BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 721
Author: Padilla (D)
Amended: 6/9/14
Vote: 27 - Urgency
SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 11-0, 4/9/13
AYES: Wright, Nielsen, Berryhill, Calderon, Cannella, Correa,
De Le�n, Galgiani, Hernandez, Lieu, Padilla
SENATE APPROPRIATIONS COMMITTEE : 7-0, 4/22/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SENATE FLOOR : 37-0, 4/29/13 (Consent)
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De Le�n, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla,
Pavley, Price, Roth, Steinberg, Walters, Wolk, Wright, Wyland,
Yee
NO VOTE RECORDED: Liu, Vacancy, Vacancy
ASSEMBLY FLOOR : 76-0, 6/16/14 - See last page for vote
SUBJECT : Horse racing
SOURCE : Los Alamitos Race Course
Los Angeles County Fair Association
DIGEST : This bill makes changes to the Horse Racing Law by
authorizing the Los Angeles County Fair (LACF) to conduct live
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races, as specified; prohibits the California Horse Racing Board
(CHRB) from allocating racing dates to a thoroughbred racing
association in central or southern zones if a fair racing
association is conducting racing in either zone on the same
dates; expands the definition of "proposition parimutuel pool"
to include thoroughbred racing; deletes obsolete references; and
makes other technical changes.
Assembly Amendments expand the definition of "proposition
parimutuel pool"; prohibit CHRB from allocating racing dates, as
specified; and authorize LACF to conduct live racing meetings at
specified sites.
ANALYSIS :
Existing law:
1. Provides 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, 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, 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.
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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.
This bill:
1. Expands the definition of "proposition parimutuel pool,"
which relates to the total propositional wagering (i.e.,
wagering on events other than the outcome of the race), to
include thoroughbred racing in addition to quarter horse and
harness racing.
2. Clarifies that CHRB may not allocate racing dates to a
thoroughbred racing association in the central or southern
zones if a fair racing association is conducting racing in
either zone on the same dates.
3. Repeals obsolete references to license fees for racing
meetings at fairs.
4. Authorizes LACF, subject to approval from CHRB, to conduct
live races at another licensed thoroughbred racing facility
in Los Angeles County or the southern zone (which includes
Orange County), and allows LACF to contract for the operation
and management of those races.
Background
For more than 70 years, Fairplex has been the home of horse
racing at LACF. In April 2014, LACF announced its intention to
transfer its 2014 live racing dates, contingent upon CHRB
approval, to Los Alamitos Race Course in Orange County. LACF has
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been granted approval by CHRB to run an 11-day meet in 2014 from
September 5 to 21.
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
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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."
Lastly, LACF notes during the past five years, on-track handle
decreased35%, while total fair attendance increased by 5%. LACF
will continue to offer wagering on horse racing via satellite at
its Finish Line Sports Grill.
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.
Comments
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, there are
minor, absorbable costs to the CHRB (General).
SUPPORT : (Verified 6/18/14)
Los Alamitos Race Course (co-source)
Los Angeles County Fair Association (co-source)
California Thoroughbred Breeders Association
Del Mar Thoroughbred Club
Fairplex Racing Association
Oak Tree Racing Association
Thoroughbred Owners of California
ARGUMENTS IN SUPPORT : The Los Angeles County Fair
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Association, 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.
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's
office 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.
ASSEMBLY FLOOR : 76-0, 6/16/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Ch�vez, Chesbro, Conway, Cooley, Dababneh,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Atkins
NO VOTE RECORDED: Bigelow, Grove, Yamada, Vacancy
MW:k 6/18/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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