BILL ANALYSIS �
Bill No: AB
2693
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Staff Analysis
AB 2693 Author: Committee on Governmental Organization
As Introduced: March 15, 2012
Hearing Date: June 26, 2012
Consultant: Art Terzakis
SUBJECT
Horse Racing
DESCRIPTION
AB 2693 adds the "Arkansas Derby" to the group of stake
races in Horse Racing Law which are exempt from the 50-race
per day limit on imported races.
EXISTING LAW
Existing law provides that the California Horse Racing
Board (CHRB) shall regulate the various forms of horse
racing authorized in this state.
Existing law limits the number of races that may be
imported by associations and fairs to no more than 50 races
per day on days when live thoroughbred or fair racing is
being conducted in this state, with specified exceptions.
Existing law exempts from that 50 race per day limit races
imported that are part of the race card of certain
prominent races, including the Kentucky Derby, the Kentucky
Oaks, the Preakness Stakes, the Belmont Stakes, the Jockey
Club Gold Cup, the Travers Stakes, the Arlington Million,
the Breeders' Cup, the Dubai Cup, or the Haskell
Invitational.
Existing law authorizes thoroughbred racing associations or
fairs to distribute the audiovisual signal and accept
AB 2693 (Committee on Governmental Organization)
continuedPage 2
wagers on the results of out-of-state and international
thoroughbred races during the calendar period the
association or fair is conducting live racing, including
days on which there is no live racing being conducted by
the association or fair.
BACKGROUND
Arkansas Derby : The Arkansas Derby is a Grade 1 stakes
race for three-year-old thoroughbreds, which is held
annually at Oaklawn Park in Hot Springs, Arkansas. Each
April, this prestigious race acts as a major prep for
three-year-old horses with winners having gone on to
victory in major stakes races. The inaugural Arkansas
Derby in 1936 offered a total purse of $5,000 - the first
winner was Holl Image.
Additional past winners of the Arkansas Derby include 1980
winner Temperence Hill and 1998's Victory Gallop both of
which went on to capture the Belmont Stakes. Sunny's Halo
won the 1983 Kentucky Derby as did Smarty Jones in 2004.
Elocutionist (1976), Tank's Prospect (1985), Pine Bluff
(1992), Smarty Jones (2004) all won the Preakness Stakes.
The 1994 winner, Concern, won that year's Breeders' Cup
Classic.
Purpose of AB 2693 : This measure provides that all races
imported by a Thoroughbred association or fair that are
part of the race card of the overall Arkansas Derby day
would be exempted from the 50 race per day limit as defined
in current law. Over the years, this law has been amended
to allow specific notable races to be imported outside of
this cap for promotional and financial reasons.
The author's office notes that this measure is intended to
help increase the wagering handle on this specific day
(Arkansas Derby) which will lead to increased purses,
racetrack revenue, and breeders' awards in California.
Purses are important to California's racing industry
because they provide revenue to horse owners for their
racing operations and to breeders through an increase in
the value of their breeding stock. The author's office
states that "California's racing industry has found that
it's much easier to make a big day bigger relative to their
AB 2693 (Committee on Governmental Organization)
continuedPage 3
marketing efforts rather than trying to increase attendance
on a typical Wednesday or Thursday." The author's office
believes that AB 2693 will also provide the racing industry
a marketing tool to increase on-track and off-track
attendance on this designated day because racing fans will
want to wager on all the races from the host track of the
prestigious Arkansas Derby horse race.
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 re-transmission 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.
Racetrack Attendance: Over the past 20 years the industry
has witnessed 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 account wagering.
PRIOR/RELATED LEGISLATION
AB 2520 (Hall) 2011-12 Session. Would increase the number
of races quarter or harness racing associations are allowed
to import for simulcast wagering purposes from 8 to 10 per
AB 2693 (Committee on Governmental Organization)
continuedPage 4
day on live racing days. (Pending in Senate
Appropriations)
AB 707 (Garrick) Chapter 84, Statutes of 2011. Increased
from 32 to 50, 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 with approval by the CHRB.
AB 562 (Hall) 2011-12 Session. Would add the Wood Memorial
to the group of stake races in Horse Racing Law which are
exempt from the 32-race per day limit on imported races.
(Pending in Senate Committee on Rules)
AB 2790 (Governmental Organization) Chapter 141, Statutes
of 2010. Added the "Arlington Million" to the list of
imported races not subject to the limitation of 32 races
per day.
SB 899 (Denham) Chapter 279, Statutes of 2010. Deleted 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
statewide in any given year.
AB 1857 (Cook) 2009-10 Session. Would have increased from
32 to 36 the total number of thoroughbred horse races that
may be imported statewide for satellite simulcast and
wagering, not including numerous specified exceptions to
this cap. (Held in this Committee at author's request)
AB 136 (Silva) Chapter 221, Statutes of 2009. Deleted the
limitation on the total number of out-of-state or
out-of-country harness or quarter horse races that may be
imported in a calendar year by a harness or quarter horse
racing association.
AB 763 (Chesbro) Chapter 122, Statutes of 2009.
Authorized the Humboldt County Fair to offer satellite
wagering on eight out-of-state races during the August days
when the fair is offering live racing, if specified
conditions are met.
AB 2048 (Silva) Chapter 439, Statutes of 2008. Among other
things, increased by two (from six to eight) the number of
races that a harness and quarter horse racing association
AB 2693 (Committee on Governmental Organization)
continuedPage 5
could import on live racing days from out-of-state and
out-of-country locations.
AB 3074 (Governmental Organization) Chapter 508, Statutes
of 2008. Authorized the CHRB to allow harness racing
tracks to accept wagers during the Kentucky Futurity and
increased from 23 to 32 the total number of thoroughbred
races that may be imported statewide for satellite wagering
by associations or fairs.
SB 379 (Denham) Chapter 443, Statutes of 2007. Added the
"Dubai World Cup" to a specified day of races that would be
exempted from the 23-race day limit on imported races for
satellite wagering.
AB 241 (Price) Chapter 594, Statutes of 2007. Among other
things, authorized all fairs to operate a satellite
wagering facility off of the fair grounds. In addition,
authorized the establishment of up to 45 "mini-satellite"
wagering sites to be operated by private industry
throughout the state.
AB 1736 (Governmental Organization) Chapter 444, Statutes
of 2007. Added the "Travers Stakes" to a specified day of
races that would be exempted from the 23-race day limit on
imported races for satellite wagering.
SB 1183 (Margett) Chapter 232, Statutes of 2004.
Authorized a harness racing association that is conducting
a live race meeting to accept wagers on the full card of
races conducted by another racing association on the day
the other racing association conducts the Breeder's Crown
Stakes, the Meadowlands Pace, the Hambletonian or the North
American Cup.
AB 509 (Jerome Horton) Chapter 235, Statutes of 2004.
Allowed a thoroughbred racing association or fair to import
the audiovisual signal, and accept wagers on, the results
of out-of-country thoroughbred races.
SB 2035 (Karnette) Chapter 268, Statutes of 2002. Allowed
a harness or quarter horse racing association to "bank" up
to two out-of-state or out-of-country imported races on a
specific race day, and then add those races to another race
day's importation schedule.
SB 27 (Maddy) Chapter 335, Statutes of 1998. Among other
AB 2693 (Committee on Governmental Organization)
continuedPage 6
things, authorized wagering on the results of out-of-state
thoroughbred races provided that the total number accepted
statewide in any given year does not exceed the total
number of thoroughbred races on which wagers were accepted
in 1998. Also, capped the total number of thoroughbred
races imported at 23 per day.
SUPPORT: None on file as of June 22, 2012.
OPPOSE: None on file as of June 22, 2012.
FISCAL COMMITTEE: No.
**********