BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2215 (Fuentes)
Hearing Date: 08/02/2010 Amended: 06/24/2010
Consultant: Maureen Ortiz Policy Vote: GO 8-0
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BILL SUMMARY: AB 2215 requires the California Horse Racing
Board (CHRB) to develop and adopt rules to license and regulate
advance deposit wagering activity that takes place within a
mini-satellite wagering facility.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Admin expenses ----unknown, less than $50
annually--- General
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STAFF COMMENTS:
AB 2215 authorizes CHRB to recover any costs associated with
this requirement either directly from the advance deposit
wagering (ADW) provider or through an appropriate increase in
the funding formula devised by the board.
Current law, AB 241 (Price) Chapter 594 Statutes of 2007, allows
for the establishment of 45 mini-satellite wagering facilities
throughout the state, fifteen in each zone. However, at this
time only one has been established due to financial challenges.
Proposed mini satellite facilities such as sports bars,
restaurants, and card clubs have been slow to develop since the
costs to facilitate a wager is the same no matter where the
wager takes places. The facility retains a 2% commission, and
the remainder of the wagers is distributed throughout a variety
of ways including purses, owner commissions, and support for
workers' compensation for backstretch employees and a pension
fund for jockeys.
ADW wagering has been authorized since 2002 at racing
associations, fairs, and satellite wagering facilities. AB 2215
will extend that authorization to mini-satellite wagering
facilities in order to establish another distribution method for
wagering on horse racings. It is intended to make the operation
of mini-satellites more viable from a financial prospective
while allowing California's racing industry to market their
product to new and existing patrons.
There are currently four companies approved by the CHRB to
provide ADW services to California customers. To use an ADW
service, a consumer deposits money on an account with the
provider, and then can use those funds to place bets on-line and
over the phone. ADW constitutes about $600 million in handle for
the horse racing industry, and is the only segment that has been
growing.
Page 2
AB 2215 (Fuentes)
"Advance deposit wagering" (ADW) is 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.
ADW providers must be licensed by the CHRB, and a racing
association or fair conducting the races must agree in writing
to allow advance deposit wagering.
Staff recommends an amendment on page 16, lines 11 and 12, to
delete "and who, as of the date of their retirement, had ridden
in a minimum of 1,250 parimutuel races conducted in California"
to avoid chaptering out AB1152 (Chapter 53, Statutes of 2010).
AB 1152, among other things, deleted the requirement that a
jockey ride a minimum of 1,250 rides in order to participate in
the pension fund, however, that vesting requirement was
determined to be in conflict with IRS regulations.