labor organization to represent them
with regard to wages, hours, and other the terms and conditions of
employment.
(iv) The agreement applies to those classifications of employees
who accept or process wagers for which a California ADW
advance deposit wagering license is required
whether the facility is located within or outside of California.
(C) (i) The agreement required by subparagraph (B) shall not be
conditioned by either party upon the other party agreeing to matters
outside the requirements of subparagraph (B).
(ii) The requirement in subparagraph (B) shall not apply to an ADW
provider which has entered into a collective bargaining agreement
with a bona fide labor organization that is the exclusive bargaining
representative of employees who accept or process parimutuel wagers
on races for which an ADW advance deposit
wagering license is required whether the facility is located
within or outside of California.
(D) 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.
(E) Parimutuel clerks employed by racing associations or fairs or
employees of ADW providers who accept or process any form of wagers
who are laid off due to lack of work shall have preferential hiring
rights for new positions with their employer in occupations whose
duties include accepting or processing any form of wagers, or the
operation, repair, service, or maintenance of equipment that accepts
or processes any form of wagering at a racetrack, satellite wagering
facility, or ADW provider licensed by the board. The preferential
hiring rights established by this subdivision shall be conditioned
upon the employee meeting the minimum qualification requirements of
the new job.
(2) The board shall develop and adopt rules and regulations
requiring ADW providers to establish security access policies and
safeguards, including, but not limited to, the following:
(A) The ADW provider shall use board-approved methods to perform
location and age verification confirmation with respect to persons
establishing an advance deposit wagering account.
(B) The ADW provider shall use personal identification numbers
(PINs) or other technologies to assure that only the accountholder
has access to the advance deposit wagering account.
(C) The ADW provider 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 account identification information.
(D) The ADW provider shall allow the board access to its premises
to visit, investigate, audit , 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. To ensure that the amounts retained from the
parimutuel handle are distributed under law, rules, or agreements,
any ADW provider that accepts wagering instructions concerning races
conducted in California or accepts wagering instructions originating
in California shall provide an independent "agreed upon procedures"
audit for each California racing meeting, within 60 days of the
conclusion of the race meeting. The auditing firm to be used and the
content and scope of the audit, including host fee obligations, shall
be set forth in the applicable agreement. The ADW provider shall
provide the board, horsemen's organizations, and the host racing
association with an annual parimutuel audit of the financial
transactions of the ADW provider with respect to wagers authorized
pursuant to this section, prepared in accordance with generally
accepted auditing standards and the requirements of the board. Any
and all reasonable costs associated with those audits shall be borne
by the ADW provider.
(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.
(e) In order for a licensee, betting system, or
multijurisdictional wagering hub to be approved by the board as an
ADW provider, it shall meet both of the following requirements:
(1) All wagers thereby made shall be included in the appropriate
parimutuel pool under a contractual agreement with the applicable
host track.
(2) The amounts deducted from advance deposit wagers shall be in
accordance with the provisions of this chapter.
(f) After the payment of contractual compensation, the amounts
received as market access fees 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 section. 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 3 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 2.5 percent of the next two hundred fifty million dollars
($250,000,000) of handle from all advance deposit wagers originating
from within California annually, an amount equal to 2 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 1.5 percent of handle from all
advance deposit wagers originating from within California in excess
of seven hundred fifty million dollars ($750,000,000) annually
, shall be distributed as satellite wagering
commissions. Satellite facilities that were not operational in 2001,
other than one each in the cities of Inglewood and San Mateo, and two
additional facilities each operated by the Alameda County Fair and
the Los Angeles County Fair and their partners and other than
existing facilities which are relocated, are not eligible for
satellite wagering commission distributions under this section. 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. If there is
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) After the distribution of the amounts set forth in paragraphs
(1) to (4), inclusive, the remaining market access fees from advance
deposit wagers originating in California
shall be as follows:
(A) With respect to wagers on each breed of racing, 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. That 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. Notwithstanding any other provision of law, the
distributions with respect to each breed of racing set forth in this
subparagraph may be altered upon the approval of the board, in
accordance with an agreement signed by the respective associations,
fairs, horsemen's organizations, and breeders organizations receiving
those distributions.
(B) If the provisions of Section 19601.2 apply, then the amount
distributed to the applicable racing associations or fairs 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.
(C) Notwithstanding any provisions of this section to the
contrary, with respect to wagers on out-of-state and out-of-country
thoroughbred races conducted after 6 p.m., Pacific time, 50 percent
of the amount remaining shall be distributed as commissions to
thoroughbred associations and racing fairs, as thoroughbred and fair
purses, and as incentive awards in accordance with subparagraph (A),
and the remaining 50 percent, together with the total amount
remaining 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 in state, both on- and off-track, on
each breed's own live races in the previous year by that association,
or its 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.
(D) Notwithstanding any provisions of this section to the
contrary, with respect to wagers on out-of-state and out-of-country
nonthoroughbred races conducted before 6 p.m., Pacific time, 50
percent of the amount remaining shall be distributed as commissions
as provided in subparagraph (C) 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 subparagraph (A).
(E) Notwithstanding any provision of this section to the contrary,
the distribution of market access fees pursuant to this subparagraph
may be altered upon the approval of the board, in accordance with an
agreement signed by all parties whose distributions would be
affected.
(g) A racing association, a fair, or a satellite wagering facility
may enter into an agreement with an ADW provider to accept and
facilitate the placement of any wager from a patron at its facility
that a California resident could make through that ADW provider.
Deductions from wagers made pursuant to such an agreement shall be
distributed in accordance with the provisions of this chapter
governing wagers placed at that facility, except that the board may
authorize alternative distributions as agreed to by the ADW provider,
the operator of the facility accepting the wager, the association or
fair conducting that breed of racing in the zone where the wager is
placed, and the respective horsemen's organization.
(h) Any issues concerning the interpretation or application of
this section shall be resolved by the board.
(i) Amounts distributed under this section shall be proportionally
reduced by an amount equal to 0.00295 multiplied by the amount
handled on advanced deposit wagers originating in California for each
racing meeting, and shall not exceed two million dollars
($2,000,000). The method used to calculate the reduction in
proportionate share shall be approved by the board. The amount
deducted shall be distributed as follows:
(1) Fifty percent of the money 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, 2009, and who, as of the date of their
retirement, had ridden in a minimum of 1,250 parimutuel races
conducted in California.
(2) The remaining 50 percent of the money shall be distributed as
follows:
(A) Seventy percent 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) Thirty percent 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.
SEC. 2. Section 19605.7 of the Business and Professions Code is
amended to read:
19605.7. The amount total percentage
deducted from wagers at satellite wagering facilities in the
northern zone shall be ____ percent of the total amount of
those wagers and shall be distributed as follows: 1
percent of the amount handled greater than the percentage deducted
from wagers at the racetrack where wagering is being conducted, and
shall be distributed as set forth in this section. Amounts deducted
under this section shall be distributed as follows:
(a) For thoroughbred meetings, 1.3 percent of the amount handled
by the satellite wagering facility on conventional and exotic wagers
shall be distributed to the racing association for payment to the
state as a license fee, 3 percent shall be distributed to the
satellite wagering facility as a commission for the right to do
business, as a franchise, and this commission is not for the use of
any real property, 2.5 percent or the amount of actual operating
expenses, as determined by the board, whichever is less, shall be
distributed to an organization described in Section 19608.2, 0.54
percent shall be deposited with the official registering agency
pursuant to subdivision (a) of Section 19617.2 and shall thereafter
be distributed in accordance with subdivisions (b), (c) and (d) of
Section 19617.2, 0.033 percent shall be distributed to the Center for
Equine Health, and 0.067 percent shall be distributed to the
California Animal Health and Food Safety Laboratory, School of
Veterinary Medicine, University of California at Davis. It is the
intent of the Legislature that the 0.033 percent of funds distributed
to the Center for Equine Health shall supplement, and not supplant,
other funding sources.
(b) For harness, quarter horse, Appaloosa, Arabian, or mixed breed
meetings, 0.4 percent of the amount handled by the satellite
wagering facility on conventional and exotic wagers shall be
distributed to the racing association for payment to the state as a
license fee, for fair meetings, 1 percent of the amount handled by
the satellite wagering facility on conventional and exotic wagers
shall be distributed to the fair association for payment to the state
as a license fee, 3 percent shall be distributed to the satellite
wagering facility as a commission for the right to do business, as a
franchise, and this commission is not for the use of any real
property, and 6 percent of the amount handled by the satellite
wagering facility or the amount of actual operating expenses, as
determined by the board, whichever is less, shall be distributed to
an organization described in Section 19608.2. In addition, in the
case of quarter horses, 0.4 percent shall be deposited with the
official registering agency pursuant to subdivision (b) of Section
19617.7 and shall thereafter be distributed in accordance with
subdivisions (c), (d), and (e) of Section 19617.7; in the case of
Appaloosas, 0.4 percent shall be deposited with the official
registering agency pursuant to subdivision (b) of Section 19617.9 and
shall thereafter be distributed in accordance with subdivisions (c),
(d), and (e) of Section 19617.9; in the case of Arabians, 0.4
percent shall be held by the association to be deposited with the
official registering agency pursuant to Section 19617.8, and shall
thereafter be distributed in accordance with Section 19617.8; in the
case of standardbreds, 0.4 percent shall be distributed for the
California Standardbred Sires Stakes Program pursuant to Section
19619; in the case of thoroughbreds, 0.48 percent shall be deposited
with the official registering agency pursuant to subdivision (a) of
Section 19617.2 and shall thereafter be distributed in accordance
with subdivisions (b), (c), and (d) of Section 19617.2; 0.033 percent
shall be distributed to the Center for Equine Health; and 0.067
percent shall be distributed to the California Animal Health and Food
Safety Laboratory, School of Veterinary Medicine, University of
California at Davis. It is the intent of the Legislature that the
0.033 percent of funds distributed to the Center for Equine Health
shall supplement, and not supplant, other funding sources.
(c) In addition to the distributions specified in subdivision (a)
and (b), for mixed breed meetings, 1 percent of the total amount
handled by each satellite wagering facility shall be distributed to
an organization described in Section 19608.2 for promotion of the
program at satellite wagering facilities. For harness meetings, 0.5
percent of the total amount handled by each satellite wagering
facility shall be distributed to an organization described in Section
19608.2 for the promotion of the program at satellite wagering
facilities, and 0.5 percent of the total amount handled by each
satellite wagering facility shall be distributed according to a
written agreement for each race meeting between the licensed racing
association and the organization representing the horsemen
participating in the meeting. If, with respect to harness meetings,
there are funds unexpended from this 1 percent, these funds may be
expended for other purposes with the consent of the horsemen and the
racing association to benefit the horsemen, or the racing
association, or both, pursuant to their agreement. For quarter horse
meetings, 0.5 percent of the total amount handled by each satellite
wagering facility on races run in California shall be distributed to
an organization described in Section 19608.2 for the promotion of the
program at satellite wagering facilities, 0.5 percent of the total
amount handled by each satellite wagering facility on out-of-state
and out-of-country imported races shall be distributed to the
official quarter horse registering agency for the purposes of Section
19617.75, and 0.5 percent of the total amount handled by each
satellite wagering facility on all races shall be distributed
according to a written agreement for each race meeting between the
licensed racing association and the organization representing the
horsemen participating in the meeting.
(d) Additionally, for thoroughbred, harness, quarter horse, mixed
breed, and fair meetings, 0.33 percent of the total amount handled by
each satellite wagering facility shall be paid to the city or county
in which the satellite wagering facility is located pursuant to
Section 19610.3 or 19610.4.
(e) Notwithstanding any other provision of law, a racing
association is responsible for the payment of the state license fee
as required by this section.
SEC. 3. Section 19605.71 of the Business and Professions Code is
amended to read:
19605.71. The amount total percentage
deducted from wagers at satellite wagering facilities in the
central and southern zone shall be ____ percent of the total
amount of those wagers and shall be distributed as follows:
1 percent of the amount handled greater than the
percentage deducted from wagers at the racetrack where wagering is
being conducted, and shall be distributed as set forth in this
section. A mounts deducted under this section shall be
distributed as follows:
(a) For thoroughbred meetings, 2 percent of the amount handled by
the satellite wagering facility on conventional and exotic wagers
shall be distributed to the racing association for payment to the
state as a license fee, 3 percent shall be distributed to the
satellite wagering facility as a commission for the right to do
business, as a franchise, and this commission is not for the use of
any real property, 2.5 percent or the amount of actual operating
expenses, as determined by the board, whichever is less, shall be
distributed to an organization described in Section 19608.2, 0.54
percent shall be deposited with the official registering agency
pursuant to subdivision (a) of Section 19617.2 and shall thereafter
be distributed in accordance with subdivisions (b), (c), and (d) of
Section 19617.2, 0.033 percent shall be distributed to the Center for
Equine Health, and 0.067 percent shall be distributed to the
California Animal Health and Food Safety Laboratory, School of
Veterinary Medicine, University of California at Davis. It is the
intent of the Legislature that the 0.033 percent of funds distributed
to the Center for Equine Health shall supplement, and not supplant,
other funding sources.
(b) For harness, quarter horse, Appaloosa, Arabian, or mixed breed
meetings, 0.4 percent of the amount handled by the satellite
wagering facility on conventional and exotic wagers shall be
distributed to the racing association for payment to the state as a
license fee, for fair meetings, 1 percent of the amount handled by
the satellite wagering facility on conventional and exotic wagers
shall be distributed to the racing association for payment to the
state as a license fee, 3 percent shall be distributed to the
satellite wagering facility as a commission for the right to do
business, as a franchise, and this commission is not for the use of
any real property, and 6 percent of the amount handled by the
satellite wagering facility or the amount of actual operating
expenses, as determined by the board, whichever is less, shall be
distributed to an organization described in Section 19608.2. In
addition, in the case of quarter horses, 0.4 percent shall be
deposited with the official registering agency pursuant to
subdivision (b) of Section 19617.7 and shall thereafter be
distributed in accordance with subdivisions (c), (d), and (e) of
Section 19617.7; in the case of Appaloosas, 0.4 percent shall be
deposited with the official registering agency pursuant to
subdivision (b) of Section 19617.9 and shall thereafter be
distributed in accordance with subdivisions (c), (d), and (e) of
Section 19617.9; in the case of Arabians, 0.4 percent shall be held
by the association to be deposited with the official registering
agency, pursuant to Section 19617.8, and thereafter shall be
distributed in accordance with Section 19617.8; in the case of
standardbreds, 0.4 percent shall be distributed for the California
Standardbred Sires Stakes Program pursuant to Section 19619; in the
case of thoroughbreds, 0.48 percent shall be deposited with the
official registering agency pursuant to subdivision (a) of Section
19617.2 and shall thereafter be distributed in accordance with
subdivisions (b), (c), and (d) of Section 19617.2; 0.033 percent
shall be distributed to the Center for Equine Health; and 0.067
percent shall be distributed to the California Animal Health and Food
Safety Laboratory, School of Veterinary Medicine, University of
California at Davis. It is the intent of the Legislature that the
0.033 percent of funds distributed to the Center for Equine Health
shall supplement, and not supplant, other funding sources.
(c) In addition, for Appaloosa and mixed breed meetings, 1 percent
shall be distributed to an organization described in Section 19608.2
for promotion of the program at satellite wagering facilities.
Notwithstanding any other provision of law, on wagers made in the
Counties of Orange and Los Angeles on thoroughbred races conducted in
the County of Orange or Los Angeles, or both, excluding the 50th
District Agricultural Association, the amount deducted for promotion
of the satellite wagering program at satellite wagering facilities
shall be 0.5 percent. Any of the promotion funds that are not
distributed in the year in which they are collected may be
distributed in the following year. If promotion funds distributed in
any year exceed the amount collected for that year, the funds
distributed in the following year shall be reduced by the excess
amount. For harness meetings, 0.5 percent of the total amount handled
by each satellite wagering facility shall be distributed to an
organization described in Section 19608.2 for the promotion of the
program at satellite wagering facilities, and 0.5 percent of the
total amount handled by each satellite wagering facility shall be
distributed according to a written agreement for each race meeting
between the licensed racing association and the organization
representing the horsemen participating in the meeting. For quarter
horse meetings, 0.5 percent of the total amount handled by satellite
wagering facility on races run in California shall be distributed to
an organization described in Section 19608.2 for the promotion of the
program at satellite wagering facilities, 0.5 percent of the total
amount handled by each satellite wagering facility on out-of-state
and out-of-country imported races shall be distributed to the
official quarter horse registering agency for the purposes of Section
19617.75, and 0.5 percent of the total amount handled by each
satellite wagering facility on all races shall be distributed
according to a written agreement for each race meeting between the
licensed racing association and the organization representing the
horseman participating in the meeting.
(d) Additionally, for thoroughbred, harness, quarter horse, mixed
breed, and fair meetings, 0.33 percent of the total amount handled by
the satellite wagering facility shall be paid to the city or county
in which the satellite wagering facility is located pursuant to
Section 19610.3 or 19610.4.
(e) Notwithstanding any other provision of law, a racing
association is responsible for the payment of the state license fee
as required by this section.