BILL ANALYSIS
SB 899
Page 1
Date of Hearing: June 16, 2010
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
SB 899 (Denham) - As Introduced: January 26, 2010
SENATE VOTE : 34-0
SUBJECT : Horse racing: satellite wagering: out-of-country
thoroughbred races.
SUMMARY : 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, this bill :
1)Deletes from the Horse Racing Law a provision that 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.
EXISTING LAW :
1)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.
2)Provides that the California Horse Racing Board (CHRB)
regulate the various forms of horse racing authorized in this
state.
3)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.
4)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.
5)Provides that no thoroughbred association or fair may accept
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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.
FISCAL EFFECT : Unknown.
COMMENTS :
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.
Similarly, the annual cap on imported out-of-state thoroughbred
races was eliminated; 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 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
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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 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
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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.
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 263 (Perata), Chapter 219, Statutes of 1999. Increased 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.
REGISTERED SUPPORT / OPPOSITION :
Support
Golden Gate Fields
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Hollywood Park Race Track
Santa Anita Park
Thoroughbred Owners of California (source)
Opposition
None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531