BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 693|
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THIRD READING
Bill No: SB 693
Author: Harman (R)
Amended: 4/13/09
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 13-0, 4/14/09
AYES: Wright, Harman, Benoit, Calderon, Denham, Florez,
Negrete McLeod, Oropeza, Padilla, Romero, Wiggins,
Wyland, Yee
SUBJECT : Horse racing: advance deposit wagering:
satellite
wagering facilities
SOURCE : Los Alamitos Race Course
DIGEST : This bill modifies the commissions paid to
satellite wagering facilities based on the time that the
satellite wagering facilities are open and operating.
ANALYSIS :
Existing Law
1. Provides for the California Horse Racing Board (CHRB) to
regulate the various forms of horse racing authorized in
this state.
2. Authorizes CHRB to permit licensed racing associations,
fairs and mini-satellites licensees to operate satellite
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wagering facilities.
3. Authorizes and defines "advance deposit wagering (ADW)"
as a form of parimutuel wagering in which a person
"establishes an account with a board-approved betting
system or wagering hub where the account owner provides
"wagering instructions" authorizing the entity holding
the account to place wagers on the owner's behalf."
4. Provides that two percent of the first $250 million of
handle (and a sliding downward scale thereafter) from
advance deposit wagers be distributed to satellite
wagering facilities as commissions.
5. Provides satellite facilities that were not operational
in 2001 are not eligible for satellite wagering
commission distributions.
6. Provides the satellite wagering facility commissions
calculated pursuant to the ADW handle are distributed to
each satellite wagering facility in the zone in which
the wager originated in the same relative proportions
that the satellite wagering facility generated satellite
commissions during the previous calendar year.
7. Provides that if there is a reduction in the satellite
wagering commissions, the resulting benefits 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.
This bill:
1. Provides that if a satellite wagering facility is
permanently closed, other than for renovation or
remodeling, then the commissions payable to that
facility shall be eliminated entirely.
2. Provides that if a satellite wagering facility is
unwilling or unable to accept all of the signals that
are available to that facility, then the commissions
payable to that facility would be proportionately
reduced to take into account the time that satellite
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wagering is no longer conducted at that facility.
3. The satellite wagering commissions not paid shall be
redistributed proportionately to other eligible
satellite facilities.
4. Makes other technical changes.
Background
When ADW was authorized in California, it was recognized
that it might impact attendance at satellite wagering
facilities and, thus, satellite wagering facilities would
incur a loss of business. To account for this impact, a
portion of the take-out from every advance deposit wager is
designated to go to satellite wagering facilities as a
commission or "impact fee".
Under the construct of current law, satellite wagering
facilities can receive ADW commissions or impact fees on
races for which they do not accept the signal. For
example, if a satellite wagering facility shuts down
operations at 6 o'clock in the evening and does not offer
wagering on the night signal (Quarter horse and Harness
racing), the facility will still receive the commission on
those night races.
Additionally, under current law, all satellite facilities
in business prior to 2001 are eligible for ADW commissions.
So, if a fair decides to shut down its satellite wagering
facility entirely, because it had been in existence prior
to 2001, it continues to receive ADW commissions.
This bill intends to clean up this provision of law by
clarifying that satellite wagering facilities are eligible
for ADW commissions only from races on which they offer
wagering. The bill provides that money not distributed to
satellites as commissions or impact fees from ADW wagers as
a result of this change, instead will flow be distributed
proportionately to the other eligible satellite facilities.
ADW constitutes about $600 million in handle for the horse
racing business. It has become an important segment of the
industry, in fact, it is the only segment that has been
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growing.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/15/09)
Los Alamitos Race Course (source)
TSM:do 4/15/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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