BILL ANALYSIS
Bill No: SB
899
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
SB 899 Author: Denham
As Introduced: January 26, 2010
Hearing Date: April 27, 2010
Consultant: Chris Lindstrom
SUBJECT
Horse racing: satellite wagering: out-of-country
thoroughbred races.
DESCRIPTION
SB 899 deletes the statewide cap on the number of
out-of-country thoroughbred races that a thoroughbred
racing association or fair may import, simulcast and on
which wagers may be accepted.
Specifically, the bill strikes the following language from
the Horse Racing Law authorizing the importation,
simulcasting and wagering on out-of-country thoroughbred
races:
19596.3. (b) The total number of out-of-country
thoroughbred races on which wagers are allowed to be
accepted statewide in any given year shall not exceed
the total number of out-of-country thoroughbred races
on which wagers were accepted in 1998.
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.
SB 899 (Denham) continued
Page 2
Existing law provides that the California Horse Racing
Board (CHRB) regulate the various forms of horse racing
authorized in this state.
Existing law authorizes a thoroughbred racing association
or fair to distribute the audiovisual signal and accept
wagers on the results of out-of-country thoroughbred races
during the calendar period the association or fair is
conducting a race meeting, without the consent of the
participating horsemen's organization.
Existing law limits the total number of out-of-country
thoroughbred races on which wagers are allowed to be
accepted statewide in any given year to the total number of
out-of-country thoroughbred races on which wagers were
accepted in 1998.
Existing law provides that no thoroughbred association or
fair may accept wagers pursuant to this section on
out-of-country races commencing after 5:30 p.m. without the
consent of the harness or quarter horse racing association
that is then conducting a live racing meeting.
Existing law authorizes the CHRB to approve the
establishment of 15 mini-satellite wagering sites in each
zone (for a total of 45) and defines "minisatellite
wagering site" to mean a location where satellite wagering
may be conducted, with the approval of the CHRB, provided
that the wagering occurs in an area that is restricted to
those who are 21 years of age or older.
BACKGROUND
Purpose of the bill . According to the sponsor, "There is
an inconsistency in the current law with respect to the
importation of other types of simulcast races. In the
prior legislative session, the annual cap on imported
out-of-state and out-of-country harness and quarter horse
races was eliminated (B&P 16596.1). Similarly, the annual
cap on imported out-of-state thoroughbred races was
eliminated (B&P 19596.2); however, there was an
unintentional oversight that left the annual cap on
out-of-country thoroughbred races unchanged."
Background . The scale and scope of horse racing is
governed by statute. Any attempt to expand its market
SB 899 (Denham) continued
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requires legislative action. The California Legislature
has attempted to address the racing industry's long-term
viability through a number of legislative efforts to expand
the exposure of horse racing to the general public and
enhance horse racing's marketability.
Current law limits the number of out-of-country
thoroughbred races authorized to be imported for wagering
purposes in any given year to no more than the total that
were accepted in 1998.
In 1998, legislation was enacted to provide for limited
growth on the number of out-of-state thoroughbred races
that may be imported and wagered upon when an association
is conducting a race meeting. SB 27 (Maddy) of 1998,
limited the number of imported races that may be wagered
upon to 20 per day and 10,734 per year statewide. These
restrictions were intended to address the Administration's
concerns relative to the expansion of gambling and the fear
that importing out-of-state races might cannibalize the
live racing product in California.
As a result of the restricted expansion authorized by SB
27, many California race tracks dropped international
thoroughbred races that were once imported from Hong Kong
and Australia and available in the evening market.
Instead, they selected to import the daytime race cards
from racing associations located in other states. Also,
there was no cannibalization of the live racing product in
California as feared.
In addition to SB 27, there are a number of other notable
measures that were enacted to help promote California's
horse racing industry. In 1984 and 1987, respectively,
legislation by Senator Maddy authorized and then expanded
satellite wagering statewide. AB 471 (Hertzberg), Chapter
198, Statutes of 2001, authorized until January 1, 2008,
Advance Deposit Wagering (ADW) in California. AB 765
(Evans), Chapter 613, Statutes of 2007, extends ADW
indefinitely. AB 509 (J. Horton), Chapter 235, Statutes of
2004 authorizes a thoroughbred or fair association to
import out-of-country thoroughbred races during the
calendar period that the association or fair is conducting
a race meeting, as specified. AB 241 (Price), Chapter 594,
Statutes of 2007, authorizes each fair to operate a
satellite wagering facility off of the fair grounds as well
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as up to 45 mini-satellite wagering sites to be operated by
private industry throughout California. AB 3074
(Governmental Organization), Chapter 510, Statutes of 2008,
eliminates the ceiling on the total number of out-of-state
thoroughbred races that may be imported in a given year and
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.
Satellite wagering. Satellite wagering via an off-track
facility has been legal in California since 1985. It was
authorized at a time when California racetracks were
beginning to experience declining attendance and handle
figures. The industry believed that making the product
easier to access not only would expose and market horse
racing to potential customers, but also would make it more
convenient for the existing patrons to wager more often.
Simulcasting. Simulcasting is the process of transmitting
the audio and video signal of a live racing performance
from one facility to a satellite for retransmission to
other locations or venues where pari-mutuel wagering is
permitted. Simulcasting provides racetracks with the
opportunity to increase revenues by exporting their live
racing content to as many wagering locations as possible,
such as other racetracks, fair satellite facilities and
Indian casinos. Revenues are increased because
simulcasting provides racetracks that export their live
content with additional customers in multiple locations who
would not have otherwise been able to place wagers on the
live racing event.
PRIOR/RELATED LEGISLATION
AB 3074 (Governmental Organization), Chapter 510, Statutes
of 2008 . Eliminates the ceiling on the total number of
out-of-state thoroughbred races that may be imported in a
given year. 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 1736 (Governmental Organization), Chapter 444, Statutes
of 2007 . Adds the Travers Stakes to the group of specific
stake races which are exempt from the 23-race per day limit
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on imported races, as specified.
SB 379 (Denham), Chapter 443, Statutes of 2007 . Adds the
Dubai World Cup race to a specified list of races that
would be exempted from the 23 race per day limit on
imported races for satellite wagering in California.
AB 509 (J. Horton), Chapter 235, Statutes of 2004 .
Increases the number of out-of-country horse races that
California racing associations and fairs may simulcast and
accept wagers by removing the limitation on out-of-country
races.
SB 590 (Perata), Chapter 936, Statutes of 2001 . Authorizes
thoroughbred racing associations and fairs in the northern
racing zone to increase the number of imported racing
simulcasts available to be wagered upon if the reduces the
number of live racing days.
SB 263 (Perata), Chapter 219, Statutes of 1999 . Increases
from 20 to 23 the number of thoroughbred race simulcasts
that may be imported by racing associations and fairs on
days when live thoroughbred or fair racing is being
conducted in California. Exempts from this limitation:
(1) any imported races that are part of the race card for
the Kentucky Derby, the Kentucky Oaks, the Preakness
Stakes, the Belmont States, the Jockey Club Gold Cup, the
Breeders' Cup, or the Haskell Invitational; and (2) races
conducted in either the northern or the combined central
and southern zones, respectively, when no live racing is
being conducted in the particular zone.
SB 27 (Maddy), Chapter 335, Statutes of 1998 . In addition
to giving the horse racing industry some $40 million in
license fee relief, this bill also authorized thoroughbred
racing associations and fairs, to import an amount not
exceeding 20 out-of-state and or out-of-country
thoroughbred races during the time the association or fair
is conducting a racing meeting.
SB 14 (Maddy), Chapter 1273, Statues of 1987 . Expanded
satellite wagering statewide.
SB 1499 (Maddy), Chapter 1698, Statutes of 1984 .
Implemented satellite wagering in the central and southern
part of the state, and made conforming and technical
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changes in the northern part of the state.
SUPPORT : None on file as of April 23, 2010.
OPPOSE : None on file as of April 23, 2010.
FISCAL COMMITTEE : No
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