AB 364: Horse racing: advance deposit wagering.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-08-22
The Horse Racing Law authorizes advance deposit wagering to be conducted, with the approval of the California Horse Racing Board. That law requires the board to develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for advance deposit wagering providers operating in California and authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an advance deposit wagering provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that advance deposit wagering provider.
The Horse Racing Law also requires that amounts distributed under these advance deposit wagering provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. That law requires that 50% of the amount of this reduction be distributed to the board to establish and to administer a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
This bill would provide that a person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
This bill would declare that it is to take effect immediately as an urgency statute.
The Horse Racing Law authorizes advance deposit wagering to be conducted, with the approval of the California Horse Racing Board. That law requires the board to develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for advance deposit wagering providers operating in California and authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an advance deposit wagering provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that advance deposit wagering provider.
The Horse Racing Law also requires that amounts distributed under these advance deposit wagering provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. That law requires that 50% of the amount of this reduction be distributed to the board to establish and to administer a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
This bill would provide that a person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
This bill would declare that it is to take effect immediately as an urgency statute.
The Horse Racing Law authorizes advance deposit wagering to be conducted, with the approval of the California Horse Racing Board. That law requires the board to develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for advance deposit wagering providers operating in California and authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an advance deposit wagering provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that advance deposit wagering provider.
The Horse Racing Law also requires that amounts distributed under these advance deposit wagering provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. That law requires that 50% of the amount of this reduction be distributed to the board to establish and to administer a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
This bill would provide that a person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
This bill would declare that it is to take effect immediately as an urgency statute.
The Horse Racing Law authorizes advance deposit wagering to be conducted, with the approval of the California Horse Racing Board. That law requires the board to develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for advance deposit wagering providers operating in California and authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an advance deposit wagering provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that advance deposit wagering provider.
The Horse Racing Law also requires that amounts distributed under these advance deposit wagering provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. That law requires that 50% of the amount of this reduction be distributed to the board to establish and to administer a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
This bill would provide that a person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
The Horse Racing Law authorizes a thoroughbred racing association or fair to distribute the audiovisual signal and accept wagers on the results of out-of-state thoroughbred races conducted in the United States during the calendar period the association or fair is conducting a race meeting, including days on which there is no live racing being conducted by the association or fair, without the consent of the organization that represents horsemen and horsewomen participating in the race meeting and without regard to the amount of purses. Under that law, the total number of thoroughbred races imported by associations or fairs on a statewide basis under these provisions are required to not exceed 50 per day on days when live thoroughbred or fair racing is being conducted in the state, with the exception of prescribed races, including races imported that are part of the race card of 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 World Cup, the Arkansas Derby, the Apple Blossom Handicap, or the Haskell Invitational.
This bill would also exempt from the 50 imported race-per-day limitation, races imported that are part of the race card of the Belmont Derby Invitational.
The Horse Racing Law authorizes a thoroughbred racing association or fair to distribute the audiovisual signal and accept wagers on the results of out-of-state thoroughbred races conducted in the United States during the calendar period the association or fair is conducting a race meeting, including days on which there is no live racing being conducted by the association or fair, without the consent of the organization that represents horsemen and horsewomen participating in the race meeting and without regard to the amount of purses. Under that law, the total number of thoroughbred races imported by associations or fairs on a statewide basis under these provisions are required to not exceed 50 per day on days when live thoroughbred or fair racing is being conducted in the state, with the exception of prescribed races, including races imported that are part of the race card of 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 World Cup, the Arkansas Derby, the Apple Blossom Handicap, or the Haskell Invitational.
This bill would also exempt from the 50 imported race-per-day limitation, races imported that are part of the race card of the Belmont Derby Invitational.
The California Constitution authorizes the Legislature, by statute, to authorize cities and counties to provide for bingo games for charitable purposes. Existing law permits a city, county, or city and county to allow bingo, as defined, to be conducted by specified organizations for charitable purposes pursuant to an ordinance that allows those games to be conducted only in accordance with specified requirements. Existing law prohibits the total value of prizes available to be awarded during the conduct of those games from exceeding $500 in cash or kind, or both, for each separate game that is held.
This bill would increase the amount described above from $500 to $1,000.
The California Constitution authorizes the Legislature, by statute, to authorize cities and counties to provide for bingo games for charitable purposes. Existing law permits a city, county, or city and county to allow bingo, as defined, to be conducted by specified organizations for charitable purposes pursuant to an ordinance that allows those games to be conducted only in accordance with specified requirements. Existing law prohibits the total value of prizes available to be awarded during the conduct of those games from exceeding $500 in cash or kind, or both, for each separate game that is held.
This bill would increase the amount described above from $500 to $1,000.
The board may authorize a racing association, racing fair, betting system, or multijurisdictional wagering hub to conduct advance deposit wagering in accordance with this section. Racing associations, racing fairs, and their respective horsemens organizations may form a partnership, joint venture, or any other affiliation in order to further the purposes of this section.
(a)As used in this section, the following definitions apply:
(1)Advance deposit wagering (ADW) means a form of parimutuel wagering in which a person residing within California or outside of this state establishes an account with an ADW provider, and subsequently issues wagering instructions concerning the funds in this account, thereby authorizing the ADW provider holding the account to place wagers on the account owners behalf.
(2)ADW provider means a licensee, betting system, or multijurisdictional wagering hub, located within California or outside this state, that is authorized to conduct advance deposit wagering pursuant to this section.
(3)Betting system means a business conducted exclusively in this state that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(4)Breed of racing means as follows:
(A)With respect to associations and fairs licensed by the board to conduct thoroughbred, fair, or mixed breed race meetings, breed of racing shall mean thoroughbred.
(B)With respect to associations licensed by the board to conduct quarter horse race meetings, breed of racing shall mean quarter horse.
(C)With respect to associations and fairs licensed by the board to conduct standardbred race meetings, breed of racing shall mean standardbred.
(5)Contractual compensation means the amount paid to an ADW provider from advance deposit wagers originating in this state. Contractual compensation includes, but is not limited to, hub fee payments, and may include host fee payments, if any, for out-of-state and out-of-country races. Contractual compensation is subject to the following requirements:
(A)Excluding contractual compensation for host fee payments, contractual compensation shall not exceed 6.5 percent of the amount wagered.
(B)The host fee payments included within contractual compensation shall not exceed 3.5 percent of the amount wagered. Notwithstanding this provision, the host fee payment with respect to wagers on the Kentucky Derby, Preakness Stakes, Belmont Stakes, and selected Breeders Cup Championship races may be negotiated by the ADW provider, the racing associations accepting wagers on those races pursuant to Section 19596.2, and the horsemens organization.
(C)In order to ensure fair and consistent market access fee distributions to associations, fairs, horsemen, and breeders, for each breed of racing, the percentage of wagers paid as contractual compensation to an ADW provider pursuant to the terms of a hub agreement with a racing association or fair when that racing association or fair is conducting live racing shall be the same as the percentage of wagers paid as contractual compensation to that ADW provider when that racing association or fair is not conducting live racing.
(6)Horsemens organization means, with respect to a particular racing meeting, the organization recognized by the board as responsible for negotiating purse agreements on behalf of horsemen participating in that racing meeting.
(7)Hub agreement means a written agreement providing for contractual compensation paid with respect to advance deposit wagers placed by California residents on a particular breed of racing conducted outside of California. In the event a hub agreement exceeds a term of two years, then an ADW provider, one or more racing associations or fairs that together conduct no fewer than five weeks of live racing for the breed covered by the hub agreement, and the horsemens organization responsible for negotiating purse agreements for the breed covered by the hub agreement shall be signatories to the hub agreement. A hub agreement is required for an ADW provider to receive contractual compensation for races conducted outside of California.
(8)Hub agreement arbitration means an arbitration proceeding pursuant to which the disputed provisions of the hub agreement pertaining to the hub or host fees from wagers on races conducted outside of California provided pursuant to paragraph (2) of subdivision (b) are determined in accordance with the provisions of this paragraph. If a hub agreement arbitration is requested, all of the following shall apply:
(A)The ADW provider shall be permitted to accept advance deposit wagers from California residents.
(B)The contractual compensation received by the ADW provider shall be the contractual compensation specified in the hub agreement that is the subject of the hub agreement arbitration.
(C)The difference between the contractual compensation specified in subparagraph (B) and the contractual compensation determined to be payable at the conclusion of the hub agreement arbitration shall be calculated and paid within 15 days following the arbitrators decision and order. The hub agreement arbitration shall be held as promptly as possible, but in no event more than 60 days following the demand for that arbitration. The arbitrator shall issue a decision no later than 15 days following the conclusion of the arbitration. A single arbitrator jointly selected by the ADW provider and the party requesting a hub agreement arbitration shall conduct the hub agreement arbitration. However, if the parties cannot agree on the arbitrator within seven days of issuance of the written demand for arbitration, then the arbitrator shall be selected pursuant to the Streamlined Arbitration Rules and Procedures of the Judicial Arbitration and Mediation Services, or pursuant to the applicable rules of its successor organization. In making the hub agreement arbitration determination, the arbitrator shall be required to choose between the contractual compensation of the hub agreement agreed to by the ADW provider or whatever different terms for the hub agreement were proposed by the party requesting the hub agreement arbitration. The arbitrator shall not be permitted to impose new, different, or compromised terms to the hub agreement. The arbitrators decision shall be final and binding on the parties. If an arbitration is requested, either party may bring an action in state court to compel a party to go into arbitration or to enforce the decision of the arbitrator. The cost of the hub agreement arbitration, including the cost of the arbitrator, shall be borne in equal shares by the parties to the hub agreement and the party or parties requesting a hub agreement arbitration. The hub agreement arbitration shall be administered by the Judicial Arbitration and Mediation Services pursuant to its Streamlined Arbitration Rules and Procedures or its successor organization.
(9)Incentive awards means those payments provided for in Sections 19617.2, 19617.7, 19617.8, 19617.9, and 19619. The amount determined to be payable for incentive awards under this section shall be payable to the applicable official registering agency and thereafter distributed as provided in this chapter.
(10)Licensee means a racing association or fair licensed to conduct a live racing meet in this state, or affiliation thereof, authorized under this section.
(11)Market access fee means the amount of advance deposit wagering handle remaining after the payment of winning wagers, and after the payment of contractual compensation, if any, to an ADW provider. Market access fees shall be distributed in accordance with subdivision (f).
(12)Multijurisdictional wagering hub means a business conducted in more than one jurisdiction that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(13)Racing fair means a fair authorized by the board to conduct live racing.
(14)Zone means the zone of the state, as defined in Section 19530.5, except as modified by the provisions of subdivision (f) of Section 19601. For these purposes, the central and southern zones shall together be considered one zone.
(b)Wagers shall be accepted according to the procedures set forth in this subdivision.
(1)No ADW provider shall accept wagers or wagering instructions on races conducted in California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)A written agreement allowing those wagers exists with the racing association or fair conducting the races on which the wagers are made.
(C)The agreement referenced in subparagraph (B) shall have been approved in writing by the horsemens organization responsible for negotiating purse agreements for the breed on which the wagers are made in accordance with the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of those wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider. For purposes of this subdivision, the substantive provisions of the Interstate Horseracing Act shall be taken into account without regard to whether, by its own terms, that act is applicable to advance deposit wagering on races conducted in California accepted from residents of California.
(2)No ADW provider shall accept wagers or wagering instructions on races conducted outside of California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)There is a hub agreement between the ADW provider and one or both of (i) one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed, and (ii) the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted.
(C)If the parties referenced in clauses (i) and (ii) of subparagraph (B) are both signatories to the hub agreement, then no party shall have the right to request a hub agreement arbitration.
(D)If only the party or parties referenced in clause (i) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide a copy of the hub agreement to the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted for each race conducted outside of California on which California residents may place advance deposit wagers. Before receipt of the hub agreement, the horsemens organization shall sign a nondisclosure agreement with the ADW provider agreeing to hold confidential all terms of the hub agreement. If the horsemens organization wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the copy of the hub agreement, and shall provide its alternate proposal to the hub and host fees specified in the hub agreement with that written notice. If the horsemens organization does not provide that written notice within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If the horsemens organization does provide that written notice within the 10-day period, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the horsemens organization.
(iii)Proceed with a hub agreement arbitration.
(E)If only the party referenced in clause (ii) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide written notice of the host and hub fees applicable pursuant to the hub agreement for each race conducted outside of California on which California residents may place advance deposit wagers, which notice shall be provided to all racing associations and fairs conducting live racing of the same breed covered by the hub agreement. If any racing association or fair wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the notice of host and hub fees. It shall also provide its alternate proposal to the hub and host fees specified in the hub agreement with the notice of its election. If more than one racing association or fair provides notice of their request for hub agreement arbitration, those racing associations or fairs, or both, shall have a period of five days to jointly agree upon which of their alternate proposals shall be the official proposal for purposes of the hub agreement arbitration. If one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed does not provide written notice of their election to arbitrate within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If a valid hub agreement arbitration request is made, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the racing associations or fairs.
(iii)Proceed with a hub agreement arbitration.
The results of a hub agreement arbitration elected pursuant to this subdivision shall be binding on all other associations and fairs conducting live racing on that breed.
(F)The acceptance thereof is in compliance with the provisions of the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of the wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider.
(c)An advance deposit wager may be made only by the ADW provider holding the account pursuant to wagering instructions issued by the owner of the funds communicated by telephone call or through other electronic media. The ADW provider shall ensure the identification of the accounts owner by using methods and technologies approved by the board. An ADW provider that accepts wagering instructions concerning races conducted in California, or accepts wagering instructions originating in California, shall provide a full accounting and verification of the source of the wagers thereby made, including the postal ZIP Code and breed of the source of the wagers, in the form of a daily download of parimutuel data to a database designated by the board. The daily download shall be delivered in a timely basis using file formats specified by the database designated by the board, and shall include any and all data necessary to calculate and distribute moneys according to the rules and regulations governing California parimutuel wagering. All reasonable costs associated with the creation, provision, and transfer of this data shall be borne by the ADW provider.
(d)(1)(A)The board shall develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for ADW providers operating in California, including advance deposit wagering activity that takes place within a minisatellite wagering facility. The board may recover costs associated with the licensing or regulation of advance deposit wagering activities in a minisatellite wagering facility either directly from the ADW provider or through an appropriate increase in the funding formula devised by the board pursuant to paragraph (1) of subdivision (a) of Section 19616.51.
(B)The board shall not approve an application for an original or renewal license as an ADW provider unless the entity, if requested in writing by a bona fide labor organization no later than 90 days before licensing, has entered into a contractual agreement with that labor organization that provides all of the following:
(i)The labor organization has historically represented employees who accept or process any form of wagering at the nearest horse racing meeting located in California.
(ii)The agreement establishes the method by which the ADW provider will agree to recognize and bargain in good faith with a labor organization that has demonstrated majority status by submitting authorization cards signed by those employees who accept or process any form of wagering for which a California ADW license is required.
(iii)The agreement requires the ADW provider to maintain its neutrality concerning the choice of those employees who accept or process any form of wagering for which a California ADW license is required whether or not to authorize the labor organization to represent them with regard to wages, hours, and other terms and conditions of employment.
(iv)The agreement applies to those classifications of employees who accept or process wagers for which a California ADW license is required whether the facility is located within or outside of California.
(C)(i)The agreement required by subparagraph (B) shall not be conditioned by either party upon the other party agreeing to matters outside the requirements of subparagraph (B).
(ii)The requirement in subparagraph (B) shall not apply to an ADW provider that has entered into a collective bargaining agreement with a bona fide labor organization that is the exclusive bargaining representative of employees who accept or process parimutuel wagers on races for which an ADW license is required whether the facility is located within or outside of California.
(D)Permanent state or county employees and nonprofit organizations that have historically performed certain services at county, state, or district fairs may continue to provide those services.
(E)Parimutuel clerks employed by racing associations or fairs or employees of ADW providers who accept or process any form of wagers who are laid off due to lack of work shall have preferential hiring rights for new positions with their employer in occupations whose duties include accepting or processing any form of wagers, or the operation, repair, service, or maintenance of equipment that accepts or processes any form of wagering at a racetrack, satellite wagering facility, or ADW provider licensed by the board. The preferential hiring rights established by this subdivision shall be conditioned upon the employee meeting the minimum qualification requirements of the new job.
(2)The board shall develop and adopt rules and regulations requiring ADW providers to establish security access policies and safeguards, including, but not limited to, the following:
(A)The ADW provider shall use board-approved methods to perform location and age verification confirmation with respect to persons establishing an advance deposit wagering account.
(B)The ADW provider shall use personal identification numbers (PINs) or other technologies to assure that only the accountholder has access to the advance deposit wagering account.
(C)The ADW provider shall provide for withdrawals from the wagering account only by means of a check made payable to the accountholder and sent to the address of the accountholder or by means of an electronic transfer to an account held by the verified accountholder or the accountholder may withdraw funds from the wagering account at a facility approved by the board by presenting verifiable account identification information.
(D)The ADW provider shall allow the board access to its premises to visit, investigate, audit, and place expert accountants and other persons it deems necessary for the purpose of ensuring that its rules and regulations concerning credit authorization, account access, and other security provisions are strictly complied with. To ensure that the amounts retained from the parimutuel handle are distributed under law, rules, or agreements, any ADW provider that accepts wagering instructions concerning races conducted in California or accepts wagering instructions originating in California shall provide an independent agreed-upon procedures audit for each California racing meeting, within 60 days of the conclusion of the race meeting. The auditing firm to be used and the content and scope of the audit, including host fee obligations, shall be set forth in the applicable agreement. The ADW provider shall provide the board, horsemens organizations, and the host racing association with an annual parimutuel audit of the financial transactions of the ADW provider with respect to wagers authorized pursuant to this section, prepared in accordance with generally accepted auditing standards and the requirements of the board. Any and all reasonable costs associated with those audits shall be borne by the ADW provider.
(3)The board shall prohibit advance deposit wagering advertising that it determines to be deceptive to the public. The board shall also require, by regulation, that every form of advertising contain a statement that minors are not allowed to open or have access to advance deposit wagering accounts.
(e)In order for a licensee, betting system, or multijurisdictional wagering hub to be approved by the board as an ADW provider, it shall meet both of the following requirements:
(1)All wagers thereby made shall be included in the appropriate parimutuel pool under a contractual agreement with the applicable host track.
(2)The amounts deducted from advance deposit wagers shall be in accordance with the provisions of this chapter.
(f)After the payment of contractual compensation, the amounts received as market access fees from advance deposit wagers, which shall not be considered for purposes of Section 19616.51, shall be distributed as follows:
(1)An amount equal to 0.0011 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Center for Equine Health to establish the Kenneth L. Maddy Fund for the benefit of the School of Veterinary Medicine at the University of California at Davis.
(2)An amount equal to 0.0003 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Public Employment Relations Board to cover costs associated with audits conducted pursuant to Section 19526 and for purposes of reimbursing the State Mediation and Conciliation Service for costs incurred pursuant to this section. However, if that amount would exceed the costs of the Public Employment Relations Board, the amount distributed to that board shall be reduced, and that reduction shall be forwarded to an organization designated by the racing association or fair described in subdivision (a) for the purpose of augmenting a compulsive gambling prevention program specifically addressing that problem.
(3)An amount equal to 0.00165 multiplied by the amount handled on advance deposit wagers that originate in California for each racing meeting shall be distributed as follows:
(A)One-half of the amount shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)One-half of the amount shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(4)With respect to wagers on each breed of racing that originate in California, an amount equal to 2 percent of the first two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1.5 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, and an amount equal to 0.50 percent of handle from all advance deposit wagers originating from within California in excess of seven hundred fifty million dollars ($750,000,000) annually, shall be distributed as satellite wagering commissions. Satellite wagering facilities that were not operational in 2001, other than one each in the Cities of Inglewood and San Mateo, and two additional facilities each operated by the Alameda County Fair and the Los Angeles County Fair and their partners and other than existing facilities that are relocated, are not eligible for satellite wagering commission distributions under this section. The satellite wagering facility commissions calculated in accordance with this subdivision shall be distributed to each satellite wagering facility and racing association or fair in the zone in which the wager originated in the same relative proportions that the satellite wagering facility or the racing association or fair generated satellite commissions during the previous calendar year. If there is a reduction in the satellite wagering commissions pursuant to this section, the benefits therefrom shall be distributed equitably as purses and commissions to all associations and racing fairs generating advance deposit wagers in proportion to the handle generated by those associations and racing fairs. If a satellite wagering facility is permanently closed other than for renovation or remodeling, or if a satellite wagering facility is unwilling or unable to accept all of the signals that are available to that facility, the commissions otherwise provided for in this subdivision that would be payable to that facility shall be proportionately reduced to take into account the time that satellite wagering is no longer conducted by that facility, or the payment of those commissions shall be eliminated entirely if the facility is permanently closed, and, in either case, the satellite wagering commissions not paid shall be proportionately redistributed to the other eligible satellite wagering facilities. For purposes of this section, the purse funds distributed pursuant to Section 19605.72 shall be considered to be satellite wagering facility commissions attributable to thoroughbred races at the locations described in that section.
(5)After the distribution of the amounts set forth in paragraphs (1) to (4), inclusive, the remaining market access fees from advance deposit wagers originating in California shall be as follows:
(A)With respect to wagers on each breed of racing, the amount remaining shall be distributed to the racing association or fair that is conducting live racing on that breed during the calendar period in the zone in which the wager originated. That amount shall be allocated to that racing association or fair as commissions, to horsemen participating in that racing meeting in the form of purses, and as incentive awards, in the same relative proportion as they were generated or earned during the prior calendar year at that racing association or fair on races conducted or imported by that racing association or fair after making all deductions required by applicable law. Notwithstanding any other law, the distributions with respect to each breed of racing set forth in this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by the respective associations, fairs, horsemens organizations, and breeders organizations receiving those distributions.
(B)If the provisions of Section 19601.2 apply, then the amount distributed to the applicable racing associations or fairs shall first be divided between those racing associations or fairs in direct proportion to the total amount wagered in the applicable zone on the live races conducted by the respective association or fair. Notwithstanding this requirement, when the provisions of subdivision (b) of Section 19607.5 apply to the 2nd District Agricultural Association in Stockton or the California Exposition and State Fair in Sacramento, then the total amount distributed to the applicable racing associations or fairs shall first be divided equally, with 50 percent distributed to applicable fairs and 50 percent distributed to applicable associations.
(C)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country thoroughbred races conducted after 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions to thoroughbred associations and racing fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A), and the remaining 50 percent, together with the total amount remaining from advance deposit wagering originating from California out-of-state and out-of-country harness and quarter horse races conducted after 6 p.m., Pacific standard time, shall be distributed as commissions on a pro rata basis to the applicable licensed quarter horse association and the applicable licensed harness association, based upon the amount handled in state, both on- and off-track, on each breeds own live races in the previous year by that association, or its predecessor association. One-half of the amount thereby received by each association shall be retained by that association as a commission, and the other one-half of the money received shall be distributed as purses to the horsemen participating in its current or next scheduled licensed racing meeting.
(D)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country nonthoroughbred races conducted before 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions as provided in subparagraph (C) for licensed quarter horse and harness associations, and the remaining 50 percent shall be distributed as commissions to the applicable thoroughbred associations or fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A).
(E)Notwithstanding any provision of this section to the contrary, the distribution of market access fees pursuant to this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by all parties whose distributions would be affected.
(g)A racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility may enter into an agreement with an ADW provider to accept and facilitate the placement of any wager from a patron at its facility that a California resident could make through that ADW provider. Deductions from wagers made pursuant to this agreement shall be distributed in accordance with the provisions of this chapter governing wagers placed at that facility, except that the board may authorize alternative distributions as agreed to by the ADW provider, the operator of the facility accepting the wager, the association or fair conducting that breed of racing in the zone where the wager is placed, and the respective horsemens organization.
(h)Any issue concerning the interpretation or application of this section shall be resolved by the board.
(i)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction shall not exceed two million dollars ($2,000,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)(A)Fifty percent of the money to the board to establish, and to administer jointly with the organization certified as the majority representative of California-licensed jockeys pursuant to Section 19612.9, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
(B)A person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
(2)The remaining 50 percent of the money shall be distributed as follows:
(A)Seventy percent shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)Thirty percent shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(j)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each harness racing meeting, provided that the amount of this reduction shall not exceed five hundred thousand dollars ($500,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)First to the welfare fund established for the benefit of horsemen and backstretch personnel, pursuant to subdivision (b) of Section 19641, and administered by the organization representing the horsemen participating in the race meeting, in the amount requested by the welfare fund. Moneys distributed pursuant to this paragraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(2)The amount remaining, if any, shall be utilized for the benefit of the horsemen as specified in a written agreement between the racing association that conducts the live harness race meeting and the organization representing the horsemen participating in the race meeting.
(k)Notwithstanding subdivision (j), amounts generated that were deducted from amounts handled on advance deposit wagering for harness racing meetings pursuant to subdivision (i), as that section read before the enactment of subdivision (j), that have been held in trust by the California Exposition and State Fair shall be distributed as follows:
(1)Fifty percent to the harness racing horsemen who participated in the racing meeting that concluded June 16, 2012, in the form of purses.
(2)Fifty percent to the California Exposition and State Fair in the form of commissions.
SEC. 2.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to enable the California Horse Racing Board to efficiently allocate and administer the defined contribution retirement plan for California-licensed horse jockeys, it is necessary that this act take effect immediately.
The board may authorize a racing association, racing fair, betting system, or multijurisdictional wagering hub to conduct advance deposit wagering in accordance with this section. Racing associations, racing fairs, and their respective horsemens organizations may form a partnership, joint venture, or any other affiliation in order to further the purposes of this section.
(a)As used in this section, the following definitions apply:
(1)Advance deposit wagering (ADW) means a form of parimutuel wagering in which a person residing within California or outside of this state establishes an account with an ADW provider, and subsequently issues wagering instructions concerning the funds in this account, thereby authorizing the ADW provider holding the account to place wagers on the account owners behalf.
(2)ADW provider means a licensee, betting system, or multijurisdictional wagering hub, located within California or outside this state, that is authorized to conduct advance deposit wagering pursuant to this section.
(3)Betting system means a business conducted exclusively in this state that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(4)Breed of racing means as follows:
(A)With respect to associations and fairs licensed by the board to conduct thoroughbred, fair, or mixed breed race meetings, breed of racing shall mean thoroughbred.
(B)With respect to associations licensed by the board to conduct quarter horse race meetings, breed of racing shall mean quarter horse.
(C)With respect to associations and fairs licensed by the board to conduct standardbred race meetings, breed of racing shall mean standardbred.
(5)Contractual compensation means the amount paid to an ADW provider from advance deposit wagers originating in this state. Contractual compensation includes, but is not limited to, hub fee payments, and may include host fee payments, if any, for out-of-state and out-of-country races. Contractual compensation is subject to the following requirements:
(A)Excluding contractual compensation for host fee payments, contractual compensation shall not exceed 6.5 percent of the amount wagered.
(B)The host fee payments included within contractual compensation shall not exceed 3.5 percent of the amount wagered. Notwithstanding this provision, the host fee payment with respect to wagers on the Kentucky Derby, Preakness Stakes, Belmont Stakes, and selected Breeders Cup Championship races may be negotiated by the ADW provider, the racing associations accepting wagers on those races pursuant to Section 19596.2, and the horsemens organization.
(C)In order to ensure fair and consistent market access fee distributions to associations, fairs, horsemen, and breeders, for each breed of racing, the percentage of wagers paid as contractual compensation to an ADW provider pursuant to the terms of a hub agreement with a racing association or fair when that racing association or fair is conducting live racing shall be the same as the percentage of wagers paid as contractual compensation to that ADW provider when that racing association or fair is not conducting live racing.
(6)Horsemens organization means, with respect to a particular racing meeting, the organization recognized by the board as responsible for negotiating purse agreements on behalf of horsemen participating in that racing meeting.
(7)Hub agreement means a written agreement providing for contractual compensation paid with respect to advance deposit wagers placed by California residents on a particular breed of racing conducted outside of California. In the event a hub agreement exceeds a term of two years, then an ADW provider, one or more racing associations or fairs that together conduct no fewer than five weeks of live racing for the breed covered by the hub agreement, and the horsemens organization responsible for negotiating purse agreements for the breed covered by the hub agreement shall be signatories to the hub agreement. A hub agreement is required for an ADW provider to receive contractual compensation for races conducted outside of California.
(8)Hub agreement arbitration means an arbitration proceeding pursuant to which the disputed provisions of the hub agreement pertaining to the hub or host fees from wagers on races conducted outside of California provided pursuant to paragraph (2) of subdivision (b) are determined in accordance with the provisions of this paragraph. If a hub agreement arbitration is requested, all of the following shall apply:
(A)The ADW provider shall be permitted to accept advance deposit wagers from California residents.
(B)The contractual compensation received by the ADW provider shall be the contractual compensation specified in the hub agreement that is the subject of the hub agreement arbitration.
(C)The difference between the contractual compensation specified in subparagraph (B) and the contractual compensation determined to be payable at the conclusion of the hub agreement arbitration shall be calculated and paid within 15 days following the arbitrators decision and order. The hub agreement arbitration shall be held as promptly as possible, but in no event more than 60 days following the demand for that arbitration. The arbitrator shall issue a decision no later than 15 days following the conclusion of the arbitration. A single arbitrator jointly selected by the ADW provider and the party requesting a hub agreement arbitration shall conduct the hub agreement arbitration. However, if the parties cannot agree on the arbitrator within seven days of issuance of the written demand for arbitration, then the arbitrator shall be selected pursuant to the Streamlined Arbitration Rules and Procedures of the Judicial Arbitration and Mediation Services, or pursuant to the applicable rules of its successor organization. In making the hub agreement arbitration determination, the arbitrator shall be required to choose between the contractual compensation of the hub agreement agreed to by the ADW provider or whatever different terms for the hub agreement were proposed by the party requesting the hub agreement arbitration. The arbitrator shall not be permitted to impose new, different, or compromised terms to the hub agreement. The arbitrators decision shall be final and binding on the parties. If an arbitration is requested, either party may bring an action in state court to compel a party to go into arbitration or to enforce the decision of the arbitrator. The cost of the hub agreement arbitration, including the cost of the arbitrator, shall be borne in equal shares by the parties to the hub agreement and the party or parties requesting a hub agreement arbitration. The hub agreement arbitration shall be administered by the Judicial Arbitration and Mediation Services pursuant to its Streamlined Arbitration Rules and Procedures or its successor organization.
(9)Incentive awards means those payments provided for in Sections 19617.2, 19617.7, 19617.8, 19617.9, and 19619. The amount determined to be payable for incentive awards under this section shall be payable to the applicable official registering agency and thereafter distributed as provided in this chapter.
(10)Licensee means a racing association or fair licensed to conduct a live racing meet in this state, or affiliation thereof, authorized under this section.
(11)Market access fee means the amount of advance deposit wagering handle remaining after the payment of winning wagers, and after the payment of contractual compensation, if any, to an ADW provider. Market access fees shall be distributed in accordance with subdivision (f).
(12)Multijurisdictional wagering hub means a business conducted in more than one jurisdiction that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(13)Racing fair means a fair authorized by the board to conduct live racing.
(14)Zone means the zone of the state, as defined in Section 19530.5, except as modified by the provisions of subdivision (f) of Section 19601. For these purposes, the central and southern zones shall together be considered one zone.
(b)Wagers shall be accepted according to the procedures set forth in this subdivision.
(1)No ADW provider shall accept wagers or wagering instructions on races conducted in California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)A written agreement allowing those wagers exists with the racing association or fair conducting the races on which the wagers are made.
(C)The agreement referenced in subparagraph (B) shall have been approved in writing by the horsemens organization responsible for negotiating purse agreements for the breed on which the wagers are made in accordance with the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of those wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider. For purposes of this subdivision, the substantive provisions of the Interstate Horseracing Act shall be taken into account without regard to whether, by its own terms, that act is applicable to advance deposit wagering on races conducted in California accepted from residents of California.
(2)No ADW provider shall accept wagers or wagering instructions on races conducted outside of California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)There is a hub agreement between the ADW provider and one or both of (i) one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed, and (ii) the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted.
(C)If the parties referenced in clauses (i) and (ii) of subparagraph (B) are both signatories to the hub agreement, then no party shall have the right to request a hub agreement arbitration.
(D)If only the party or parties referenced in clause (i) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide a copy of the hub agreement to the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted for each race conducted outside of California on which California residents may place advance deposit wagers. Before receipt of the hub agreement, the horsemens organization shall sign a nondisclosure agreement with the ADW provider agreeing to hold confidential all terms of the hub agreement. If the horsemens organization wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the copy of the hub agreement, and shall provide its alternate proposal to the hub and host fees specified in the hub agreement with that written notice. If the horsemens organization does not provide that written notice within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If the horsemens organization does provide that written notice within the 10-day period, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the horsemens organization.
(iii)Proceed with a hub agreement arbitration.
(E)If only the party referenced in clause (ii) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide written notice of the host and hub fees applicable pursuant to the hub agreement for each race conducted outside of California on which California residents may place advance deposit wagers, which notice shall be provided to all racing associations and fairs conducting live racing of the same breed covered by the hub agreement. If any racing association or fair wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the notice of host and hub fees. It shall also provide its alternate proposal to the hub and host fees specified in the hub agreement with the notice of its election. If more than one racing association or fair provides notice of their request for hub agreement arbitration, those racing associations or fairs, or both, shall have a period of five days to jointly agree upon which of their alternate proposals shall be the official proposal for purposes of the hub agreement arbitration. If one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed does not provide written notice of their election to arbitrate within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If a valid hub agreement arbitration request is made, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the racing associations or fairs.
(iii)Proceed with a hub agreement arbitration.
The results of a hub agreement arbitration elected pursuant to this subdivision shall be binding on all other associations and fairs conducting live racing on that breed.
(F)The acceptance thereof is in compliance with the provisions of the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of the wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider.
(c)An advance deposit wager may be made only by the ADW provider holding the account pursuant to wagering instructions issued by the owner of the funds communicated by telephone call or through other electronic media. The ADW provider shall ensure the identification of the accounts owner by using methods and technologies approved by the board. An ADW provider that accepts wagering instructions concerning races conducted in California, or accepts wagering instructions originating in California, shall provide a full accounting and verification of the source of the wagers thereby made, including the postal ZIP Code and breed of the source of the wagers, in the form of a daily download of parimutuel data to a database designated by the board. The daily download shall be delivered in a timely basis using file formats specified by the database designated by the board, and shall include any and all data necessary to calculate and distribute moneys according to the rules and regulations governing California parimutuel wagering. All reasonable costs associated with the creation, provision, and transfer of this data shall be borne by the ADW provider.
(d)(1)(A)The board shall develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for ADW providers operating in California, including advance deposit wagering activity that takes place within a minisatellite wagering facility. The board may recover costs associated with the licensing or regulation of advance deposit wagering activities in a minisatellite wagering facility either directly from the ADW provider or through an appropriate increase in the funding formula devised by the board pursuant to paragraph (1) of subdivision (a) of Section 19616.51.
(B)The board shall not approve an application for an original or renewal license as an ADW provider unless the entity, if requested in writing by a bona fide labor organization no later than 90 days before licensing, has entered into a contractual agreement with that labor organization that provides all of the following:
(i)The labor organization has historically represented employees who accept or process any form of wagering at the nearest horse racing meeting located in California.
(ii)The agreement establishes the method by which the ADW provider will agree to recognize and bargain in good faith with a labor organization that has demonstrated majority status by submitting authorization cards signed by those employees who accept or process any form of wagering for which a California ADW license is required.
(iii)The agreement requires the ADW provider to maintain its neutrality concerning the choice of those employees who accept or process any form of wagering for which a California ADW license is required whether or not to authorize the labor organization to represent them with regard to wages, hours, and other terms and conditions of employment.
(iv)The agreement applies to those classifications of employees who accept or process wagers for which a California ADW license is required whether the facility is located within or outside of California.
(C)(i)The agreement required by subparagraph (B) shall not be conditioned by either party upon the other party agreeing to matters outside the requirements of subparagraph (B).
(ii)The requirement in subparagraph (B) shall not apply to an ADW provider that has entered into a collective bargaining agreement with a bona fide labor organization that is the exclusive bargaining representative of employees who accept or process parimutuel wagers on races for which an ADW license is required whether the facility is located within or outside of California.
(D)Permanent state or county employees and nonprofit organizations that have historically performed certain services at county, state, or district fairs may continue to provide those services.
(E)Parimutuel clerks employed by racing associations or fairs or employees of ADW providers who accept or process any form of wagers who are laid off due to lack of work shall have preferential hiring rights for new positions with their employer in occupations whose duties include accepting or processing any form of wagers, or the operation, repair, service, or maintenance of equipment that accepts or processes any form of wagering at a racetrack, satellite wagering facility, or ADW provider licensed by the board. The preferential hiring rights established by this subdivision shall be conditioned upon the employee meeting the minimum qualification requirements of the new job.
(2)The board shall develop and adopt rules and regulations requiring ADW providers to establish security access policies and safeguards, including, but not limited to, the following:
(A)The ADW provider shall use board-approved methods to perform location and age verification confirmation with respect to persons establishing an advance deposit wagering account.
(B)The ADW provider shall use personal identification numbers (PINs) or other technologies to assure that only the accountholder has access to the advance deposit wagering account.
(C)The ADW provider shall provide for withdrawals from the wagering account only by means of a check made payable to the accountholder and sent to the address of the accountholder or by means of an electronic transfer to an account held by the verified accountholder or the accountholder may withdraw funds from the wagering account at a facility approved by the board by presenting verifiable account identification information.
(D)The ADW provider shall allow the board access to its premises to visit, investigate, audit, and place expert accountants and other persons it deems necessary for the purpose of ensuring that its rules and regulations concerning credit authorization, account access, and other security provisions are strictly complied with. To ensure that the amounts retained from the parimutuel handle are distributed under law, rules, or agreements, any ADW provider that accepts wagering instructions concerning races conducted in California or accepts wagering instructions originating in California shall provide an independent agreed-upon procedures audit for each California racing meeting, within 60 days of the conclusion of the race meeting. The auditing firm to be used and the content and scope of the audit, including host fee obligations, shall be set forth in the applicable agreement. The ADW provider shall provide the board, horsemens organizations, and the host racing association with an annual parimutuel audit of the financial transactions of the ADW provider with respect to wagers authorized pursuant to this section, prepared in accordance with generally accepted auditing standards and the requirements of the board. Any and all reasonable costs associated with those audits shall be borne by the ADW provider.
(3)The board shall prohibit advance deposit wagering advertising that it determines to be deceptive to the public. The board shall also require, by regulation, that every form of advertising contain a statement that minors are not allowed to open or have access to advance deposit wagering accounts.
(e)In order for a licensee, betting system, or multijurisdictional wagering hub to be approved by the board as an ADW provider, it shall meet both of the following requirements:
(1)All wagers thereby made shall be included in the appropriate parimutuel pool under a contractual agreement with the applicable host track.
(2)The amounts deducted from advance deposit wagers shall be in accordance with the provisions of this chapter.
(f)After the payment of contractual compensation, the amounts received as market access fees from advance deposit wagers, which shall not be considered for purposes of Section 19616.51, shall be distributed as follows:
(1)An amount equal to 0.0011 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Center for Equine Health to establish the Kenneth L. Maddy Fund for the benefit of the School of Veterinary Medicine at the University of California at Davis.
(2)An amount equal to 0.0003 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Public Employment Relations Board to cover costs associated with audits conducted pursuant to Section 19526 and for purposes of reimbursing the State Mediation and Conciliation Service for costs incurred pursuant to this section. However, if that amount would exceed the costs of the Public Employment Relations Board, the amount distributed to that board shall be reduced, and that reduction shall be forwarded to an organization designated by the racing association or fair described in subdivision (a) for the purpose of augmenting a compulsive gambling prevention program specifically addressing that problem.
(3)An amount equal to 0.00165 multiplied by the amount handled on advance deposit wagers that originate in California for each racing meeting shall be distributed as follows:
(A)One-half of the amount shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)One-half of the amount shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(4)With respect to wagers on each breed of racing that originate in California, an amount equal to 2 percent of the first two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1.5 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, and an amount equal to 0.50 percent of handle from all advance deposit wagers originating from within California in excess of seven hundred fifty million dollars ($750,000,000) annually, shall be distributed as satellite wagering commissions. Satellite wagering facilities that were not operational in 2001, other than one each in the Cities of Inglewood and San Mateo, and two additional facilities each operated by the Alameda County Fair and the Los Angeles County Fair and their partners and other than existing facilities that are relocated, are not eligible for satellite wagering commission distributions under this section. The satellite wagering facility commissions calculated in accordance with this subdivision shall be distributed to each satellite wagering facility and racing association or fair in the zone in which the wager originated in the same relative proportions that the satellite wagering facility or the racing association or fair generated satellite commissions during the previous calendar year. If there is a reduction in the satellite wagering commissions pursuant to this section, the benefits therefrom shall be distributed equitably as purses and commissions to all associations and racing fairs generating advance deposit wagers in proportion to the handle generated by those associations and racing fairs. If a satellite wagering facility is permanently closed other than for renovation or remodeling, or if a satellite wagering facility is unwilling or unable to accept all of the signals that are available to that facility, the commissions otherwise provided for in this subdivision that would be payable to that facility shall be proportionately reduced to take into account the time that satellite wagering is no longer conducted by that facility, or the payment of those commissions shall be eliminated entirely if the facility is permanently closed, and, in either case, the satellite wagering commissions not paid shall be proportionately redistributed to the other eligible satellite wagering facilities. For purposes of this section, the purse funds distributed pursuant to Section 19605.72 shall be considered to be satellite wagering facility commissions attributable to thoroughbred races at the locations described in that section.
(5)After the distribution of the amounts set forth in paragraphs (1) to (4), inclusive, the remaining market access fees from advance deposit wagers originating in California shall be as follows:
(A)With respect to wagers on each breed of racing, the amount remaining shall be distributed to the racing association or fair that is conducting live racing on that breed during the calendar period in the zone in which the wager originated. That amount shall be allocated to that racing association or fair as commissions, to horsemen participating in that racing meeting in the form of purses, and as incentive awards, in the same relative proportion as they were generated or earned during the prior calendar year at that racing association or fair on races conducted or imported by that racing association or fair after making all deductions required by applicable law. Notwithstanding any other law, the distributions with respect to each breed of racing set forth in this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by the respective associations, fairs, horsemens organizations, and breeders organizations receiving those distributions.
(B)If the provisions of Section 19601.2 apply, then the amount distributed to the applicable racing associations or fairs shall first be divided between those racing associations or fairs in direct proportion to the total amount wagered in the applicable zone on the live races conducted by the respective association or fair. Notwithstanding this requirement, when the provisions of subdivision (b) of Section 19607.5 apply to the 2nd District Agricultural Association in Stockton or the California Exposition and State Fair in Sacramento, then the total amount distributed to the applicable racing associations or fairs shall first be divided equally, with 50 percent distributed to applicable fairs and 50 percent distributed to applicable associations.
(C)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country thoroughbred races conducted after 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions to thoroughbred associations and racing fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A), and the remaining 50 percent, together with the total amount remaining from advance deposit wagering originating from California out-of-state and out-of-country harness and quarter horse races conducted after 6 p.m., Pacific standard time, shall be distributed as commissions on a pro rata basis to the applicable licensed quarter horse association and the applicable licensed harness association, based upon the amount handled in state, both on- and off-track, on each breeds own live races in the previous year by that association, or its predecessor association. One-half of the amount thereby received by each association shall be retained by that association as a commission, and the other one-half of the money received shall be distributed as purses to the horsemen participating in its current or next scheduled licensed racing meeting.
(D)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country nonthoroughbred races conducted before 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions as provided in subparagraph (C) for licensed quarter horse and harness associations, and the remaining 50 percent shall be distributed as commissions to the applicable thoroughbred associations or fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A).
(E)Notwithstanding any provision of this section to the contrary, the distribution of market access fees pursuant to this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by all parties whose distributions would be affected.
(g)A racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility may enter into an agreement with an ADW provider to accept and facilitate the placement of any wager from a patron at its facility that a California resident could make through that ADW provider. Deductions from wagers made pursuant to this agreement shall be distributed in accordance with the provisions of this chapter governing wagers placed at that facility, except that the board may authorize alternative distributions as agreed to by the ADW provider, the operator of the facility accepting the wager, the association or fair conducting that breed of racing in the zone where the wager is placed, and the respective horsemens organization.
(h)Any issue concerning the interpretation or application of this section shall be resolved by the board.
(i)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction shall not exceed two million dollars ($2,000,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)(A)Fifty percent of the money to the board to establish, and to administer jointly with the organization certified as the majority representative of California-licensed jockeys pursuant to Section 19612.9, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
(B)A person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
(2)The remaining 50 percent of the money shall be distributed as follows:
(A)Seventy percent shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)Thirty percent shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(j)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each harness racing meeting, provided that the amount of this reduction shall not exceed five hundred thousand dollars ($500,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)First to the welfare fund established for the benefit of horsemen and backstretch personnel, pursuant to subdivision (b) of Section 19641, and administered by the organization representing the horsemen participating in the race meeting, in the amount requested by the welfare fund. Moneys distributed pursuant to this paragraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(2)The amount remaining, if any, shall be utilized for the benefit of the horsemen as specified in a written agreement between the racing association that conducts the live harness race meeting and the organization representing the horsemen participating in the race meeting.
(k)Notwithstanding subdivision (j), amounts generated that were deducted from amounts handled on advance deposit wagering for harness racing meetings pursuant to subdivision (i), as that section read before the enactment of subdivision (j), that have been held in trust by the California Exposition and State Fair shall be distributed as follows:
(1)Fifty percent to the harness racing horsemen who participated in the racing meeting that concluded June 16, 2012, in the form of purses.
(2)Fifty percent to the California Exposition and State Fair in the form of commissions.
SEC. 2.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to enable the California Horse Racing Board to efficiently allocate and administer the defined contribution retirement plan for California-licensed horse jockeys, it is necessary that this act take effect immediately.
The board may authorize a racing association, racing fair, betting system, or multijurisdictional wagering hub to conduct advance deposit wagering in accordance with this section. Racing associations, racing fairs, and their respective horsemens organizations may form a partnership, joint venture, or any other affiliation in order to further the purposes of this section.
(a)As used in this section, the following definitions apply:
(1)Advance deposit wagering (ADW) means a form of parimutuel wagering in which a person residing within California or outside of this state establishes an account with an ADW provider, and subsequently issues wagering instructions concerning the funds in this account, thereby authorizing the ADW provider holding the account to place wagers on the account owners behalf.
(2)ADW provider means a licensee, betting system, or multijurisdictional wagering hub, located within California or outside this state, that is authorized to conduct advance deposit wagering pursuant to this section.
(3)Betting system means a business conducted exclusively in this state that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(4)Breed of racing means as follows:
(A)With respect to associations and fairs licensed by the board to conduct thoroughbred, fair, or mixed breed race meetings, breed of racing shall mean thoroughbred.
(B)With respect to associations licensed by the board to conduct quarter horse race meetings, breed of racing shall mean quarter horse.
(C)With respect to associations and fairs licensed by the board to conduct standardbred race meetings, breed of racing shall mean standardbred.
(5)Contractual compensation means the amount paid to an ADW provider from advance deposit wagers originating in this state. Contractual compensation includes, but is not limited to, hub fee payments, and may include host fee payments, if any, for out-of-state and out-of-country races. Contractual compensation is subject to the following requirements:
(A)Excluding contractual compensation for host fee payments, contractual compensation shall not exceed 6.5 percent of the amount wagered.
(B)The host fee payments included within contractual compensation shall not exceed 3.5 percent of the amount wagered. Notwithstanding this provision, the host fee payment with respect to wagers on the Kentucky Derby, Preakness Stakes, Belmont Stakes, and selected Breeders Cup Championship races may be negotiated by the ADW provider, the racing associations accepting wagers on those races pursuant to Section 19596.2, and the horsemens organization.
(C)In order to ensure fair and consistent market access fee distributions to associations, fairs, horsemen, and breeders, for each breed of racing, the percentage of wagers paid as contractual compensation to an ADW provider pursuant to the terms of a hub agreement with a racing association or fair when that racing association or fair is conducting live racing shall be the same as the percentage of wagers paid as contractual compensation to that ADW provider when that racing association or fair is not conducting live racing.
(6)Horsemens organization means, with respect to a particular racing meeting, the organization recognized by the board as responsible for negotiating purse agreements on behalf of horsemen participating in that racing meeting.
(7)Hub agreement means a written agreement providing for contractual compensation paid with respect to advance deposit wagers placed by California residents on a particular breed of racing conducted outside of California. In the event a hub agreement exceeds a term of two years, then an ADW provider, one or more racing associations or fairs that together conduct no fewer than five weeks of live racing for the breed covered by the hub agreement, and the horsemens organization responsible for negotiating purse agreements for the breed covered by the hub agreement shall be signatories to the hub agreement. A hub agreement is required for an ADW provider to receive contractual compensation for races conducted outside of California.
(8)Hub agreement arbitration means an arbitration proceeding pursuant to which the disputed provisions of the hub agreement pertaining to the hub or host fees from wagers on races conducted outside of California provided pursuant to paragraph (2) of subdivision (b) are determined in accordance with the provisions of this paragraph. If a hub agreement arbitration is requested, all of the following shall apply:
(A)The ADW provider shall be permitted to accept advance deposit wagers from California residents.
(B)The contractual compensation received by the ADW provider shall be the contractual compensation specified in the hub agreement that is the subject of the hub agreement arbitration.
(C)The difference between the contractual compensation specified in subparagraph (B) and the contractual compensation determined to be payable at the conclusion of the hub agreement arbitration shall be calculated and paid within 15 days following the arbitrators decision and order. The hub agreement arbitration shall be held as promptly as possible, but in no event more than 60 days following the demand for that arbitration. The arbitrator shall issue a decision no later than 15 days following the conclusion of the arbitration. A single arbitrator jointly selected by the ADW provider and the party requesting a hub agreement arbitration shall conduct the hub agreement arbitration. However, if the parties cannot agree on the arbitrator within seven days of issuance of the written demand for arbitration, then the arbitrator shall be selected pursuant to the Streamlined Arbitration Rules and Procedures of the Judicial Arbitration and Mediation Services, or pursuant to the applicable rules of its successor organization. In making the hub agreement arbitration determination, the arbitrator shall be required to choose between the contractual compensation of the hub agreement agreed to by the ADW provider or whatever different terms for the hub agreement were proposed by the party requesting the hub agreement arbitration. The arbitrator shall not be permitted to impose new, different, or compromised terms to the hub agreement. The arbitrators decision shall be final and binding on the parties. If an arbitration is requested, either party may bring an action in state court to compel a party to go into arbitration or to enforce the decision of the arbitrator. The cost of the hub agreement arbitration, including the cost of the arbitrator, shall be borne in equal shares by the parties to the hub agreement and the party or parties requesting a hub agreement arbitration. The hub agreement arbitration shall be administered by the Judicial Arbitration and Mediation Services pursuant to its Streamlined Arbitration Rules and Procedures or its successor organization.
(9)Incentive awards means those payments provided for in Sections 19617.2, 19617.7, 19617.8, 19617.9, and 19619. The amount determined to be payable for incentive awards under this section shall be payable to the applicable official registering agency and thereafter distributed as provided in this chapter.
(10)Licensee means a racing association or fair licensed to conduct a live racing meet in this state, or affiliation thereof, authorized under this section.
(11)Market access fee means the amount of advance deposit wagering handle remaining after the payment of winning wagers, and after the payment of contractual compensation, if any, to an ADW provider. Market access fees shall be distributed in accordance with subdivision (f).
(12)Multijurisdictional wagering hub means a business conducted in more than one jurisdiction that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(13)Racing fair means a fair authorized by the board to conduct live racing.
(14)Zone means the zone of the state, as defined in Section 19530.5, except as modified by the provisions of subdivision (f) of Section 19601. For these purposes, the central and southern zones shall together be considered one zone.
(b)Wagers shall be accepted according to the procedures set forth in this subdivision.
(1)No ADW provider shall accept wagers or wagering instructions on races conducted in California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)A written agreement allowing those wagers exists with the racing association or fair conducting the races on which the wagers are made.
(C)The agreement referenced in subparagraph (B) shall have been approved in writing by the horsemens organization responsible for negotiating purse agreements for the breed on which the wagers are made in accordance with the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of those wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider. For purposes of this subdivision, the substantive provisions of the Interstate Horseracing Act shall be taken into account without regard to whether, by its own terms, that act is applicable to advance deposit wagering on races conducted in California accepted from residents of California.
(2)No ADW provider shall accept wagers or wagering instructions on races conducted outside of California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)There is a hub agreement between the ADW provider and one or both of (i) one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed, and (ii) the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted.
(C)If the parties referenced in clauses (i) and (ii) of subparagraph (B) are both signatories to the hub agreement, then no party shall have the right to request a hub agreement arbitration.
(D)If only the party or parties referenced in clause (i) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide a copy of the hub agreement to the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted for each race conducted outside of California on which California residents may place advance deposit wagers. Before receipt of the hub agreement, the horsemens organization shall sign a nondisclosure agreement with the ADW provider agreeing to hold confidential all terms of the hub agreement. If the horsemens organization wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the copy of the hub agreement, and shall provide its alternate proposal to the hub and host fees specified in the hub agreement with that written notice. If the horsemens organization does not provide that written notice within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If the horsemens organization does provide that written notice within the 10-day period, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the horsemens organization.
(iii)Proceed with a hub agreement arbitration.
(E)If only the party referenced in clause (ii) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide written notice of the host and hub fees applicable pursuant to the hub agreement for each race conducted outside of California on which California residents may place advance deposit wagers, which notice shall be provided to all racing associations and fairs conducting live racing of the same breed covered by the hub agreement. If any racing association or fair wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the notice of host and hub fees. It shall also provide its alternate proposal to the hub and host fees specified in the hub agreement with the notice of its election. If more than one racing association or fair provides notice of their request for hub agreement arbitration, those racing associations or fairs, or both, shall have a period of five days to jointly agree upon which of their alternate proposals shall be the official proposal for purposes of the hub agreement arbitration. If one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed does not provide written notice of their election to arbitrate within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If a valid hub agreement arbitration request is made, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the racing associations or fairs.
(iii)Proceed with a hub agreement arbitration.
The results of a hub agreement arbitration elected pursuant to this subdivision shall be binding on all other associations and fairs conducting live racing on that breed.
(F)The acceptance thereof is in compliance with the provisions of the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of the wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider.
(c)An advance deposit wager may be made only by the ADW provider holding the account pursuant to wagering instructions issued by the owner of the funds communicated by telephone call or through other electronic media. The ADW provider shall ensure the identification of the accounts owner by using methods and technologies approved by the board. An ADW provider that accepts wagering instructions concerning races conducted in California, or accepts wagering instructions originating in California, shall provide a full accounting and verification of the source of the wagers thereby made, including the postal ZIP Code and breed of the source of the wagers, in the form of a daily download of parimutuel data to a database designated by the board. The daily download shall be delivered in a timely basis using file formats specified by the database designated by the board, and shall include any and all data necessary to calculate and distribute moneys according to the rules and regulations governing California parimutuel wagering. All reasonable costs associated with the creation, provision, and transfer of this data shall be borne by the ADW provider.
(d)(1)(A)The board shall develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for ADW providers operating in California, including advance deposit wagering activity that takes place within a minisatellite wagering facility. The board may recover costs associated with the licensing or regulation of advance deposit wagering activities in a minisatellite wagering facility either directly from the ADW provider or through an appropriate increase in the funding formula devised by the board pursuant to paragraph (1) of subdivision (a) of Section 19616.51.
(B)The board shall not approve an application for an original or renewal license as an ADW provider unless the entity, if requested in writing by a bona fide labor organization no later than 90 days before licensing, has entered into a contractual agreement with that labor organization that provides all of the following:
(i)The labor organization has historically represented employees who accept or process any form of wagering at the nearest horse racing meeting located in California.
(ii)The agreement establishes the method by which the ADW provider will agree to recognize and bargain in good faith with a labor organization that has demonstrated majority status by submitting authorization cards signed by those employees who accept or process any form of wagering for which a California ADW license is required.
(iii)The agreement requires the ADW provider to maintain its neutrality concerning the choice of those employees who accept or process any form of wagering for which a California ADW license is required whether or not to authorize the labor organization to represent them with regard to wages, hours, and other terms and conditions of employment.
(iv)The agreement applies to those classifications of employees who accept or process wagers for which a California ADW license is required whether the facility is located within or outside of California.
(C)(i)The agreement required by subparagraph (B) shall not be conditioned by either party upon the other party agreeing to matters outside the requirements of subparagraph (B).
(ii)The requirement in subparagraph (B) shall not apply to an ADW provider that has entered into a collective bargaining agreement with a bona fide labor organization that is the exclusive bargaining representative of employees who accept or process parimutuel wagers on races for which an ADW license is required whether the facility is located within or outside of California.
(D)Permanent state or county employees and nonprofit organizations that have historically performed certain services at county, state, or district fairs may continue to provide those services.
(E)Parimutuel clerks employed by racing associations or fairs or employees of ADW providers who accept or process any form of wagers who are laid off due to lack of work shall have preferential hiring rights for new positions with their employer in occupations whose duties include accepting or processing any form of wagers, or the operation, repair, service, or maintenance of equipment that accepts or processes any form of wagering at a racetrack, satellite wagering facility, or ADW provider licensed by the board. The preferential hiring rights established by this subdivision shall be conditioned upon the employee meeting the minimum qualification requirements of the new job.
(2)The board shall develop and adopt rules and regulations requiring ADW providers to establish security access policies and safeguards, including, but not limited to, the following:
(A)The ADW provider shall use board-approved methods to perform location and age verification confirmation with respect to persons establishing an advance deposit wagering account.
(B)The ADW provider shall use personal identification numbers (PINs) or other technologies to assure that only the accountholder has access to the advance deposit wagering account.
(C)The ADW provider shall provide for withdrawals from the wagering account only by means of a check made payable to the accountholder and sent to the address of the accountholder or by means of an electronic transfer to an account held by the verified accountholder or the accountholder may withdraw funds from the wagering account at a facility approved by the board by presenting verifiable account identification information.
(D)The ADW provider shall allow the board access to its premises to visit, investigate, audit, and place expert accountants and other persons it deems necessary for the purpose of ensuring that its rules and regulations concerning credit authorization, account access, and other security provisions are strictly complied with. To ensure that the amounts retained from the parimutuel handle are distributed under law, rules, or agreements, any ADW provider that accepts wagering instructions concerning races conducted in California or accepts wagering instructions originating in California shall provide an independent agreed-upon procedures audit for each California racing meeting, within 60 days of the conclusion of the race meeting. The auditing firm to be used and the content and scope of the audit, including host fee obligations, shall be set forth in the applicable agreement. The ADW provider shall provide the board, horsemens organizations, and the host racing association with an annual parimutuel audit of the financial transactions of the ADW provider with respect to wagers authorized pursuant to this section, prepared in accordance with generally accepted auditing standards and the requirements of the board. Any and all reasonable costs associated with those audits shall be borne by the ADW provider.
(3)The board shall prohibit advance deposit wagering advertising that it determines to be deceptive to the public. The board shall also require, by regulation, that every form of advertising contain a statement that minors are not allowed to open or have access to advance deposit wagering accounts.
(e)In order for a licensee, betting system, or multijurisdictional wagering hub to be approved by the board as an ADW provider, it shall meet both of the following requirements:
(1)All wagers thereby made shall be included in the appropriate parimutuel pool under a contractual agreement with the applicable host track.
(2)The amounts deducted from advance deposit wagers shall be in accordance with the provisions of this chapter.
(f)After the payment of contractual compensation, the amounts received as market access fees from advance deposit wagers, which shall not be considered for purposes of Section 19616.51, shall be distributed as follows:
(1)An amount equal to 0.0011 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Center for Equine Health to establish the Kenneth L. Maddy Fund for the benefit of the School of Veterinary Medicine at the University of California at Davis.
(2)An amount equal to 0.0003 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Public Employment Relations Board to cover costs associated with audits conducted pursuant to Section 19526 and for purposes of reimbursing the State Mediation and Conciliation Service for costs incurred pursuant to this section. However, if that amount would exceed the costs of the Public Employment Relations Board, the amount distributed to that board shall be reduced, and that reduction shall be forwarded to an organization designated by the racing association or fair described in subdivision (a) for the purpose of augmenting a compulsive gambling prevention program specifically addressing that problem.
(3)An amount equal to 0.00165 multiplied by the amount handled on advance deposit wagers that originate in California for each racing meeting shall be distributed as follows:
(A)One-half of the amount shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)One-half of the amount shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(4)With respect to wagers on each breed of racing that originate in California, an amount equal to 2 percent of the first two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1.5 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, and an amount equal to 0.50 percent of handle from all advance deposit wagers originating from within California in excess of seven hundred fifty million dollars ($750,000,000) annually, shall be distributed as satellite wagering commissions. Satellite wagering facilities that were not operational in 2001, other than one each in the Cities of Inglewood and San Mateo, and two additional facilities each operated by the Alameda County Fair and the Los Angeles County Fair and their partners and other than existing facilities that are relocated, are not eligible for satellite wagering commission distributions under this section. The satellite wagering facility commissions calculated in accordance with this subdivision shall be distributed to each satellite wagering facility and racing association or fair in the zone in which the wager originated in the same relative proportions that the satellite wagering facility or the racing association or fair generated satellite commissions during the previous calendar year. If there is a reduction in the satellite wagering commissions pursuant to this section, the benefits therefrom shall be distributed equitably as purses and commissions to all associations and racing fairs generating advance deposit wagers in proportion to the handle generated by those associations and racing fairs. If a satellite wagering facility is permanently closed other than for renovation or remodeling, or if a satellite wagering facility is unwilling or unable to accept all of the signals that are available to that facility, the commissions otherwise provided for in this subdivision that would be payable to that facility shall be proportionately reduced to take into account the time that satellite wagering is no longer conducted by that facility, or the payment of those commissions shall be eliminated entirely if the facility is permanently closed, and, in either case, the satellite wagering commissions not paid shall be proportionately redistributed to the other eligible satellite wagering facilities. For purposes of this section, the purse funds distributed pursuant to Section 19605.72 shall be considered to be satellite wagering facility commissions attributable to thoroughbred races at the locations described in that section.
(5)After the distribution of the amounts set forth in paragraphs (1) to (4), inclusive, the remaining market access fees from advance deposit wagers originating in California shall be as follows:
(A)With respect to wagers on each breed of racing, the amount remaining shall be distributed to the racing association or fair that is conducting live racing on that breed during the calendar period in the zone in which the wager originated. That amount shall be allocated to that racing association or fair as commissions, to horsemen participating in that racing meeting in the form of purses, and as incentive awards, in the same relative proportion as they were generated or earned during the prior calendar year at that racing association or fair on races conducted or imported by that racing association or fair after making all deductions required by applicable law. Notwithstanding any other law, the distributions with respect to each breed of racing set forth in this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by the respective associations, fairs, horsemens organizations, and breeders organizations receiving those distributions.
(B)If the provisions of Section 19601.2 apply, then the amount distributed to the applicable racing associations or fairs shall first be divided between those racing associations or fairs in direct proportion to the total amount wagered in the applicable zone on the live races conducted by the respective association or fair. Notwithstanding this requirement, when the provisions of subdivision (b) of Section 19607.5 apply to the 2nd District Agricultural Association in Stockton or the California Exposition and State Fair in Sacramento, then the total amount distributed to the applicable racing associations or fairs shall first be divided equally, with 50 percent distributed to applicable fairs and 50 percent distributed to applicable associations.
(C)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country thoroughbred races conducted after 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions to thoroughbred associations and racing fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A), and the remaining 50 percent, together with the total amount remaining from advance deposit wagering originating from California out-of-state and out-of-country harness and quarter horse races conducted after 6 p.m., Pacific standard time, shall be distributed as commissions on a pro rata basis to the applicable licensed quarter horse association and the applicable licensed harness association, based upon the amount handled in state, both on- and off-track, on each breeds own live races in the previous year by that association, or its predecessor association. One-half of the amount thereby received by each association shall be retained by that association as a commission, and the other one-half of the money received shall be distributed as purses to the horsemen participating in its current or next scheduled licensed racing meeting.
(D)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country nonthoroughbred races conducted before 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions as provided in subparagraph (C) for licensed quarter horse and harness associations, and the remaining 50 percent shall be distributed as commissions to the applicable thoroughbred associations or fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A).
(E)Notwithstanding any provision of this section to the contrary, the distribution of market access fees pursuant to this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by all parties whose distributions would be affected.
(g)A racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility may enter into an agreement with an ADW provider to accept and facilitate the placement of any wager from a patron at its facility that a California resident could make through that ADW provider. Deductions from wagers made pursuant to this agreement shall be distributed in accordance with the provisions of this chapter governing wagers placed at that facility, except that the board may authorize alternative distributions as agreed to by the ADW provider, the operator of the facility accepting the wager, the association or fair conducting that breed of racing in the zone where the wager is placed, and the respective horsemens organization.
(h)Any issue concerning the interpretation or application of this section shall be resolved by the board.
(i)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction shall not exceed two million dollars ($2,000,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)(A)Fifty percent of the money to the board to establish, and to administer jointly with the organization certified as the majority representative of California-licensed jockeys pursuant to Section 19612.9, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
(B)A person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
(2)The remaining 50 percent of the money shall be distributed as follows:
(A)Seventy percent shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)Thirty percent shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(j)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each harness racing meeting, provided that the amount of this reduction shall not exceed five hundred thousand dollars ($500,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)First to the welfare fund established for the benefit of horsemen and backstretch personnel, pursuant to subdivision (b) of Section 19641, and administered by the organization representing the horsemen participating in the race meeting, in the amount requested by the welfare fund. Moneys distributed pursuant to this paragraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(2)The amount remaining, if any, shall be utilized for the benefit of the horsemen as specified in a written agreement between the racing association that conducts the live harness race meeting and the organization representing the horsemen participating in the race meeting.
(k)Notwithstanding subdivision (j), amounts generated that were deducted from amounts handled on advance deposit wagering for harness racing meetings pursuant to subdivision (i), as that section read before the enactment of subdivision (j), that have been held in trust by the California Exposition and State Fair shall be distributed as follows:
(1)Fifty percent to the harness racing horsemen who participated in the racing meeting that concluded June 16, 2012, in the form of purses.
(2)Fifty percent to the California Exposition and State Fair in the form of commissions.
SEC. 2.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to enable the California Horse Racing Board to efficiently allocate and administer the defined contribution retirement plan for California-licensed horse jockeys, it is necessary that this act take effect immediately.
The board may authorize any a racing association, racing fair, betting system, or multijurisdictional wagering hub to conduct advance deposit wagering in accordance with this section. Racing associations, racing fairs, and their respective horsemens organizations may form a partnership, joint venture, or any other affiliation in order to further the purposes of this section.
(a)As used in this section, the following definitions apply:
(1)Advance deposit wagering (ADW) means a form of parimutuel wagering in which a person residing within California or outside of this state establishes an account with an ADW provider, and subsequently issues wagering instructions concerning the funds in this account, thereby authorizing the ADW provider holding the account to place wagers on the account owners behalf.
(2)ADW provider means a licensee, betting system, or multijurisdictional wagering hub, located within California or outside this state, that is authorized to conduct advance deposit wagering pursuant to this section.
(3)Betting system means a business conducted exclusively in this state that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(4)Breed of racing means as follows:
(A)With respect to associations and fairs licensed by the board to conduct thoroughbred, fair, or mixed breed race meetings, breed of racing shall mean thoroughbred.
(B)With respect to associations licensed by the board to conduct quarter horse race meetings, breed of racing shall mean quarter horse.
(C)With respect to associations and fairs licensed by the board to conduct standardbred race meetings, breed of racing shall mean standardbred.
(5)Contractual compensation means the amount paid to an ADW provider from advance deposit wagers originating in this state. Contractual compensation includes, but is not limited to, hub fee payments, and may include host fee payments, if any, for out-of-state and out-of-country races. Contractual compensation is subject to the following requirements:
(A)Excluding contractual compensation for host fee payments, contractual compensation shall not exceed 6.5 percent of the amount wagered.
(B)The host fee payments included within contractual compensation shall not exceed 3.5 percent of the amount wagered. Notwithstanding this provision, the host fee payment with respect to wagers on the Kentucky Derby, Preakness Stakes, Belmont Stakes, and selected Breeders Cup Championship races may be negotiated by the ADW provider, the racing associations accepting wagers on those races pursuant to Section 19596.2, and the horsemens organization.
(C)In order to ensure fair and consistent market access fee distributions to associations, fairs, horsemen, and breeders, for each breed of racing, the percentage of wagers paid as contractual compensation to an ADW provider pursuant to the terms of a hub agreement with a racing association or fair when that racing association or fair is conducting live racing shall be the same as the percentage of wagers paid as contractual compensation to that ADW provider when that racing association or fair is not conducting live racing.
(6)Horsemens organization means, with respect to a particular racing meeting, the organization recognized by the board as responsible for negotiating purse agreements on behalf of horsemen participating in that racing meeting.
(7)Hub agreement means a written agreement providing for contractual compensation paid with respect to advance deposit wagers placed by California residents on a particular breed of racing conducted outside of California. In the event a hub agreement exceeds a term of two years, then an ADW provider, one or more racing associations or fairs that together conduct no fewer than five weeks of live racing for the breed covered by the hub agreement, and the horsemens organization responsible for negotiating purse agreements for the breed covered by the hub agreement shall be signatories to the hub agreement. A hub agreement is required for an ADW provider to receive contractual compensation for races conducted outside of California.
(8)Hub agreement arbitration means an arbitration proceeding pursuant to which the disputed provisions of the hub agreement pertaining to the hub or host fees from wagers on races conducted outside of California provided pursuant to paragraph (2) of subdivision (b) are determined in accordance with the provisions of this paragraph. If a hub agreement arbitration is requested, all of the following shall apply:
(A)The ADW provider shall be permitted to accept advance deposit wagers from California residents.
(B)The contractual compensation received by the ADW provider shall be the contractual compensation specified in the hub agreement that is the subject of the hub agreement arbitration.
(C)The difference between the contractual compensation specified in subparagraph (B) and the contractual compensation determined to be payable at the conclusion of the hub agreement arbitration shall be calculated and paid within 15 days following the arbitrators decision and order. The hub agreement arbitration shall be held as promptly as possible, but in no event more than 60 days following the demand for that arbitration. The arbitrator shall issue a decision no later than 15 days following the conclusion of the arbitration. A single arbitrator jointly selected by the ADW provider and the party requesting a hub agreement arbitration shall conduct the hub agreement arbitration. However, if the parties cannot agree on the arbitrator within seven days of issuance of the written demand for arbitration, then the arbitrator shall be selected pursuant to the Streamlined Arbitration Rules and Procedures of the Judicial Arbitration and Mediation Services, or pursuant to the applicable rules of its successor organization. In making the hub agreement arbitration determination, the arbitrator shall be required to choose between the contractual compensation of the hub agreement agreed to by the ADW provider or whatever different terms for the hub agreement were proposed by the party requesting the hub agreement arbitration. The arbitrator shall not be permitted to impose new, different, or compromised terms to the hub agreement. The arbitrators decision shall be final and binding on the parties. If an arbitration is requested, either party may bring an action in state court to compel a party to go into arbitration or to enforce the decision of the arbitrator. The cost of the hub agreement arbitration, including the cost of the arbitrator, shall be borne in equal shares by the parties to the hub agreement and the party or parties requesting a hub agreement arbitration. The hub agreement arbitration shall be administered by the Judicial Arbitration and Mediation Services pursuant to its Streamlined Arbitration Rules and Procedures or its successor organization.
(9)Incentive awards means those payments provided for in Sections 19617.2, 19617.7, 19617.8, 19617.9, and 19619. The amount determined to be payable for incentive awards under this section shall be payable to the applicable official registering agency and thereafter distributed as provided in this chapter.
(10)Licensee means any a racing association or fair licensed to conduct a live racing meet in this state, or affiliation thereof, authorized under this section.
(11)Market access fee means the amount of advance deposit wagering handle remaining after the payment of winning wagers, and after the payment of contractual compensation, if any, to an ADW provider. Market access fees shall be distributed in accordance with subdivision (f).
(12)Multijurisdictional wagering hub means a business conducted in more than one jurisdiction that facilitates parimutuel wagering on races it simulcasts and other races it offers in its wagering menu.
(13)Racing fair means a fair authorized by the board to conduct live racing.
(14)Zone means the zone of the state, as defined in Section 19530.5, except as modified by the provisions of subdivision (f) of Section 19601. For these purposes, the central and southern zones shall together be considered one zone.
(b)Wagers shall be accepted according to the procedures set forth in this subdivision.
(1)No ADW provider shall accept wagers or wagering instructions on races conducted in California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)A written agreement allowing those wagers exists with the racing association or fair conducting the races on which the wagers are made.
(C)The agreement referenced in subparagraph (B) shall have been approved in writing by the horsemens organization responsible for negotiating purse agreements for the breed on which the wagers are made in accordance with the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of those wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider. For purposes of this subdivision, the substantive provisions of the Interstate Horseracing Act shall be taken into account without regard to whether, by its own terms, that act is applicable to advance deposit wagering on races conducted in California accepted from residents of California.
(2)No ADW provider shall accept wagers or wagering instructions on races conducted outside of California from a resident of California unless all of the following conditions are met:
(A)The ADW provider is licensed by the board.
(B)There is a hub agreement between the ADW provider and one or both of (i) one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed, and (ii) the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted.
(C)If the parties referenced in clauses (i) and (ii) of subparagraph (B) are both signatories to the hub agreement, then no party shall have the right to request a hub agreement arbitration.
(D)If only the party or parties referenced in clause (i) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide a copy of the hub agreement to the horsemens organization responsible for negotiating purse agreements for the breed on which wagering is conducted for each race conducted outside of California on which California residents may place advance deposit wagers. Before receipt of the hub agreement, the horsemens organization shall sign a nondisclosure agreement with the ADW provider agreeing to hold confidential all terms of the hub agreement. If the horsemens organization wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the copy of the hub agreement, and shall provide its alternate proposal to the hub and host fees specified in the hub agreement with that written notice. If the horsemens organization does not provide that written notice within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If the horsemens organization does provide that written notice within the 10-day period, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the horsemens organization.
(iii)Proceed with a hub agreement arbitration.
(E)If only the party referenced in clause (ii) of subparagraph (B) is a signatory to the hub agreement, then the signatories to the hub agreement shall, within five days of execution of the hub agreement, provide written notice of the host and hub fees applicable pursuant to the hub agreement for each race conducted outside of California on which California residents may place advance deposit wagers, which notice shall be provided to all racing associations and fairs conducting live racing of the same breed covered by the hub agreement. If any racing association or fair wants to request a hub agreement arbitration, it shall send written notice of its election to the signatories to the hub agreement within 10 days after receipt of the notice of host and hub fees. It shall also provide its alternate proposal to the hub and host fees specified in the hub agreement with the notice of its election. If more than one racing association or fair provides notice of their request for hub agreement arbitration, those racing associations or fairs, or both, shall have a period of five days to jointly agree upon which of their alternate proposals shall be the official proposal for purposes of the hub agreement arbitration. If one or more racing associations or fairs that together conduct no fewer than five weeks of live racing on the breed on which wagering is conducted during the calendar year during which the wager is placed does not provide written notice of their election to arbitrate within the 10-day period, then no party shall have the right to request a hub agreement arbitration. If a valid hub agreement arbitration request is made, then the ADW provider shall have 10 days to elect in writing to do one of the following:
(i)Abandon the hub agreement.
(ii)Accept the alternate proposal submitted by the racing associations or fairs.
(iii)Proceed with a hub agreement arbitration.
The results of any a hub agreement arbitration elected pursuant to this subdivision shall be binding on all other associations and fairs conducting live racing on that breed.
(F)The acceptance thereof is in compliance with the provisions of the Interstate Horseracing Act (15 U.S.C. Sec. 3001 et seq.), regardless of the location of the ADW provider, whether in California or otherwise, including, without limitation, any and all requirements contained therein with respect to written consents and required written agreements of horsemens groups to the terms and conditions of the acceptance of the wagers and any arrangements as to the exclusivity between the host racing association or fair and the ADW provider.
(c)An advance deposit wager may be made only by the ADW provider holding the account pursuant to wagering instructions issued by the owner of the funds communicated by telephone call or through other electronic media. The ADW provider shall ensure the identification of the accounts owner by using methods and technologies approved by the board. Any An ADW provider that accepts wagering instructions concerning races conducted in California, or accepts wagering instructions originating in California, shall provide a full accounting and verification of the source of the wagers thereby made, including the postal ZIP Code and breed of the source of the wagers, in the form of a daily download of parimutuel data to a database designated by the board. The daily download shall be delivered in a timely basis using file formats specified by the database designated by the board, and shall include any and all data necessary to calculate and distribute moneys according to the rules and regulations governing California parimutuel wagering. Any and all All reasonable costs associated with the creation, provision, and transfer of this data shall be borne by the ADW provider.
(d)(1)(A)The board shall develop and adopt rules to license and regulate all phases of operation of advance deposit wagering for ADW providers operating in California, including advance deposit wagering activity that takes place within a minisatellite wagering facility. The board may recover any costs associated with the licensing or regulation of advance deposit wagering activities in a minisatellite wagering facility either directly from the ADW provider or through an appropriate increase in the funding formula devised by the board pursuant to paragraph (1) of subdivision (a) of Section 19616.51.
(B)The board shall not approve an application for an original or renewal license as an ADW provider unless the entity, if requested in writing by a bona fide labor organization no later than 90 days before licensing, has entered into a contractual agreement with that labor organization that provides all of the following:
(i)The labor organization has historically represented employees who accept or process any form of wagering at the nearest horse racing meeting located in California.
(ii)The agreement establishes the method by which the ADW provider will agree to recognize and bargain in good faith with a labor organization that has demonstrated majority status by submitting authorization cards signed by those employees who accept or process any form of wagering for which a California ADW license is required.
(iii)The agreement requires the ADW provider to maintain its neutrality concerning the choice of those employees who accept or process any form of wagering for which a California ADW license is required whether or not to authorize the labor organization to represent them with regard to wages, hours, and other terms and conditions of employment.
(iv)The agreement applies to those classifications of employees who accept or process wagers for which a California ADW license is required whether the facility is located within or outside of California.
(C)(i)The agreement required by subparagraph (B) shall not be conditioned by either party upon the other party agreeing to matters outside the requirements of subparagraph (B).
(ii)The requirement in subparagraph (B) shall not apply to an ADW provider that has entered into a collective bargaining agreement with a bona fide labor organization that is the exclusive bargaining representative of employees who accept or process parimutuel wagers on races for which an ADW license is required whether the facility is located within or outside of California.
(D)Permanent state or county employees and nonprofit organizations that have historically performed certain services at county, state, or district fairs may continue to provide those services.
(E)Parimutuel clerks employed by racing associations or fairs or employees of ADW providers who accept or process any form of wagers who are laid off due to lack of work shall have preferential hiring rights for new positions with their employer in occupations whose duties include accepting or processing any form of wagers, or the operation, repair, service, or maintenance of equipment that accepts or processes any form of wagering at a racetrack, satellite wagering facility, or ADW provider licensed by the board. The preferential hiring rights established by this subdivision shall be conditioned upon the employee meeting the minimum qualification requirements of the new job.
(2)The board shall develop and adopt rules and regulations requiring ADW providers to establish security access policies and safeguards, including, but not limited to, the following:
(A)The ADW provider shall use board-approved methods to perform location and age verification confirmation with respect to persons establishing an advance deposit wagering account.
(B)The ADW provider shall use personal identification numbers (PINs) or other technologies to assure that only the accountholder has access to the advance deposit wagering account.
(C)The ADW provider shall provide for withdrawals from the wagering account only by means of a check made payable to the accountholder and sent to the address of the accountholder or by means of an electronic transfer to an account held by the verified accountholder or the accountholder may withdraw funds from the wagering account at a facility approved by the board by presenting verifiable account identification information.
(D)The ADW provider shall allow the board access to its premises to visit, investigate, audit, and place expert accountants and other persons it deems necessary for the purpose of ensuring that its rules and regulations concerning credit authorization, account access, and other security provisions are strictly complied with. To ensure that the amounts retained from the parimutuel handle are distributed under law, rules, or agreements, any ADW provider that accepts wagering instructions concerning races conducted in California or accepts wagering instructions originating in California shall provide an independent agreed-upon procedures audit for each California racing meeting, within 60 days of the conclusion of the race meeting. The auditing firm to be used and the content and scope of the audit, including host fee obligations, shall be set forth in the applicable agreement. The ADW provider shall provide the board, horsemens organizations, and the host racing association with an annual parimutuel audit of the financial transactions of the ADW provider with respect to wagers authorized pursuant to this section, prepared in accordance with generally accepted auditing standards and the requirements of the board. Any and all reasonable costs associated with those audits shall be borne by the ADW provider.
(3)The board shall prohibit advance deposit wagering advertising that it determines to be deceptive to the public. The board shall also require, by regulation, that every form of advertising contain a statement that minors are not allowed to open or have access to advance deposit wagering accounts.
(e)In order for a licensee, betting system, or multijurisdictional wagering hub to be approved by the board as an ADW provider, it shall meet both of the following requirements:
(1)All wagers thereby made shall be included in the appropriate parimutuel pool under a contractual agreement with the applicable host track.
(2)The amounts deducted from advance deposit wagers shall be in accordance with the provisions of this chapter.
(f)After the payment of contractual compensation, the amounts received as market access fees from advance deposit wagers, which shall not be considered for purposes of Section 19616.51, shall be distributed as follows:
(1)An amount equal to 0.0011 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Center for Equine Health to establish the Kenneth L. Maddy Fund for the benefit of the School of Veterinary Medicine at the University of California at Davis.
(2)An amount equal to 0.0003 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting shall be distributed to the Public Employment Relations Board to cover costs associated with audits conducted pursuant to Section 19526 and for purposes of reimbursing the State Mediation and Conciliation Service for costs incurred pursuant to this section. However, if that amount would exceed the costs of the Public Employment Relations Board, the amount distributed to that board shall be reduced, and that reduction shall be forwarded to an organization designated by the racing association or fair described in subdivision (a) for the purpose of augmenting a compulsive gambling prevention program specifically addressing that problem.
(3)An amount equal to 0.00165 multiplied by the amount handled on advance deposit wagers that originate in California for each racing meeting shall be distributed as follows:
(A)One-half of the amount shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)One-half of the amount shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(4)With respect to wagers on each breed of racing that originate in California, an amount equal to 2 percent of the first two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1.5 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, an amount equal to 1 percent of the next two hundred fifty million dollars ($250,000,000) of handle from all advance deposit wagers originating from within California annually, and an amount equal to 0.50 percent of handle from all advance deposit wagers originating from within California in excess of seven hundred fifty million dollars ($750,000,000) annually, shall be distributed as satellite wagering commissions. Satellite wagering facilities that were not operational in 2001, other than one each in the Cities of Inglewood and San Mateo, and two additional facilities each operated by the Alameda County Fair and the Los Angeles County Fair and their partners and other than existing facilities that are relocated, are not eligible for satellite wagering commission distributions under this section. The satellite wagering facility commissions calculated in accordance with this subdivision shall be distributed to each satellite wagering facility and racing association or fair in the zone in which the wager originated in the same relative proportions that the satellite wagering facility or the racing association or fair generated satellite commissions during the previous calendar year. If there is a reduction in the satellite wagering commissions pursuant to this section, the benefits therefrom shall be distributed equitably as purses and commissions to all associations and racing fairs generating advance deposit wagers in proportion to the handle generated by those associations and racing fairs. If a satellite wagering facility is permanently closed other than for renovation or remodeling, or if a satellite wagering facility is unwilling or unable to accept all of the signals that are available to that facility, the commissions otherwise provided for in this subdivision that would be payable to that facility shall be proportionately reduced to take into account the time that satellite wagering is no longer conducted by that facility, or the payment of those commissions shall be eliminated entirely if the facility is permanently closed, and, in either case, the satellite wagering commissions not paid shall be proportionately redistributed to the other eligible satellite wagering facilities. For purposes of this section, the purse funds distributed pursuant to Section 19605.72 shall be considered to be satellite wagering facility commissions attributable to thoroughbred races at the locations described in that section.
(5)After the distribution of the amounts set forth in paragraphs (1) to (4), inclusive, the remaining market access fees from advance deposit wagers originating in California shall be as follows:
(A)With respect to wagers on each breed of racing, the amount remaining shall be distributed to the racing association or fair that is conducting live racing on that breed during the calendar period in the zone in which the wager originated. That amount shall be allocated to that racing association or fair as commissions, to horsemen participating in that racing meeting in the form of purses, and as incentive awards, in the same relative proportion as they were generated or earned during the prior calendar year at that racing association or fair on races conducted or imported by that racing association or fair after making all deductions required by applicable law. Notwithstanding any other law, the distributions with respect to each breed of racing set forth in this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by the respective associations, fairs, horsemens organizations, and breeders organizations receiving those distributions.
(B)If the provisions of Section 19601.2 apply, then the amount distributed to the applicable racing associations or fairs shall first be divided between those racing associations or fairs in direct proportion to the total amount wagered in the applicable zone on the live races conducted by the respective association or fair. Notwithstanding this requirement, when the provisions of subdivision (b) of Section 19607.5 apply to the 2nd District Agricultural Association in Stockton or the California Exposition and State Fair in Sacramento, then the total amount distributed to the applicable racing associations or fairs shall first be divided equally, with 50 percent distributed to applicable fairs and 50 percent distributed to applicable associations.
(C)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country thoroughbred races conducted after 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions to thoroughbred associations and racing fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A), and the remaining 50 percent, together with the total amount remaining from advance deposit wagering originating from California out-of-state and out-of-country harness and quarter horse races conducted after 6 p.m., Pacific standard time, shall be distributed as commissions on a pro rata basis to the applicable licensed quarter horse association and the applicable licensed harness association, based upon the amount handled in state, both on- and off-track, on each breeds own live races in the previous year by that association, or its predecessor association. One-half of the amount thereby received by each association shall be retained by that association as a commission, and the other half one-half of the money received shall be distributed as purses to the horsemen participating in its current or next scheduled licensed racing meeting.
(D)Notwithstanding any provisions of this section to the contrary, with respect to wagers on out-of-state and out-of-country nonthoroughbred races conducted before 6 p.m., Pacific standard time, 50 percent of the amount remaining shall be distributed as commissions as provided in subparagraph (C) for licensed quarter horse and harness associations, and the remaining 50 percent shall be distributed as commissions to the applicable thoroughbred associations or fairs, as thoroughbred and fair purses, and as incentive awards in accordance with subparagraph (A).
(E)Notwithstanding any provision of this section to the contrary, the distribution of market access fees pursuant to this subparagraph may be altered upon the approval of the board, in accordance with an agreement signed by all parties whose distributions would be affected.
(g)A racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility may enter into an agreement with an ADW provider to accept and facilitate the placement of any wager from a patron at its facility that a California resident could make through that ADW provider. Deductions from wagers made pursuant to the this agreement shall be distributed in accordance with the provisions of this chapter governing wagers placed at that facility, except that the board may authorize alternative distributions as agreed to by the ADW provider, the operator of the facility accepting the wager, the association or fair conducting that breed of racing in the zone where the wager is placed, and the respective horsemens organization.
(h)Any issues issue concerning the interpretation or application of this section shall be resolved by the board.
(i)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction shall not exceed two million dollars ($2,000,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)(A)Fifty percent of the money to the board to establish establish, and to administer jointly with the organization certified as the majority representative of California-licensed jockeys pursuant to Section 19612.9, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
(B)A person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
(2)The remaining 50 percent of the money shall be distributed as follows:
(A)Seventy percent shall be distributed to supplement the trainer-administered pension plans for backstretch personnel established pursuant to Section 19613. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19613 or any other provision of law.
(B)Thirty percent shall be distributed to the welfare fund established for the benefit of horsemen and backstretch personnel pursuant to subdivision (b) of Section 19641. Moneys distributed pursuant to this subparagraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(j)Amounts distributed under this section shall be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each harness racing meeting, provided that the amount of this reduction shall not exceed five hundred thousand dollars ($500,000). The method used to calculate the reduction in proportionate share shall be approved by the board. The amount deducted shall be distributed as follows:
(1)First to the welfare fund established for the benefit of horsemen and backstretch personnel, pursuant to subdivision (b) of Section 19641, and administered by the organization representing the horsemen participating in the race meeting, in the amount requested by the welfare fund. Moneys distributed pursuant to this paragraph shall supplement, and not supplant, moneys distributed to that fund pursuant to Section 19641 or any other provision of law.
(2)The amount remaining, if any, shall be utilized for the benefit of the horsemen as specified in a written agreement between the racing association that conducts the live harness race meeting and the organization representing the horsemen participating in the race meeting.
(k)Notwithstanding subdivision (j), amounts generated that were deducted from amounts handled on advance deposit wagering for harness racing meetings pursuant to subdivision (i), as that section read before the enactment of subdivision (j), that have been held in trust by the California Exposition and State Fair shall be distributed as follows:
(1)Fifty percent to the harness racing horsemen who participated in the racing meeting that concluded June 16, 2012, in the form of purses.
(2)Fifty percent to the California Exposition and State Fair in the form of commissions.
SECTION 1.Section 19596.2 of the Business and Professions Code is amended to read:19596.2.(a)Notwithstanding any other law and except as provided in Section 19596.4, a thoroughbred racing association or fair may distribute the audiovisual signal and accept wagers on the results of out-of-state thoroughbred races conducted in the United States during the calendar period the association or fair is conducting a race meeting, including days on which there is no live racing being conducted by the association or fair, without the consent of the organization that represents horsemen and horsewomen participating in the race meeting and without regard to the amount of purses. Further, the total number of thoroughbred races imported by associations or fairs on a statewide basis under this section shall not exceed 50 per day on days when live thoroughbred or fair racing is being conducted in the state. The limitation of 50 imported races per day does not apply to any of the following:
(1)Races imported for wagering purposes pursuant to subdivision (c).
(2)Races imported that are part of the race card of 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 World Cup, the Arkansas Derby, the Apple Blossom Handicap, the Belmont Derby Invitational, or the Haskell Invitational.
(3)Races imported into the northern zone when there is no live thoroughbred or fair racing being conducted in the northern zone.
(4)Races imported into the combined central and southern zones when there is no live thoroughbred or fair racing being conducted in the combined central and southern zones.
(b)Any thoroughbred association or fair accepting wagers pursuant to subdivision (a) shall conduct the wagering in accordance with the applicable provisions of Sections 19601, 19616, 19616.1, and 19616.2.
(c)No thoroughbred association or fair may accept wagers pursuant to this section on out-of-state races commencing after 7 p.m., Pacific standard time, without the consent of the harness or quarter horse racing association that is then conducting a live racing meeting in Orange County or Sacramento County.
(a)Notwithstanding any other law and except as provided in Section 19596.4, a thoroughbred racing association or fair may distribute the audiovisual signal and accept wagers on the results of out-of-state thoroughbred races conducted in the United States during the calendar period the association or fair is conducting a race meeting, including days on which there is no live racing being conducted by the association or fair, without the consent of the organization that represents horsemen and horsewomen participating in the race meeting and without regard to the amount of purses. Further, the total number of thoroughbred races imported by associations or fairs on a statewide basis under this section shall not exceed 50 per day on days when live thoroughbred or fair racing is being conducted in the state. The limitation of 50 imported races per day does not apply to any of the following:
(1)Races imported for wagering purposes pursuant to subdivision (c).
(2)Races imported that are part of the race card of 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 World Cup, the Arkansas Derby, the Apple Blossom Handicap, the Belmont Derby Invitational, or the Haskell Invitational.
(3)Races imported into the northern zone when there is no live thoroughbred or fair racing being conducted in the northern zone.
(4)Races imported into the combined central and southern zones when there is no live thoroughbred or fair racing being conducted in the combined central and southern zones.
(b)Any thoroughbred association or fair accepting wagers pursuant to subdivision (a) shall conduct the wagering in accordance with the applicable provisions of Sections 19601, 19616, 19616.1, and 19616.2.
(c)No thoroughbred association or fair may accept wagers pursuant to this section on out-of-state races commencing after 7 p.m., Pacific standard time, without the consent of the harness or quarter horse racing association that is then conducting a live racing meeting in Orange County or Sacramento Counties. County.
SECTION 1.Section 326.5 of the Penal Code is amended to read:326.5.(a)Neither the prohibition on gambling in this chapter nor in Chapter 10 (commencing with Section 330) applies to any bingo game that meets all of the following conditions:
(1)It is conducted in a city, county, or city and county pursuant to an ordinance enacted under Section 19 of Article IV of the State Constitution, if the ordinance allows games to be conducted only in accordance with this section and only by organizations exempted from the payment of the bank and corporation tax by Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701w, and 23701l of the Revenue and Taxation Code.
(2)It is conducted by a mobilehome park association, senior citizens organization, or charitable organization affiliated with a school district.
(3)The receipts of the bingo game are used only for charitable purposes.
(b)It is a misdemeanor for a person to receive or pay a profit, wage, or salary from any bingo game authorized by Section 19 of Article IV of the California Constitution. Security personnel employed by the organization conducting the bingo game may be paid from the revenues of bingo games, as provided in subdivisions (j) and (k).
(c)A violation of subdivision (b) shall be punishable by a fine not to exceed ten thousand dollars ($10,000), which fine is deposited in the general fund of the city, county, or city and county that enacted the ordinance authorizing the bingo game. A violation of any provision of this section, other than subdivision (b), is a misdemeanor.
(d)The city, county, or city and county that enacted the ordinance authorizing the bingo game may bring an action to enjoin a violation of this section.
(e)Minors shall not be allowed to participate in any bingo game.
(f)An organization authorized to conduct bingo games pursuant to subdivision (a) shall conduct a bingo game only on property owned or leased by it, or property whose use is donated to the organization, and which property is used by that organization for an office or for performance of the purposes for which the organization is organized. This subdivision does not require that the property owned or leased by, or whose use is donated to, the organization be used or leased exclusively by, or donated exclusively to, that organization.
(g)A bingo game shall be open to the public, not just to the members of the authorized organization.
(h)A bingo game shall be operated and staffed only by members of the authorized organization that organized it. Those members shall not receive a profit, wage, or salary from a bingo game. Only the organization authorized to conduct a bingo game shall operate the bingo game, or participate in the promotion, supervision, or any other phase of a bingo game. This subdivision does not preclude the employment of security personnel who are not members of the authorized organization at a bingo game by the organization conducting the game.
(i)An individual, corporation, partnership, or other legal entity, except the organization authorized to conduct a bingo game, shall not hold a financial interest in the conduct of a bingo game.
(j)With respect to organizations exempt from payment of the bank and corporation tax by Section 23701d of the Revenue and Taxation Code, all profits derived from a bingo game shall be kept in a special fund or account and shall not be commingled with any other fund or account. Those profits shall be used only for charitable purposes.
(k)With respect to other organizations authorized to conduct bingo games pursuant to this section, all proceeds derived from a bingo game shall be kept in a special fund or account and shall not be commingled with any other fund or account. Proceeds are the receipts of bingo games conducted by organizations not within subdivision (j). Those proceeds shall be used only for charitable purposes, except as follows:
(1)The proceeds may be used for prizes.
(2)(A)Except as provided in subparagraph (B), a portion of the proceeds, not to exceed 20 percent of the proceeds before the deduction for prizes, or two thousand dollars ($2,000) per month, whichever is less, may be used for the rental of property and for overhead, including the purchase of bingo equipment, administrative expenses, security equipment, and security personnel.
(B)For the purposes of bingo games conducted by the Lake Elsinore Elks Lodge, a portion of the proceeds, not to exceed 20 percent of the proceeds before the deduction for prizes, or three thousand dollars ($3,000) per month, whichever is less, may be used for the rental of property and for overhead, including the purchase of bingo equipment, administrative expenses, security equipment, and security personnel. Any amount of the proceeds that is additional to that permitted under subparagraph (A), up to one thousand dollars ($1,000), shall be used for the purpose of financing the rebuilding of the facility and the replacement of equipment that was destroyed by fire in 2007. The exception to subparagraph (A) that is provided by this subparagraph shall remain in effect only until the cost of rebuilding the facility is repaid, or January 1, 2019, whichever occurs first.
(3)The proceeds may be used to pay license fees.
(4)A city, county, or city and county that enacts an ordinance permitting bingo games may specify in the ordinance that if the monthly gross receipts from bingo games of an organization within this subdivision exceed five thousand dollars ($5,000), a minimum percentage of the proceeds shall be used only for charitable purposes not relating to the conducting of bingo games and that the balance shall be used for prizes, rental of property, overhead, administrative expenses, and payment of license fees. The amount of proceeds used for rental of property, overhead, and administrative expenses is subject to the limitations specified in paragraph (2).
(l)(1)A city, county, or city and county may impose a license fee on each organization that it authorizes to conduct bingo games. The fee, whether for the initial license or renewal, shall not exceed fifty dollars ($50) annually, except as provided in paragraph (2). If an application for a license is denied, one-half of any license fee paid shall be refunded to the organization.
(2)In lieu of the license fee permitted under paragraph (1), a city, county, or city and county may impose a license fee of fifty dollars ($50) paid upon application. If an application for a license is denied, one-half of the application fee shall be refunded to the organization. An additional fee for law enforcement and public safety costs incurred by the city, county, or city and county that are directly related to bingo activities may be imposed and shall be collected monthly by the city, county, or city and county issuing the license. However, the fee shall not exceed the actual costs incurred in providing the service.
(m)A person shall not be allowed to participate in a bingo game, unless the person is physically present at the time and place where the bingo game is being conducted.
(n)The total value of prizes available to be awarded during the conduct of any bingo games shall not exceed one thousand dollars ($1,000) in cash or kind, or both, for each separate game that is held.
(o)As used in this section, bingo means a game of chance in which prizes are awarded on the basis of designated numbers or symbols that are marked or covered by the player on a tangible card in the players possession and that conform to numbers or symbols, selected at random and announced by a live caller. Notwithstanding Section 330c, as used in this section, the game of bingo includes tangible cards having numbers or symbols that are concealed and preprinted in a manner providing for distribution of prizes. Electronics or video displays shall not be used in connection with the game of bingo, except in connection with the callers drawing of numbers or symbols and the public display of that drawing, and except as provided in subdivision (p). The winning cards shall not be known prior to the game by any person participating in the playing or operation of the bingo game. All preprinted cards shall bear the legend, for sale or use only in a bingo game authorized under California law and pursuant to local ordinance. Only a covered or marked tangible card possessed by a player and presented to an attendant may be used to claim a prize. It is the intention of the Legislature that bingo as defined in this subdivision applies exclusively to this section and shall not be applied in the construction or enforcement of any other law.
(p)(1)Players who are physically present at a bingo game may use hand-held, portable card-minding devices, as described in this subdivision, to assist in monitoring the numbers or symbols announced by a live caller as those numbers or symbols are called in a live game. Card-minding devices may not be used in connection with any game where a bingo card may be sold or distributed after the start of the ball draw for that game. A card-minding device shall do all of the following:
(A)Be capable of storing in the memory of the device bingo faces of tangible cards purchased by a player.
(B)Provide a means for bingo players to input manually each individual number or symbol announced by a live caller.
(C)Compare the numbers or symbols entered by the player to the bingo faces previously stored in the memory of the device.
(D)Identify winning bingo patterns that exist on the stored bingo faces.
(2)A card-minding device shall not perform functions involving the play of the game other than those described in paragraph (1). Card-minding devices shall not do any of the following:
(A)Be capable of accepting or dispensing any coins, currency, or other representative of value or on which value has been encoded.
(B)Be capable of monitoring any bingo card face other than the faces of the tangible bingo card or cards purchased by the player for that game.
(C)Display or represent the game result through any means, including, but not limited to, video or mechanical reels or other slot machine or casino game themes, other than highlighting the winning numbers or symbols marked or covered on the tangible bingo cards or giving an audio alert that the players card has a prize-winning pattern.
(D)Determine the outcome of any game or be physically or electronically connected to any component that determines the outcome of a game or to any other bingo equipment, including, but not limited to, the ball call station, or to any other card-minding device. Other player-operated or player-activated electronic or electromechanical devices or equipment are not permitted to be used in connection with a bingo game.
(3)(A)A card-minding device shall be approved in advance by the department as meeting the requirements of this section and any additional requirements stated in regulations adopted by the department. Any proposed material change to the device, including a change to the software used by the device, shall be submitted to the department and approved by the department prior to implementation.
(B)In accordance with Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, the commission shall establish reasonable criteria for, and require the licensure of, a person that directly or indirectly manufactures, distributes, supplies, vends, leases, or otherwise provides card-minding devices or other supplies, equipment, or services related to card-minding devices designed for use in the playing of bingo games by a nonprofit organization.
(C)A person or entity that supplies or services a card-minding device shall meet all licensing requirements established by the commission in regulations.
(4)The costs of any testing, certification, license, or determination required by this subdivision shall be borne by the person or entity seeking it.
(5)On and after January 1, 2010, the Department of Justice may inspect all card-minding devices at any time without notice, and may immediately prohibit the use of a device that does not comply with the requirements established by the department in regulations. The Department of Justice may at any time, without notice, impound a device the use of which has been prohibited by the commission.
(6)The Department of Justice shall issue regulations to implement the requirements of this subdivision, and the California Gambling Control Commission may issue regulations regarding the means by which the operator of a bingo game, as required by applicable law, may offer assistance to a player with disabilities in order to enable that player to participate in a bingo game. However, the means of providing that assistance shall not be through an electronic, electromechanical, or other device or equipment that accepts the insertion of a coin, currency, token, credit card, or other means of transmitting value, and that does not constitute, or is not a part of a system that constitutes, a video lottery terminal, slot machine, or device prohibited by Chapter 10 (commencing with Section 330).
(7)The following definitions apply for purposes of this subdivision:
(A)Commission means the California Gambling Control Commission.
(B)Department means the Department of Justice.
(C)Person includes a natural person, corporation, limited liability company, partnership, trust, joint venture, association, or other business organization.
(a)Neither the prohibition on gambling in this chapter nor in Chapter 10 (commencing with Section 330) applies to any bingo game that is conducted meets all of the following conditions:
(1)It is conducted in a city, county, or city and county pursuant to an ordinance enacted under Section 19 of Article IV of the State Constitution, if the ordinance allows games to be conducted only in accordance with this section and only by organizations exempted from the payment of the bank and corporation tax by Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701w, and 23701l of the Revenue and Taxation Code and by Code.
(2)It is conducted by a mobilehome park associations, association, senior citizens organizations, and organization, or charitable organizations organization affiliated with a school district; and if the district.
(3)The receipts of those games the bingo game are used only for charitable purposes.
(b)It is a misdemeanor for any a person to receive or pay a profit, wage, or salary from any bingo game authorized by Section 19 of Article IV of the State California Constitution. Security personnel employed by the organization conducting the bingo game may be paid from the revenues of bingo games, as provided in subdivisions (j) and (k).
(c)A violation of subdivision (b) shall be punishable by a fine not to exceed ten thousand dollars ($10,000), which fine is deposited in the general fund of the city, county, or city and county that enacted the ordinance authorizing the bingo game. A violation of any provision of this section, other than subdivision (b), is a misdemeanor.
(d)The city, county, or city and county that enacted the ordinance authorizing the bingo game may bring an action to enjoin a violation of this section.
(e)Minors shall not be allowed to participate in any bingo game.
(f)An organization authorized to conduct bingo games pursuant to subdivision (a) shall conduct a bingo game only on property owned or leased by it, or property whose use is donated to the organization, and which property is used by that organization for an office or for performance of the purposes for which the organization is organized. Nothing in this This subdivision shall be construed to does not require that the property owned or leased by, or whose use is donated to, the organization be used or leased exclusively by, or donated exclusively to, that organization.
(g)All A bingo games game shall be open to the public, not just to the members of the authorized organization.
(h)A bingo game shall be operated and staffed only by members of the authorized organization that organized it. Those members shall not receive a profit, wage, or salary from any a bingo game. Only the organization authorized to conduct a bingo game shall operate such a the bingo game, or participate in the promotion, supervision, or any other phase of a bingo game. This subdivision does not preclude the employment of security personnel who are not members of the authorized organization at a bingo game by the organization conducting the game.
(i)Any An individual, corporation, partnership, or other legal entity, except the organization authorized to conduct a bingo game, shall not hold a financial interest in the conduct of a bingo game.
(j)With respect to organizations exempt from payment of the bank and corporation tax by Section 23701d of the Revenue and Taxation Code, all profits derived from a bingo game shall be kept in a special fund or account and shall not be commingled with any other fund or account. Those profits shall be used only for charitable purposes.
(k)With respect to other organizations authorized to conduct bingo games pursuant to this section, all proceeds derived from a bingo game shall be kept in a special fund or account and shall not be commingled with any other fund or account. Proceeds are the receipts of bingo games conducted by organizations not within subdivision (j). Those proceeds shall be used only for charitable purposes, except as follows:
(1)The proceeds may be used for prizes.
(2)(A)Except as provided in subparagraph (B), a portion of the proceeds, not to exceed 20 percent of the proceeds before the deduction for prizes, or two thousand dollars ($2,000) per month, whichever is less, may be used for the rental of property and for overhead, including the purchase of bingo equipment, administrative expenses, security equipment, and security personnel.
(B)For the purposes of bingo games conducted by the Lake Elsinore Elks Lodge, a portion of the proceeds, not to exceed 20 percent of the proceeds before the deduction for prizes, or three thousand dollars ($3,000) per month, whichever is less, may be used for the rental of property and for overhead, including the purchase of bingo equipment, administrative expenses, security equipment, and security personnel. Any amount of the proceeds that is additional to that permitted under subparagraph (A), up to one thousand dollars ($1,000), shall be used for the purpose of financing the rebuilding of the facility and the replacement of equipment that was destroyed by fire in 2007. The exception to subparagraph (A) that is provided by this subparagraph shall remain in effect only until the cost of rebuilding the facility is repaid, or January 1, 2019, whichever occurs first.
(3)The proceeds may be used to pay license fees.
(4)A city, county, or city and county that enacts an ordinance permitting bingo games may specify in the ordinance that if the monthly gross receipts from bingo games of an organization within this subdivision exceed five thousand dollars ($5,000), a minimum percentage of the proceeds shall be used only for charitable purposes not relating to the conducting of bingo games and that the balance shall be used for prizes, rental of property, overhead, administrative expenses, and payment of license fees. The amount of proceeds used for rental of property, overhead, and administrative expenses is subject to the limitations specified in paragraph (2).
(l)(1)A city, county, or city and county may impose a license fee on each organization that it authorizes to conduct bingo games. The fee, whether for the initial license or renewal, shall not exceed fifty dollars ($50) annually, except as provided in paragraph (2). If an application for a license is denied, one-half of any license fee paid shall be refunded to the organization.
(2)In lieu of the license fee permitted under paragraph (1), a city, county, or city and county may impose a license fee of fifty dollars ($50) paid upon application. If an application for a license is denied, one-half of the application fee shall be refunded to the organization. An additional fee for law enforcement and public safety costs incurred by the city, county, or city and county that are directly related to bingo activities may be imposed and shall be collected monthly by the city, county, or city and county issuing the license; however, license. However, the fee shall not exceed the actual costs incurred in providing the service.
(m)A person shall not be allowed to participate in a bingo game, unless the person is physically present at the time and place where the bingo game is being conducted.
(n)The total value of prizes available to be awarded during the conduct of any bingo games shall not exceed five hundred one thousand dollars ($500) ($1,000) in cash or kind, or both, for each separate game which that is held.
(o)As used in this section, bingo means a game of chance in which prizes are awarded on the basis of designated numbers or symbols that are marked or covered by the player on a tangible card in the players possession and that conform to numbers or symbols, selected at random and announced by a live caller. Notwithstanding Section 330c, as used in this section, the game of bingo includes tangible cards having numbers or symbols that are concealed and preprinted in a manner providing for distribution of prizes. Electronics or video displays shall not be used in connection with the game of bingo, except in connection with the callers drawing of numbers or symbols and the public display of that drawing, and except as provided in subdivision (p). The winning cards shall not be known prior to the game by any person participating in the playing or operation of the bingo game. All preprinted cards shall bear the legend, for sale or use only in a bingo game authorized under California law and pursuant to local ordinance. Only a covered or marked tangible card possessed by a player and presented to an attendant may be used to claim a prize. It is the intention of the Legislature that bingo as defined in this subdivision applies exclusively to this section and shall not be applied in the construction or enforcement of any other provision of law.
(p)(1)Players who are physically present at a bingo game may use hand-held, portable card-minding devices, as described in this subdivision, to assist in monitoring the numbers or symbols announced by a live caller as those numbers or symbols are called in a live game. Card-minding devices may not be used in connection with any game where a bingo card may be sold or distributed after the start of the ball draw for that game. A card-minding device shall do all of the following:
(A)Be capable of storing in the memory of the device bingo faces of tangible cards purchased by a player.
(B)Provide a means for bingo players to input manually each individual number or symbol announced by a live caller.
(C)Compare the numbers or symbols entered by the player to the bingo faces previously stored in the memory of the device.
(D)Identify winning bingo patterns that exist on the stored bingo faces.
(2)A card-minding device shall not perform no functions involving the play of the game other than those described in paragraph (1). Card-minding devices shall not do any of the following:
(A)Be capable of accepting or dispensing any coins, currency, or other representative of value or on which value has been encoded.
(B)Be capable of monitoring any bingo card face other than the faces of the tangible bingo card or cards purchased by the player for that game.
(C)Display or represent the game result through any means, including, but not limited to, video or mechanical reels or other slot machine or casino game themes, other than highlighting the winning numbers or symbols marked or covered on the tangible bingo cards or giving an audio alert that the players card has a prize-winning pattern.
(D)Determine the outcome of any game or be physically or electronically connected to any component that determines the outcome of a game or to any other bingo equipment, including, but not limited to, the ball call station, or to any other card-minding device. No other Other player-operated or player-activated electronic or electromechanical device devices or equipment is are not permitted to be used in connection with a bingo game.
(3)(A)A card-minding device shall be approved in advance by the department as meeting the requirements of this section and any additional requirements stated in regulations adopted by the department. Any proposed material change to the device, including any a change to the software used by the device, shall be submitted to the department and approved by the department prior to implementation.
(B)In accordance with Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code, the commission shall establish reasonable criteria for, and require the licensure of, any a person that directly or indirectly manufactures, distributes, supplies, vends, leases, or otherwise provides card-minding devices or other supplies, equipment, or services related to card-minding devices designed for use in the playing of bingo games by any a nonprofit organization.
(C)A person or entity that supplies or services any a card-minding device shall meet all licensing requirements established by the commission in regulations.
(4)The costs of any testing, certification, license, or determination required by this subdivision shall be borne by the person or entity seeking it.
(5)On and after January 1, 2010, the Department of Justice may inspect all card-minding devices at any time without notice, and may immediately prohibit the use of any a device that does not comply with the requirements established by the department in regulations. The Department of Justice may at any time, without notice, impound any a device the use of which has been prohibited by the commission.
(6)The Department of Justice shall issue regulations to implement the requirements of this subdivision, and the California Gambling Control Commission may issue regulations regarding the means by which the operator of a bingo game, as required by applicable law, may offer assistance to a player with disabilities in order to enable that player to participate in a bingo game, provided that game. However, the means of providing that assistance shall not be through any an electronic, electromechanical, or other device or equipment that accepts the insertion of any a coin, currency, token, credit card, or other means of transmitting value, and that does not constitute constitute, or is not a part of a system that constitutes constitutes, a video lottery terminal, slot machine, or device prohibited by Chapter 10 (commencing with Section 330).
(7)The following definitions apply for purposes of this subdivision:
(A)Commission means the California Gambling Control Commission.
(B)Department means the Department of Justice.
(C)Person includes a natural person, corporation, limited liability company, partnership, trust, joint venture, association, or any other business organization.
|
Date
|
Status
|
|---|---|
| Jun 15, 2016 | Read second time. Ordered to third reading. |
| Aug 27, 2015 | Read third time and amended. Ordered to second reading. |
| Aug 31, 2015 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10 (c). |
| Aug 31, 2015 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(c). |
| Aug 31, 2015 | Read second time. Ordered to third reading. |
| Sep 3, 2015 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on RLS. |
| Jan 28, 2016 | Re-referred to Com. on G.O. |
| May 10, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (May 10). Re-referred to Com. on APPR. |
| Jun 14, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Aug 18, 2015 | Read second time. Ordered to third reading. |
| Aug 1, 2016 | Read third time. Urgency clause adopted. Passed. Ordered to the Assembly. |
| Aug 1, 2016 | Read third time. Urgency clause adopted. Passed. Ordered to the Assembly. (Ayes 38. Noes 0. Page 4723.). |
| Aug 2, 2016 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after August 4 pursuant to Assembly Rule 77. |
| Aug 8, 2016 | Urgency clause adopted. Senate amendments concurred in. To Engrossing and Enrolling. |
| Aug 8, 2016 | Urgency clause adopted. Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 76. Noes 0. Page 5742.). |
| Aug 12, 2016 | Enrolled and presented to the Governor at 11:30 a.m. |
| Aug 22, 2016 | Approved by the Governor. |
| Aug 22, 2016 | Chaptered by Secretary of State - Chapter 159, Statutes of 2016. |
| May 22, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 75. Noes 0. Page 1542.) |
| Feb 18, 2015 | From printer. May be heard in committee March 20. |
| Mar 2, 2015 | Referred to Com. on G.O. |
| Apr 30, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on G.O. Read second time and amended. |
| May 4, 2015 | Re-referred to Com. on G.O. |
| May 7, 2015 | From committee: Do pass. (Ayes 18. Noes 0.) (May 6). |
| May 11, 2015 | Read second time. Ordered to third reading. |
| May 22, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 22, 2015 | Read third time. Passed. Ordered to the Senate. |
| Feb 17, 2015 | Read first time. To print. |
| Jun 4, 2015 | Referred to Com. on G.O. |
| Jul 14, 2015 | From committee: Do pass. To Consent Calendar. (Ayes 13. Noes 0.) (July 14). |
| Jul 15, 2015 | Read second time. Ordered to Consent Calendar. |
| Jul 16, 2015 | From Consent Calendar. |
| Jul 16, 2015 | Ordered to inactive file at the request of Senator Hall. |
| Aug 17, 2015 | From inactive file. |
| Aug 17, 2015 | Ordered to second reading. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 8, 2016 | AB 364 GIPSON Concurrence - Urgency Added | Assembly Floor |
Passed |
|
| Aug 1, 2016 | Assembly 3rd Reading AB364 Gipson By Hall Urgency Clause | Senate Floor |
Passed |
|
| May 10, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governmental Organization |
Passed |
|
| Jul 14, 2015 | Do pass and be ordered to the Consent Calendar | Senate Standing Committee on Governmental Organization |
Passed |
|
| May 22, 2015 | AB 364 GIPSON Assembly Third Reading | Assembly Floor |
Passed |
|
| May 6, 2015 | Do pass. | Assembly Standing Committee on Governmental Organization |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 364
Author:(Gipson)
As Amended Ver:September 3, 2015
2/3 vote. Urgency
ASSEMBLY: |
| (May 22, 2015) | SENATE: | 38-0 | (August 1, 2016) |
(Vote not relevant)
Original Committee Reference: G.O.
SUMMARY: Clarifies that a jockey is automatically enrolled in the existing jockeys' retirement plan system when he or she applies for and receives a license by the California Horse Racing Board (CHRB) to race in California.
The Senate amendments delete the Assembly version of this bill, and instead:
- Provide that a person becomes a participant in the jockeys' retirement plan when he or she is licensed as a jockey in California.
- Make minor code maintenance changes.
- Contain an urgency clause, to take effect immediately.
EXISTING LAW:
- Authorizes advance deposit wagering (ADW) to be conducted, with the approval of the CHRB and requires the CHRB to develop and adopt rules to license and regulate all phases of operation of ADW.
- Authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an ADW provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that ADW provider.
- Requires that amounts distributed under ADW provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. The method used to calculate the reduction in proportionate share must be approved by the CHRB and deducted and distributed in specified amounts, including 50% of the money to the CHRB to establish and administer jointly with the organization certified as the majority representative of California-licensed jockeys, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
AS PASSED BY THE ASSEMBLY, this bill added the "Belmont Derby Invitational" to the group of stake races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
According to the author's office, the purpose of the bill is "to ensure that a jockey shall become a participant in the existing retirement plan when he or she is licensed by the CHRB to be a jockey in California. By streamlining the jockey retirement plan within the licensing process, this bill will ensure that every jockey receives his or her fair share of earned benefits."
A portion of the revenue generated by ADW is deposited into a trust jointly managed by the Jockeys' Guild and the CHRB. All licensed California jockeys are eligible to participate in the plan and a contribution is made for every race that a jockey rides. The pension fund has no unfunded liability, as it is a defined contribution plan – it is similar to a 401K plan. Each jockey has an individual account, which becomes active after riding in their first horse race in California. When a jockey retires, he or she receives an annuity purchased with the balance in their particular account, which pays them a monthly benefit. The funds are invested by the trustees and the contributions and earnings are annually allocated to each jockey on a per race basis. The current balance in the jockey pension plan is approximately $4.7 million.
In support: Writing in support, the Jockeys' Guild states, "Since many jockeys work in several states or periodically in California, as a practical matter, if jockeys are not enrolled in the retirement plan when they are licensed, it may be impossible to find them to get them to sign enrollment forms. This bill will insure that no jockeys fall through the cracks and inadvertently lose their benefits subjecting the State of California to potential liability."
There is no opposition on file.
Prior Legislation: AB 1539 (Governmental Organization Committee) of 2015 is similar to this bill. (Died in Assembly Appropriations Committee)
AB 1226 (Hall), Chapter 434, Statutes of 2013. Required the CHRB not to permit any portion of an entry, nomination, or other fee paid by an owner to be deducted from a jockey riding fee unless the entry, nomination, or other fee is paid exclusively by the owner and not reimbursed by any other person or entity.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0003606
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 364
:
PRIOR VOTES NOT RELEVANT
SENATE GOVERNMENTAL ORG. COMMITTEE: 10-0, 5/10/16
AYES: Hall, Berryhill, Block, Galgiani, Glazer, Hernandez, Hill, Lara, McGuire, Vidak
NO VOTE RECORDED: Bates, Gaines, Hueso
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
DIGEST: This bill clarifies that a jockey is automatically enrolled in the existing jockeys’ retirement plan system when he or she applies for and receives a license by the California Horse Racing Board (CHRB) to race in California.
ANALYSIS:
Existing law:
- Authorizes advance deposit wagering (ADW) to be conducted, with the approval of the CHRB and requires the CHRB to develop and adopt rules to license and regulate all phases of operation of ADW.
- Authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an ADW provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that ADW provider.
- Requires that amounts distributed under ADW provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. The method used to calculate the reduction in proportionate share must be approved by the CHRB and deducted and distributed in specified amounts, including 50% of the money to the CHRB to establish and administer jointly with the organization certified as the majority representative of California-licensed jockeys, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
This bill:
- Provides that a person becomes a participant in the jockeys’ retirement plan when he or she is licensed as a jockey in California.
- Contains an urgency clause, to take effect immediately.
- Makes minor code maintenance changes.
Background
According to the author’s office, the purpose of the bill is “to ensure that a jockey shall become a participant in the existing retirement plan when he or she is licensed by the CHRB to be a jockey in California. By streamlining the jockey retirement plan within the licensing process, this bill will ensure that every jockey receives his or her fair share of earned benefits.”
A portion of the revenue generated by ADW is deposited into a trust jointly managed by the Jockeys’ Guild and the CHRB. All licensed California jockeys are eligible to participate in the plan and a contribution is made for every race that a jockey rides. The pension fund has no unfunded liability, as it is a defined contribution plan – it is similar to a 401K plan. Each jockey has an individual account, which becomes active after riding in their first horse race in California. When a jockey retires, he or she receives an annuity purchased with the balance in their particular account, which pays them a monthly benefit. The funds are invested by the trustees and the contributions and earnings are annually allocated to each jockey on a per race basis. The current balance in the jockey pension plan is approximately $4.7 million.
Related/Prior Legislation
AB 1539 (Governmental Organization Committee, 2015) is similar to AB 364. (Died in Assembly Appropriations Committee)
AB 1226 (Hall, Chapter 434, Statutes of 2013) required the CHRB not to permit any portion of an entry, nomination, or other fee paid by an owner to be deducted from a jockey riding fee unless the entry, nomination, or other fee is paid exclusively by the owner and not reimbursed by any other person or entity.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT:
(Verified 6/14/16)
The Jockeys’ Guild (source)
OPPOSITION: (Verified 6/14/16)
None received
ARGUMENTS IN SUPPORT: Writing in support, the Jockeys’ Guild states, “Since many jockeys work in several states or periodically in California, as a practical matter, if jockeys are not enrolled in the retirement plan when they are licensed, it may be impossible to find them to get them to sign enrollment forms. This bill will insure that no jockeys fall through the cracks and inadvertently lose their benefits subjecting the State of California to potential liability.”
6/15/16 17:24:42
**** END ****
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB Hearing Date: 5/10/2016
Author: | Gipson | ||
Version: | Amended | ||
Urgency: | Fiscal: | ||
Consultant: | |||
SUBJECT:
DIGEST: This bill clarifies that a jockey is automatically enrolled in the existing jockeys’ retirement plan system when he or she applies for and receives a license by the California Horse Racing Board (CHRB) to race in California.
ANALYSIS:
Existing law:
- Authorizes advance deposit wagering (ADW) to be conducted, with the approval of the CHRB and requires the CHRB to develop and adopt rules to license and regulate all phases of operation of ADW.
- Authorizes a racing association, a fair, a satellite wagering facility, or a minisatellite wagering facility to enter into an agreement with an ADW provider to accept and facilitate the placement of any wager at its facility that a California resident could make through that ADW provider.
- Requires that amounts distributed under ADW provisions be proportionally reduced by an amount equal to 0.00295 multiplied by the amount handled on advance deposit wagers originating in California for each racing meeting, except for harness racing meetings, provided that the amount of this reduction not exceed $2,000,000. The method used to calculate the reduction in proportionate share must be approved by the CHRB and deducted and distributed in specified amounts, including 50% of the money to the CHRB to establish and administer jointly with the organization certified as the majority representative of California-licensed jockeys, a defined contribution retirement plan for California-licensed jockeys who retired from racing on or after January 1, 2009.
This bill:
- Provides that a person becomes a participant in the retirement plan when he or she is licensed as a jockey in California.
- Contains an urgency clause, to take effect immediately.
- Makes minor code maintenance changes.
Background
According to the author’s office, the purpose of the bill is “to ensure that a jockey shall become a participant in the existing retirement plan when he or she is licensed by the CHRB to be a jockey in California. By streamlining the jockey retirement plan within the licensing process, this bill will ensure that every jockey receives his or her fair share of earned benefits.”
A portion of the revenue generated by ADW is deposited into a trust jointly managed by the Jockeys’ Guild and the CHRB. All licensed California jockeys are eligible to participate in the plan and a contribution is made for every race that a jockey rides. The pension fund has no unfunded liability, as it is a defined contribution plan – it is similar to a 401K plan. Each jockey has an individual account, which becomes active after riding in their first horse race in California. When a jockey retires, he or she receives an annuity purchased with the balance in their particular account, which pays them a monthly benefit. The funds are invested by the trustees and the contributions and earnings are annually allocated to each jockey on a per race basis. The current balance in the jockey pension plan is approximately $4.7 million.
Prior/Related Legislation
AB 1539 (Governmental Organization Committee, 2015) is similar to AB 364. (Died in Assembly Appropriations Committee)
AB 1226 (Hall, Chapter 434, Statutes of 2013) required the CHRB not to permit any portion of an entry, nomination, or other fee paid by an owner to be deducted from a jockey riding fee unless the entry, nomination, or other fee is paid exclusively by the owner and not reimbursed by any other person or entity.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT:
The Jockeys’ Guild
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: Writing in support, the Jockeys’ Guild states, “Since many jockeys work in several states or periodically in California, as a practical matter, if jockeys are not enrolled in the retirement plan when they are licensed, it may be impossible to find them to get them to sign enrollment forms. This bill will insure that no jockeys fall through the cracks and inadvertently lose their benefits subjecting the State of California to potential liability.”
AB 364
Page 4
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 364
Amended: 4/30/15 in Assembly
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 7/14/15
AYES: Hall, Berryhill, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Runner, Vidak
ASSEMBLY FLOOR: 75-0, 5/22/15 - See last page for vote
SUBJECT: Horse racing: out-of-state thoroughbred races: Belmont Derby Invitational
DIGEST: This bill adds the “Belmont Derby Invitational” to the group of races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
ANALYSIS:
Existing law:
Provides that the California Horse Racing Board (CHRB) shall regulate the various forms of horse racing authorized in this state.
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.
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, the Apple Blossom Handicap or the Haskell Invitational.
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.
This bill adds the “Belmont Derby Invitational” to the group of races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
Background
Belmont Derby Invitational. The $1.25 million Belmont Derby Invitational (formerly known as the Jamaica Handicap) is an American thoroughbred horse race held annually in July at Belmont Park in New York. The grade I race attracts and showcases a strong international field for the 1 ¼ mile turf race. Notable past entries include Piet (a three time race winner) and millionaire thoroughbreds Ruhlmann (1988 winner), Subordination (1997 winner), and Artie Schiller (2004 winner).
The race is part of the internationally themed Stars & Stripes Racing Festival, also highlighted by the grade I $1 million Belmont Oaks Invitational for three year-old fillies, the grade II $500,000 Suburban Handicap, the grade III $500,000 Dwyer for three year-olds, the grade III $400,000 Belmont Sprint Championship, and the grade III $150,000 Victory Ride for three year-old filly sprinters.
Purpose of AB 364. This bill provides that all races imported by a thoroughbred association or fair that are part of the race card of the overall Belmont Derby Invitational will 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 bill is intended to help increase public interest and participation at California racetracks and satellite wagering facilities. The satellite importation of this historic and prestigious race will allow California racetracks to remain competitive, increase the wagering handle on this specific race day and will lead to increased purses, racetrack revenue, and breeders’ awards in this state.
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 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 would not have otherwise 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
SB 187 (Hall, 2015) adds the “Wood Memorial” to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
AB 650 (Perea, 2015) adds the full card of races originating from Keeneland Racecourse in Lexington, Kentucky, on “Blue Grass Stakes” day, to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
AB 2655 (Hall, Chapter 149, Statutes of 2014) added the “Apple Blossom Handicap” to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT:
(Verified 8/18/15)
None received
OPPOSITION: (Verified 8/18/15)
None received
ASSEMBLY FLOOR: 75-0, 5/22/15
AYES: Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Alejo, O'Donnell, Olsen, Waldron, Weber
Prepared by: Arthur Terzakis / G.O. / (916) 651-1530
8/20/15 16:16:16
**** END ****
AB 364
Page 4
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
CONSENT
Bill No: AB 364
Amended: 4/30/15 in Assembly
SENATE GOVERNMENTAL ORG. COMMITTEE: 13-0, 7/14/15
AYES: Hall, Berryhill, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire, Runner, Vidak
ASSEMBLY FLOOR: 75-0, 5/22/15 - See last page for vote
SUBJECT: Horse racing: out-of-state thoroughbred races: Belmont Derby Invitational
DIGEST: This bill adds the “Belmont Derby Invitational” to the group of races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
ANALYSIS:
Existing law:
Provides that the California Horse Racing Board (CHRB) shall regulate the various forms of horse racing authorized in this state.
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.
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, the Apple Blossom Handicap or the Haskell Invitational.
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.
This bill adds the “Belmont Derby Invitational” to the group of races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
Background
Belmont Derby Invitational. The $1.25 million Belmont Derby Invitational (formerly known as the Jamaica Handicap) is an American thoroughbred horse race held annually in July at Belmont Park in New York. The grade I race attracts and showcases a strong international field for the 1 ¼ mile turf race. Notable past entries include Piet (a three time race winner) and millionaire thoroughbreds Ruhlmann (1988 winner), Subordination (1997 winner), and Artie Schiller (2004 winner).
The race is part of the internationally themed Stars & Stripes Racing Festival, also highlighted by the grade I $1 million Belmont Oaks Invitational for three year-old fillies, the grade II $500,000 Suburban Handicap, the grade III $500,000 Dwyer for three year-olds, the grade III $400,000 Belmont Sprint Championship, and the grade III $150,000 Victory Ride for three year-old filly sprinters.
Purpose of AB 364. This bill provides that all races imported by a thoroughbred association or fair that are part of the race card of the overall Belmont Derby Invitational will 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 bill is intended to help increase public interest and participation at California racetracks and satellite wagering facilities. The satellite importation of this historic and prestigious race will allow California racetracks to remain competitive, increase the wagering handle on this specific race day and will lead to increased purses, racetrack revenue, and breeders’ awards in this state.
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 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 would not have otherwise 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
SB 187 (Hall, 2015) adds the “Wood Memorial” to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
AB 650 (Perea, 2015) adds the full card of races originating from Keeneland Racecourse in Lexington, Kentucky, on “Blue Grass Stakes” day, to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
AB 2655 (Hall, Chapter 149, Statutes of 2014) added the “Apple Blossom Handicap” to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT:
(Verified 7/14/15)
None received
OPPOSITION: (Verified 7/14/15)
None received
ASSEMBLY FLOOR: 75-0, 5/22/15
AYES: Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Alejo, O’Donnell, Olsen, Waldron, Weber
Prepared by: Arthur Terzakis / G.O. / (916) 651-1530
7/15/15 15:08:54
**** END ****
AB 364 (Gipson) Page 6 of 6
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Isadore Hall, III
Chair
2015 - 2016 Regular
Bill No: AB 364 Hearing Date: 7/14/2015
Author: |
Gipson |
||
Version: |
4/30/2015 Amended |
||
Urgency: |
No |
Fiscal: |
No |
Consultant: |
Arthur Terzakis |
||
SUBJECT: Horse racing: out-of-state thoroughbred races: Belmont Derby Invitational
DIGEST: This bill adds the “Belmont Derby Invitational” to the group of races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
ANALYSIS:
Existing law:
Provides that the California Horse Racing Board (CHRB) shall regulate the various forms of horse racing authorized in this state.
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.
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, the Apple Blossom Handicap or the Haskell Invitational.
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.
This bill adds the “Belmont Derby Invitational” to the group of races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
Background
Belmont Derby Invitational. The $1.25 million Belmont Derby Invitational (formerly known as the Jamaica Handicap) is an American thoroughbred horse race held annually in July at Belmont Park in New York. The grade I race attracts and showcases a strong international field for the 1 ¼ mile turf race. Notable past entries include Piet (a three time race winner) and millionaire thoroughbreds Ruhlmann (1988 winner), Subordination (1997 winner), and Artie Schiller (2004 winner).
The race is part of the internationally themed Stars & Stripes Racing Festival, also highlighted by the grade I $1 million Belmont Oaks Invitational for three year-old fillies, the grade II $500,000 Suburban Handicap, the grade III $500,000 Dwyer for three year-olds, the grade III $400,000 Belmont Sprint Championship, and the grade III $150,000 Victory Ride for three year-old filly sprinters.
Purpose of AB 364. This bill provides that all races imported by a thoroughbred association or fair that are part of the race card of the overall Belmont Derby Invitational will 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 bill is intended to help increase public interest and participation at California racetracks and satellite wagering facilities. The satellite importation of this historic and prestigious race will allow California racetracks to remain competitive, increase the wagering handle on this specific race day and will lead to increased purses, racetrack revenue, and breeders' awards in this state.
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 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 would not have otherwise 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
SB 187 (Hall, 2015) adds the “Wood Memorial” to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races. (Pending in Assembly policy committee)
AB 1295 (Gray, 2015) provides that the limitation of 50 imported races per day does not apply to races imported into the combined central and southern zones when there is live thoroughbred or fair racing being conducted in those zones but no live thoroughbred or fair racing is being conducted in the northern zone. (Pending in this committee)
AB 650 (Perea, 2015) adds the full card of races originating from Keeneland Racecourse in Lexington, Kentucky, on “Blue Grass Stakes” day, to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races. (Senate Inactive File)
AB 2655 (Hall, Chapter 149, Statutes of 2014) added the “Apple Blossom Handicap” to the group of stakes races in Horse Racing Law which are exempt from the 50-race per day limit on imported races.
AB 2693 (Governmental Organization, Chapter 350, Statutes of 2012), among other things, added the “Arkansas Derby” to the group of stakes 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 eight to ten 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 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 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 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 races conducted by another racing association on the day the other racing association conducts the Breeders 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.
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.
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.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT:
None received
OPPOSITION:
None received
AB 364
Page 3
ASSEMBLY THIRD READING
AB 364
(Gipson)
As Amended April 30, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Governmental Organization |
18-0 |
Gray, Linder, Achadjian, Alejo, Bigelow, Cooley, Cooper, Daly, Eduardo Garcia, Gipson, Roger Hernández, Jones-Sawyer, Levine, Mayes, Perea, Salas, Waldron, Wilk |
|
SUMMARY: Adds the "Belmont Derby Invitational" 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:
Provides that the California Horse Racing Board (CHRB) shall regulate the various forms of horse racing authorized in this state.
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.
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, the Apple Blossom Handicap or the Haskell Invitational.
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.
FISCAL EFFECT: None. This bill is keyed non-fiscal by Legislative Counsel.
COMMENTS:
Background: The $1.25 million Belmont Derby Invitational is an American thoroughbred horse race held annually in July at Belmont Park in New York. The grade I race attracts and showcases a strong international field for the one and one-fourth-mile turf race. Notable entries in the Belmont Derby include Piet (three-time race winner) and millionaire thoroughbreds Ruhlmann (1988 winner), Subordination (1997 winner), and Artie Shiller (2004 winner).
The race is part of the internationally-themed Stars & Stripes Racing Festival, also highlighted by the grade I $1 million Belmont Oaks Invitational for three-year-old fillies, the grade II $500,000 Suburban Handicap, the grade III $500,000 Dwyer for three-year-olds, the grade III $400,000 Belmont Sprint Championship, and the grade III $150,000 Victory Ride for three-year-old filly sprinters.
Purpose of the bill: This bill provides that all races imported by a thoroughbred association or fair that are part of the race card of the overall Belmont Derby Invitational 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 public interest and participation at California racetracks and satellite wagering facilities. The satellite importation of this historic and prestigious race will allow California racetracks to remain competitive, increase the wagering handle on this specific race day and will lead to increased purses, racetrack revenue, and breeders' awards in this state.
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 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 1295 (Gray) of the current legislative session. Would provide that the limitation of 50 imported races per day does not apply to races imported into the combined central and southern zones when there is live thoroughbred or fair racing being conducted in those zones but no live thoroughbred or fair racing is being conducted in the northern zone. (Pending on Assembly floor)
AB 650 (Perea), of the current legislative session. This bill adds the "Blue Grass Stakes" to the group of stake races in Horse Racing Law which are exempt from the 50-race per day limit on imported races. (Pending on the Assembly Floor.)
AB 2655 (Hall), Chapter 149, Statutes of 2014. Added 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.
AB 2693 (Governmental Organization Committee), 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 eight 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 2790 (Governmental Organization Committee), 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 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.
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 fairgrounds. 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.
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531 FN: 0000330
AB 364
Page 3
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
AB 364 (
Gipson) – As Amended April 30, 2015
SUBJECT: Horse racing: out-of-state thoroughbred races: Belmont Derby Invitational.
SUMMARY: Adds the “Belmont Derby Invitational” 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:
Provides that the California Horse Racing Board (CHRB) shall regulate the various forms of horse racing authorized in this state.
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.
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, the Apple Blossom Handicap or the Haskell Invitational.
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.
FISCAL EFFECT: This bill is keyed non-fiscal by Legislative Counsel.
COMMENTS:
Background: The $1.25-million Belmont Derby Invitational is an American Thoroughbred horse race held annually in July at Belmont Park in New York. The grade I race attracts and showcases a strong international field for the 1 ¼-mile turf race. Notable entries in the Belmont Derby include Piet (3-time race winner) and millionaire Thoroughbreds Ruhlmann (1988 winner), Subordination (1997 winner), and Artie Shiller (2004 winner).
The race is part of the internationally-themed Stars & Stripes Racing Festival, also highlighted by the grade I $1 million Belmont Oaks Invitational for 3-year-old fillies, the grade II $500,000 Suburban Handicap, the grade III $500,000 Dwyer for 3-year-olds, the grade III $400,000 Belmont Sprint Championship, and the grade III $150,000 Victory Ride for 3-year-old filly sprinters.
Purpose of the bill: This measure provides that all races imported by a thoroughbred association or fair that are part of the race card of the overall Belmont Derby Invitational 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 public interest and participation at California racetracks and satellite wagering facilities. The satellite importation of this historic and prestigious race will allow California racetracks to remain competitive, increase the wagering handle on this specific race day and will lead to increased purses, racetrack revenue, and breeders' awards in this state.
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 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 1295 (Gray) 2015-16 Session. Would provide that the limitation of 50 imported races per day does not apply to races imported into the combined central and southern zones when there is live thoroughbred or fair racing being conducted in those zones but no live thoroughbred or fair racing is being conducted in the northern zone. (Pending in Assembly policy committee)
AB 650 (Perea), 2015-16 Session. This bill adds the “Blue Grass Stakes” 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 policy committee)
AB 2655 (Hall), Chapter 149, Statutes of 2014. Added 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.
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 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 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.
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 fairgrounds. 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.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531
Bill Author
Bill Co-Author(s):