BILL ANALYSIS �
SB 721
Page 1
SENATE THIRD READING
SB 721 (Padilla)
As Amended June 9, 2014
2/3 vote. Urgency
SENATE VOTE :37-0
GOVERNMENTAL ORGANIZATION 16-0 APPROPRIATIONS 12-0
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|Ayes:|Hall, Nestande, |Ayes:|Gatto, Bigelow, |
| |Achadjian, Bigelow, | |Bocanegra, |
| |Cooley, Dababneh, Gray, | |Ian Calderon, Campos, |
| |Roger Hern�ndez, Jones, | |Donnelly, Gomez, Linder, |
| |Jones-Sawyer, Levine, | |Pan, Quirk, |
| |Medina, Perea, V. Manuel | |Ridley-Thomas, Wagner |
| |P�rez, Salas, Wilk | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Authorizes the Los Angeles County Fair (LACF), subject to
approval by the California Horse Racing Board (CHRB), to conduct
live racing meetings at another site within or outside of Los
Angeles County in accordance with specified provisions.
Specifically, this bill :
1)Provides that the CHRB may permit the LACF to conduct live racing
meetings at another site within or outside Los Angeles County.
The fair may conduct its racing dates at a facility operated by a
thoroughbred racing association licensed to conduct a racing
meeting in the southern zone. Provides, a racing meeting licensed
to the fair, may be operated by the fair, or the fair may contract
for the operation and management of the racing meeting with an
individual racing association that was previously licensed to
conduct a racing meeting, as specified.
2)Broadens the definition of "propositional wagering" to include
wagers on propositions approved by CHRB that are based on the
results of a live thoroughbred horse race, instead of just quarter
horse or harness horse race or races in current law.
3)Makes minor code maintenance changes to horse racing law by
repealing obsolete references to license fees for racing meetings
at fairs.
SB 721
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EXISTING LAW :
1)Provides the CHRB with the authority to allocate racing weeks to
an applicant pursuant to the provisions of the Horse Racing Law
and to specify such racing days, dates and hours for horse racing
meetings as will be in the public interest.
2)Provides that the maximum number of racing weeks that may be
allocated for horse racing other than at fairs, shall be as
follows: for thoroughbred racing, 44 weeks per year in the
northern zone; and 49 weeks per year in the combined central and
southern zones. From the weeks available in the combined central
and southern zones, the CHRB shall allocate a minimum of seven
weeks per year to a thoroughbred racing association to conduct
thoroughbred racing at a racetrack that was used to conduct a
thoroughbred race meeting in the southern zone prior to 2012.
3)Provides that from the weeks available in the combined central and
southern zones, the CHRB shall allocate a minimum of 25 weeks per
year to a thoroughbred racing association to conduct thoroughbred
racing at a racetrack that was used to conduct a thoroughbred race
meeting in the central zone prior to 2012. From the weeks
available in the combined central and southern zones, the board
may allocate a maximum of five weeks per year to a thoroughbred
racing association to conduct thoroughbred racing at a racetrack
in the southern zone that was not used to conduct a thoroughbred
race meeting in the southern zone prior to 2012.
4)Authorizes any county or district agricultural association fair
conducting racing meetings for the first time on or after January
1, 1979, to retain the applicable state license fee for payment of
a capital expense loan incurred for the purpose of preparing its
facilities for horse racing.
5)Defines "proposition parimutuel pool" as the total wagers on
propositions approved by CHRB that are based on the results of a
live harness or quarter horse race. The total wagers made in the
proposition pool are subject to the same license fee as exotic
wagers on a live harness or quarter horse race, and commissions
and purses shall be distributed in the amounts mutually agreed
upon by the association and the organization representing the
horsemen and women.
SB 721
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FISCAL EFFECT : According to the Assembly Appropriations Committee,
minor and absorbable costs to CHRB.
COMMENTS :
Purpose of the bill: According to the author's office, declining
daily attendance at California's race tracks has led to diminished
on-track betting revenue which in turn has led to smaller purses and
reduced income for the horsemen involved. This bill will provide
the industry with a mechanism to increase track commissions, purses,
and breeder's awards for the participants in this agribusiness.
This bill is intended to preserve jobs and assure that live horse
racing remains economically viable in southern California.
The LACF, the sponsor of this bill, states "that permitting LACF to
conduct its 2014 and 2015 race meets at Los Alamitos Race Course is
in the best interest of the public, fair racing, and the southern
California racing circuit. The future of fair racing at LACF is
bleak due, in part, to the condition of its racing facilities. The
newly expanded and renovated Los Alamitos facility would
significantly benefit the southern California racing circuit by
allowing its live race meet to be held at much improved and more
desirable location for Thoroughbreds, their trainers and owners."
According to the author's office, various sections of California law
reference horse racing license fees in conjunction with the network
of California fairs despite enactment of SB 16 X2 (Ashburn), Chapter
12, Statutes of 2009-10 Second Extraordinary Session. This measure
would delete reference to those license fees.
Lastly, supporters note that the definition of propositional wagers
in current law is restricted to harness or quarter horse races only,
and suggest that propositional wagering opportunities should be
available on thoroughbred races as well. The author states that
propositional wagers might be a useful marketing tool to increase
public awareness of a special event, such as the Breeders' Cup,
Kentucky Derby or any of the other Triple Crown races.
Background: For more than 70 years, Fairplex has been the home of
horse racing at the LACF. In April 2014, the LACF announced its
intention to transfer its 2014 live racing dates, contingent upon
CHRB approval, to Los Alamitos Race Course in Orange County. The
fair has been granted approval by the CHRB to run an 11-day meet in
2014 from September 5 to 21.
SB 721
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Los Alamitos, California's nighttime quarter horse racing facility
was granted thoroughbred dates in 2014 as part of the state racing
industry's response to the closure of Hollywood Park. Other dates
previously held by Hollywood Park were awarded to Del Mar and Santa
Anita. The track, located in Cypress on the northern end of Orange
County, was previously approved for five weeks of racing - two weeks
in July and three more in December. If LACF was to move its dates,
the additional dates would be bring the total to eight weeks of live
horse racing at the facility.
Los Alamitos Race Course recently expanded its main oval from five
furlongs to nearly a mile and is making grandstand renovations for
their race meet which begins on July 3, 2014. The track is also in
the process of adding stalls on the backstretch to accommodate up to
700 additional horses. Temporary stalls could make room for as many
as 900 horses during the running of meets. Los Alamitos does not
have a turf course.
The potential transfer of fair racing dates to Los Alamitos
continues an ever-evolving year of change for thoroughbred racing in
Southern California. Hollywood Park closed its barn area in
January, leading to an expansion of Thoroughbred training at Los
Alamitos, Fairplex Park, and the San Luis Rey Downs training center
in northern San Diego County.
According to LACF, "the fair has enjoyed a long and proud history of
horse racing here at Fairplex, but with the limitations of our
facility we made a strategic decision for the continued growth of
the industry to reach out to Los Alamitos and seek to move our dates
to their facility. By moving our dates to a new market on a
one-mile track we think we can grow on the past success of our race
meet."
LACF notes that "its facilities are marginally adequate for 'fair
racing,' but not for thoroughbred racing at the highest level. LACF
does not have the capital and financial resources necessary to
upgrade its existing facilities to a premier level. The costs of
such necessary upgrades, including expenses associated with
necessary compliance with the Clean Water Act which would be
required for year around use, have been previously reviewed and
evaluated, and are estimated to be $40 million or more. Even if the
necessary capital was available, such an investment could not be
economically justified."
SB 721
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Lastly, LACF notes during the past five years, on-track handle
decreased by 35%, while total fair attendance increased by 5%. The
LACF will continue to offer wagering on horse racing via satellite
at its Finish Line Sports Grill.
Supporters conclude by moving the fair's race dates to Orange
County, Los Alamitos will be able to attract more horses to race,
induce more patrons to attend the races while increasing the size of
the handle (money bet) compared to operating a live race meet at
LACF.
There is no opposition on file.
Analysis Prepared by : Eric Johnson / G.O. / (916) 319-2531
FN: 0003948