BILL ANALYSIS �
AB 270
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ASSEMBLY THIRD READING
AB 270 (Perea)
As Introduced February 7, 2011
Majority vote
GOVERNMENTAL ORGANIZATION 17-0
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|Ayes:|Hall, Nestande, Atkins, | | |
| |Block, Blumenfield, | | |
| |Chesbro, Cook, Galgiani, | | |
| |Garrick, Gatto, Hill, | | |
| |Jeffries, Ma, Perea, V. | | |
| |Manuel P�rez, Silva, | | |
| |Torres | | |
| | | | |
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SUMMARY : Creates an exception to Horse Racing Law by authorizing a
satellite wagering facility, located on a fairground to elect not to
be subject to the requirements related to a satellite facility
supervisor if the board of directors of the fair, after a public
hearing, deems those requirements to be not economically feasible.
FISCAL EFFECT : This bill has been keyed non-fiscal by Legislative
Counsel.
COMMENTS :
Purpose of the bill : According to the author, this bill will
provide greater financial flexibility to satellite wagering
facilities on fairgrounds that find themselves in difficult
financial situations due to the mandatory staffing language in
current law relating to satellite supervisors.
Over the years, expenses have increased considerably while the
mechanism to generate revenue to cover specific overhead expenses is
limited by Horse Racing Law (2% commission on each dollar wagered).
Due to declining attendance, increased costs and other factors, some
smaller fair satellite wagering facilities have been faced with the
decision to close their wagering operations. This bill would
provide flexibility in managing overhead costs which could allow for
these facilities to remain in operation generating revenue for the
fair and California's horse racing industry.
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The author notes that county fairs and agricultural associations
receive a great deal of their revenue from wagering on horse racing,
so it is in their best interest to ensure that satellite wagering
remains a viable facet of their business operations. Additionally,
this bill is intended to ensure that the California horse racing
industry remains viable as an agribusiness within the state.
Background :
Duties of a Simulcast Facility Supervisor : The simulcast facility
supervisor is responsible for the oversight of the facility to
ensure compliance with the California Horse Racing Board's (CHRB)
laws, rules and regulations. The duties, in addition to any duties
and responsibilities required by his or her employer, include, but
are not limited to, immediately reporting to the CHRB or its
stewards, in writing or by telephone, any violation of the CHRB's
rules or regulations which come to their attention or of which they
have knowledge. This includes referrals of matters involving
misconduct of licensees to the host track stewards and ordering the
exclusion or ejection of persons who are prohibited from
participating in pari-mutuel wagering and from being present within
any racing inclosure during a recognized race meeting. Additional
duties include maintaining minutes of the conduct of each day's
events at the simulcast location where assigned, supervising all
phases of the facility which are directly related to the
requirements of the CHRB's laws and regulations at the simulcast
location.
California's off-track wagering system : California has allowed
off-track betting in satellite wagering facilities located at fairs
and racing associations throughout the state for 26 years. 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.
Currently, there are 34 satellite-wagering facilities in California.
Six of the facilities are at privately owned racetracks, eight at
fairs that conduct live racing, 15 at county fairs and district
agricultural associations, and three on Indian lands.
Simulcast-only facilities do not have live racing; those facilities
accept wagers on races broadcast via simulcast from in-state and
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out-of-state racetracks.
In 2007, AB 241 (Price), Chapter 594, Statutes of 2007, was enacted
to authorize the creation of 15 additional "minisatellites" in each
racing zone for a total of 45. The stated intent of this
legislation was to make the sport of horse racing even more
accessible to potential California bettors and to increase the
handle - the amount wagered on horse races - by giving preference to
minisatellites that will generate the largest handle if more than 15
applications for minisatellites are submitted to CHRB for a given
zone. To date, only two mini-satellites have been opened statewide.
In addition, since the mid-1990's, seven state-designated or county
fairs have received the statutory authority to locate additional
satellite-wagering facilities off the respective fairgrounds but
within the boundaries of the fair district. To date, only the
Fresno County Fair has exercised this authority by leasing space in
a card-club in downtown Fresno.
Simulcasting wagering : 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.
Attendance declines : There has been a general decline in the number
of people attending and wagering at live horse racetracks in
California due to a number of factors, including increased
competition from other forms of gaming, unwillingness of customers
to travel a significant distance to racetracks and the availability
of off-track wagering. The declining attendance at live horse
racing events has prompted racetracks to rely on revenues from
in-state and out-of-state satellite wagering and advance deposit
wagering.
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
AB 270
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