BILL ANALYSIS �
Bill No: SB
1003
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
SB 1003 Author: Evans
As Introduced: February 13, 2014
Hearing Date: April 8, 2014
Consultant: Art Terzakis
SUBJECT
Horse Racing: out-of-state thoroughbred races
DESCRIPTION
SB 1003 increases from 50 to 55 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
California Horse Racing Board (CHRB).
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, the Arkansas Derby or the
Haskell Invitational.
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Existing law authorizes thoroughbred racing associations or
fairs to distribute the audiovisual signal and accept
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
Purpose of SB 1003: This measure proposes to increase the
number of out-of-state races on which thoroughbred and fair
racing associations may simulcast and accept wagers on each
day from 50 to 55. The author's office contends that by
allowing thoroughbred and fair racing associations to
import more out-of-state races, it will give the horse
racing industry a marketing tool and leverage with
racetracks outside of this state. Presently, due to
specific importation restrictions, thoroughbred and fair
racing associations are sending their signal to
out-of-state locations, but are not able to receive the
maximum rate for their live racing product. However, if
these racing associations were able to accept more
out-of-state races under some type of reciprocity
agreement, a majority of the money wagered between the two
markets would stay in this state for track commissions,
purses, and breeders' awards.
The author's office also points out that racing fairs
continue to face growing competition in the "wagering"
world and must compete with various types of gambling
options such as advanced deposit wagering (ADW) which is a
form of betting on horse races conducted via the Internet
or by telephone. The author's office believes that SB 1003
will enable satellite wagering facilities to be more
competitive with ADW providers which have no caps on the
number of races offered to patrons in California.
Furthermore, the author's office emphasizes that SB 1003
will provide the industry a marketing tool to increase
on-track and off-track attendance as a result of more
quality races from out-of-state locations being offered to
their wagering patrons on a daily basis.
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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 parimutuel 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
otherwise would not have been able to place wagers on the
live racing event.
Racetrack Attendance: Over the past 25 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 2655 (Hall) 2013-14 Session. Would add the "Apple
Blossom Handicap" to the group of stake races in Horse
Racing Law which are exempt from the 50-race per day limit
on imported races. (Pending in Assembly G.O. Committee)
AB 1347 (Gray) 2013-14 Session. Among other things, would
add the "Wood Memorial" to the group of stake races in
Horse Racing Law which are exempt from the 50-race per day
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limit on imported races. (Currently on the Senate Inactive
File)
AB 2693 (Governmental Organization), Chapter 350, Statutes
of 2012. Among other things, added 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.
AB 2520 (Hall), Chapter 347, Statutes of 2012. Increased
the number of races quarter or harness racing associations
are allowed to import for simulcast wagering purposes from
8 to 10 per day on live racing days.
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 have added 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. (Passed out of this Committee on a 13-0 vote and
was eventually gutted to become a non-horse racing issue -
Assembly refused to concur in Senate amendments)
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
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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 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 765 (Evans), Chapter 613, Statutes of 2007. Among
other things, reauthorized horse racing's Advance Deposit
Wagering law, which was due to "sunset" on January 1, 2008.
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
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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.
AB 471 (Hertzberg), Chapter 198, Statutes of 2001. Among
other things, allowed a California resident to wager on
races (including most out-of-state racetracks) using the
phone, Internet or other electronic media.
AB 2760 (Wesson) 1999-200 Session. Would have established
a backstretch employee labor relations process, as
specified, and authorized the CHRB to permit racing
associations to accept advanced deposit wagers, as defined.
(Vetoed by the Governor on the basis that allowing
wagering via the Internet and telephone would be a major
change in the status quo and a significant expansion of
gambling.)
SB 27 (Maddy), Chapter 335, Statutes of 1998. Among other
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: As of April 4, 2014:
California Authority of Racing Fairs
Sonoma County Fair
OPPOSE: None on file as of April 4, 2014.
FISCAL COMMITTEE: No.
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