BILL ANALYSIS
Bill No: AB
763
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 763 Author: Chesbro
As Amended: June 2, 2009
Hearing Date: June 9, 2009
Consultant: Chris Lindstrom
SUBJECT
Horse racing: Humboldt County Fair.
DESCRIPTION
AB 763, an urgency measure, allows the Humboldt County Fair
(HCF) to import and accept wagers on up to eight races per
day from out-of-state locations and allows the Del Mar
Thoroughbred Club to import and accept wagers on an
additional eight races per day from out-of-state locations
during the period that HCF is conducting a live race meet.
Specifically, the bill:
1)Provides that, in addition to the authorization to accept
wagers on out-of-state and out-of-country races
authorized by current law, during calendar periods when a
thoroughbred association or fair in the northern zone and
the HCF simultaneously conduct live race meetings, HCF
and a thoroughbred association in the southern zone when
conducting a live race meeting and only on days in which
live races are being run, may accept wagers on the
results of not more than eight out-of-state thoroughbred
horse races, if all of the following conditions are met:
a) HCF conducts at least six live races; and,
b) HCF and the thoroughbred association in the
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southern zone accept wagers only on out-of-state
thoroughbred races that commence before 4:30 p.m.,
Pacific Standard Time.
2)Allows HCF to contract with the thoroughbred association
or fair in the southern zone to distribute the signal
statewide on its behalf.
3)Becomes effective immediately upon enactment in order to
alleviate economic uncertainty for HCF, preserve jobs,
ensure that live horse racing continues in Humboldt
County each year, and for this act to apply to the 2009
racing season.
EXISTING LAW
Article IV, Section 19(b) of the Constitution of the State
of California provides that the Legislature may provide for
the regulation of horse races and horse race meetings and
wagering on the results.
Existing law provides that the California Horse Racing
Board (CHRB) regulate the various forms of horse racing
authorized in this state.
Existing law limits the number of races that may be
imported by a thoroughbred association or fair to no more
than 32 races per day on days when live thoroughbred or
fair racing is being conducted in this state, with
specified exceptions. Provides that wagering on these
races may occur without the consent of the horsemen/women
participating in the meet, and without regard to the amount
of purses involved with the races.
Existing law exempts from that 32-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 Breeders' Cup, the Travers Stakes, or
the Haskell Invitational.
Existing law authorizes a thoroughbred racing association
or fair to import out-of-country races during the calendar
period the association or fair is conducting a race
meeting. Limits the total number of out-of-country
thoroughbred races on which wagers are allowed to be
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accepted statewide in any given year to no more than the
number of out-of-country races that were imported and on
which wagers were accepted in 1998. Provides that wagering
on these races may occur without the consent of the
horsemen/horsewomen participating in the meet.
Existing law provides CHRB is authorized to permit a
harness or quarter horse association conducting a race
meeting to accept wagers on the results of up to eight
out-of-state or out-of-country harness or quarter horse
races per day, if specified conditions are met. If only
one breed is being raced on a given day, the racing
association conducting live racing may import those races
that would otherwise be simulcast by the association that
is not racing, as specified.
Existing law authorizes a licensed harness racing
association that is conducting a live racing meeting in
this state to accept wagers on the full card of races
conducted by another racing association on the day that
other association conducts the Breeder's Crown Stakes, the
Meadowlands Pace, the Hambletonian, or the North American
Cup.
BACKGROUND
Purpose of the bill. The sponsor of this bill, the
Humboldt County Fair Association, is a nonprofit
organization that has served as the management arm of the
annual HCF in Ferndale for 114 years. Horse racing has
been an integral and essential part of HCF since its
inception in 1896. Due to recent and dramatic changes in
horse racing, however, the fair faces the very real
possibility of losing this important activity.
HCF states, "The new revenues generated from this bill
would be essential to our bottom-line and would provide the
basis for continuing with the great tradition of horse
racing at the fair to be enjoyed by generations to come."
HCF further states that revenues derived from this bill
will not only support the fair, but the breeding, owning
and racing of California horses and mules while
supplementing the existing breeding incentive programs.
This bill will allow HCF to import up to eight out-of-state
races, which is similar to the right held by harness or
quarter horse associations while operating a CHRB
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sanctioned live racing meet.
After a record-breaking meet in 2007, when total handle
exceeded $4.2 million, HCF finished 2008 with total handle
of $3.6 million. One reason for the decline was a decrease
in the number of horse races at the fair meet. HCF had a
difficult time drawing horses from northern California's
limited supply because they operate at the same time as
another fair. There were 442 runners for the 2008 meet,
compared to 504 in 2007. This trend is common for all live
horse racing meets in California.
This bill will give HCF a marketing tool to increase
on-track and off-track attendance because quality races
from an out-of-state location would be able to be offered
to their wagering patrons to offset less live races and
overall wagering opportunities. Bottom line, this bill
will give HCF a mechanism to increase track commissions and
purses while operating a live race meet.
Background. In the late 1990's, California racetracks
began importing additional races from out-of-state and
out-of-country locations to provide California's horse
racing patrons with the opportunity to wager on quality
races offered by racetracks throughout the country. Since
the introduction of this practice (which, incidentally is
authorized in many other states that likewise allow
pari-mutuel wagering on horse races), wagering on these
out-of-state races has been well received by the betting
patron, even though overall wagering in California is in
decline. In general, allowing wagering on races from
out-of-state locations has helped the industry offset a
continued reduction in on-track wagering activity and a
diminishing horse population.
Under current law, a thoroughbred racing associations or
fair is allowed to distribute the audiovisual signal and
accept wagers on the results of out-of-state (up to 32 per
day) and international thoroughbred races (unlimited)
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.
Current law also allows harness or quarter horse
associations conducting a live race meet to accept wagers
(up to eight per day) on the results of out-of-state and
out-of-country races, if specified conditions are met.
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HCF though has not been able to import additional races as
other racing associations in California have been allowed
to do and, in essence, have lost out on the opportunity to
generate additional revenues for the fair and horsemen.
Live fair racing in northern California. Historically,
since the advent of pari-mutual wagering in California in
1933, various fairs throughout the state have been
allocated racing dates by CHRB to be held in conjunction
with their fair dates. Currently, CHRB allocates racing
dates to seven fairs in northern California. The northern
California fair circuit includes 69 days of thoroughbred
and other breed racing on the grounds of the following
fairs: San Joaquin County (Stockton); Alameda County
(Pleasanton); Solano County (Vallejo); Sonoma County (Santa
Rosa); Humboldt County (Ferndale); California Exposition
and State Fair (Sacramento); and, the Big Fresno Fair
(Fresno).
PRIOR/RELATED LEGISLATION
AB 136 (Silva), 2009-2010 Legislative Session . Would
delete 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 3074 (Governmental Organization), Chapter 510, Statutes
of 2008 . Increases from 23 to 32, 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.
AB 2048 (Silva), Chapter 439, Statutes of 2008 . Allows a
harness and quarter horse racing association to import an
additional two races, from six to eight, on live racing
days from out-of-state or out-of-country locations.
SUPPORT: As of June 5, 2009:
Del Mar Thoroughbred Club
Humboldt County Board of Supervisors
Humboldt County Fair Association (sponsor)
OPPOSE: None on file as of June 5, 2009.
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FISCAL COMMITTEE: Senate Appropriations Committee
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