Under existing law, the California Horse Racing Board is authorized to permit a harness or quarter horse association conducting a horse race to accept wagers on the results of out-of-state, out-of-country, and other designated harness or quarter horse races, if specified conditions are met, including that the association conducts at least 7 live races and imports not more than 10 races on live racing days. A violation of the Horse Racing Law is a crime.

This bill would also authorize wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of those races, if specified conditions are met. By imposing new requirements under the Horse Racing Law, the violation of which would be a crime, the bill would create new crimes and would thereby create a state-mandated local program.

Under existing law, revenues distributed to the state from horse racing are required to be deposited in the Fair and Exposition Fund and are continuously appropriated to the Secretary of Food and Agriculture for various regulatory and general governmental purposes. By providing for wagering on a nightly program of out-of-country harness racing, as provided, this bill would authorize additional wagering, and would increase the amount of continuously appropriated license fees, thereby making an appropriation.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Under existing law, the California Horse Racing Board is authorized to permit a harness or quarter horse association conducting a horse race to accept wagers on the results of out-of-state, out-of-country, and other designated harness or quarter horse races, if specified conditions are met, including that the association conducts at least 7 live races and imports not more than 10 races on live racing days. A violation of the Horse Racing Law is a crime.

This bill would also authorize wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of those races, if specified conditions are met. By imposing new requirements under the Horse Racing Law, the violation of which would be a crime, the bill would create new crimes and would thereby create a state-mandated local program.

Under existing law, revenues distributed to the state from horse racing are required to be deposited in the Fair and Exposition Fund and are continuously appropriated to the Secretary of Food and Agriculture for various regulatory and general governmental purposes. By providing for wagering on a nightly program of out-of-country harness racing, as provided, this bill would authorize additional wagering, and would increase the amount of continuously appropriated license fees, thereby making an appropriation.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Under existing law, the California Horse Racing Board is authorized to permit a harness or quarter horse association conducting a horse race to accept wagers on the results of out-of-state, out-of-country, and other designated harness or quarter horse races, if specified conditions are met, including that the association conducts at least 7 live races and imports not more than 10 races on live racing days. A violation of the Horse Racing Law is a crime.

This bill would also authorize wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of those races, if specified conditions are met. By imposing new requirements under the Horse Racing Law, the violation of which would be a crime, the bill would create new crimes and would thereby create a state-mandated local program.

Under existing law, revenues distributed to the state from horse racing are required to be deposited in the Fair and Exposition Fund and are continuously appropriated to the Secretary of Food and Agriculture for various regulatory and general governmental purposes. By providing for wagering on a nightly program of out-of-country harness racing, as provided, this bill would authorize additional wagering, and would increase the amount of continuously appropriated license fees, thereby making an appropriation.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

 THIRD READING  

Bill No: AB 2270

Author:

:

Vote:

SENATE GOVERNMENTAL ORG. COMMITTEE: 10-0, 6/12/18

AYES: Dodd, Wilk, Cannella, Gaines, Galgiani, Glazer, Hill, Hueso, Portantino, Vidak

NO VOTE RECORDED: Bradford, Lara

SENATE APPROPRIATIONS COMMITTEE: 7-0, 6/25/18

AYES: Portantino, Bates, Beall, Bradford, Hill, Nielsen, Wiener

ASSEMBLY FLOOR: 74-0, 4/26/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill authorizes wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races offered, if specified conditions are met.

ANALYSIS:

Existing law:

1. Provides that, pursuant to Article IV, Section 19(b) of the California Constitution, the Legislature may provide for the regulation of horse races and horse race meetings and wagering on the results.
2. Grants the California Horse Racing Board (CHRB) the authority to regulate the various forms of horse racing authorized in this state.
3. Allows the CHRB to authorize a harness or quarter horse association conducting a race meeting to accept wagers on the results of out-of-state or out-of-country harness or quarter horse races and, with the CHRB’s approval and with the concurrence of the horsemen’s organization contracting with the association, other designated harness or quarter horse races during the period it is conducting the racing meeting, if all of the following conditions are met:
   1. The authorization complies with federal laws.
   2. Wagering is offered only within the racing inclosure and only within 36 hours of the running of the out-of-state feature race.
   3. The association conducts at least seven live races, and imports not more than 10 races on those days during a racing meeting when live races are being run, except as specified.
   4. If only one breed of horse is being raced on a given day, then the association conducting the live racing may import those races that would otherwise be simulcast by the association that is not racing, as specified.
   5. No quarter horse or harness racing association shall accept wagers on out-of-state or out-of-country quarter horse or harness races commencing before 5:30 p.m., Pacific Standard Time, without the consent of any thoroughbred association or fair that is then conducting a live racing meeting in this state.

This bill:

1. Authorizes wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races imported, if all of the following conditions are met:
2. Only a harness racing association may import a nightly program of out-of-country harness racing from a single racetrack on days when a harness racing association is conducting live racing.
3. On days when a harness racing association does not conduct live racing, a quarter horse association conducting live racing on that day may accept wagers on a nightly program of out-of-country harness racing from a single racetrack.
4. A nightly program of out-of-country harness racing from a single racetrack may be imported in addition to the authorizations, as specified.
5. Provides that after the deductions required by statute and the rules of the CHRB, the remaining funds from the total amount handled on out-of-country harness racing authorized pursuant to this bill shall be distributed equally to the racing associations conducting night meetings in that calendar year.
6. Provides that the funds distributed to a harness racing association pursuant to this bill shall be distributed 50% as commissions and 50% as purses. Funds distributed to a quarter horse racing association pursuant to this bill shall be distributed as commissions.

Background

Harness racing. Harness racing is a form of horse racing in which the horses race at a specific gait, either a trot or a pace, and pull a two-wheeled cart occupied by the driver. The California Exposition & State Fair (Cal Expo) has been the site of harness racing meetings since the 1970s, and is currently the only operating live harness meet in California. The meetings are conducted October through May of each year, employing more than 500 horsemen and horsewomen.

In the 1990s, California racetracks began importing out-of-state and out-of-country races to combat sagging attendance and revenue. The introduction of out-of-state and out-of-country races has been generally well received in California. After downward business spiral experienced early in this century at racetracks throughout the nation, wagering by fans of California racing held steady at about $3 billion for the seventh year in a row.

The author points out that on-track wagering makes up less than 12 percent of all wagers placed and that the shift towards off-track wagering has resulted in fewer visitors to Cal Expo and the State Fair. The author argues that this bill will increase revenue for the track, benefit unionized workers employed in the horse racing industry, and increase live attendance. Further, the author states that increased funding to the Fair and Exposition Fund as a result of this bill will help sustain California’s state, county, and district fairs, and benefit the administering state agencies.

Comments

Purpose of the bill. According to the author, “dating back to 1933, California has a long history of horse racing. During this time the horse racing industry has withstood many ups and downs, but has largely been in decline or remained stagnant since the year 2000. AB 2270 would allow a harness racing association to import one additional race program from a single international track on days when live harness races or quarter horse races are held. Giving race fans an additional option for wagering will boost attendance and bring renewed interest to horse racing.”

Related/Prior Legislation

AB 2330 (Bigelow, 2018) adds the “Florida Derby” to the group of races which are exempt from the 50-race per day limit on imported races in California. (Pending in the Senate Governmental Organization Committee)

AB 2739 (Gray, 2018) adds the “Whitney Stakes” to the group of races which are exempt from the 50-race per day limit on imported races in California. (Pending in the Senate Governmental Organization Committee)

AB 558 (Low, Chapter 3, Statutes of 2016) provided that the CHRB may authorize a racing association licensed to conduct a thoroughbred race meet to include up to six non-thoroughbred races per calendar year, pursuant to specified conditions.

AB 2520 (Hall, Chapter 347, Statutes of 2012) increased, from eight to 10, the amount of races a harness and quarter horse racing association may import (out-of-state or out-of-country) on live racing days.

ACA 119 (Hornblower, Resolution Chapter 101, Statutes of 1933) placed Proposition 3 on the June 1933 ballot, which was approved by the voters and authorized the Legislature to provide for the regulation of horse races and horse race meetings and wagering on the results thereof.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, this bill will have no additional state costs. This bill will potentially increase revenue from additional imported harness races. (Fair and Exposition Fund)

SUPPORT: (Verified 6/25/18)

California Exposition & State Fair

California Harness Horsemen’s Association

California Teamsters Public Affairs Council

Golden Bear Racing

SEIU California

OPPOSITION: (Verified 6/25/18)

None received

ARGUMENTS IN SUPPORT: The California Harness Horsemen’s Association states that, “AB 2270 will permit the racing association at Cal Expo to import an additional simulcast of one harness racing program from an out-of-country track on days when it is conducting live racing. Allowing the importation of an additional racing card each night will increase revenue for the harness racing industry at Cal Expo, helping it to remain profitable and to maintain wage and benefit level for the track’s unionized workforce. It will also increase revenue for satellite wagering facilities throughout the state.”

ASSEMBLY FLOOR: 74-0, 4/26/18

AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Fong, Cristina Garcia, Rodriguez

Prepared by:

6/26/18 13:31:04

**** END ****

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2270 (McCarty) - Horse racing: out-of-country harness racing

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

AB 2270 would authorize wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races offered, if specified conditions are met.

Fiscal Impact:

This bill would have no additional state costs. This bill would potentially increase revenue from additional imported harness races. (Fair and Exposition Fund)

Background:

Harness racing is a form of horse racing where the horses race at a specific gait and pull a two-wheeled cart occupied by a driver. The California Exposition & State Fair has been the site of harness racing meetings since the 1970s and is currently the only operating live harness meet in California.

In the 1990s, to combat reducing racetrack attendance and revenue, California began importing out-of-state and out-of-country races. A continued decline in attendance and stagnation of revenue has prompted racetracks to rely on revenues from in-state and out-of-state satellite wagering and account wagering. Current law, however, restricts the number of harness races that can be imported via satellite to 10 races per day by the respective racing association. Existing law has regularly been amended over the years to accommodate notable or specialized races. This bill would similarly allow for additional races outside the 10 race cap.

Under existing law, revenues distributed to the state from horse racing are deposited into the Fair and Expositions Fund and are continuously appropriated to the Secretary of Food and Agriculture for various regulatory and general governmental purposes.

Proposed Law:

This bill would authorize wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of those races, if the following conditions are met:

• Only a harness racing association may import a nightly program of out-of-country harness racing from a single racetrack on days when a harness racing association is conducting live racing;
• On days when a harness racing association does not conduct live racing, a quarter horse association conducting live racing on that day may accept wagers on a nightly program of out-of-country harness racing from a single racetrack;
• A nightly program of out-of-country harness racing from a single racetrack may be imported in addition to existing authorizations;
• After the deductions required by statute and the rules of the California Horse Racing Board (CHRB), the remaining funds from the total amount handled on out-of-country harness racing authorized pursuant to this bill shall be distributed equally to the racing associations conducting night meetings in that calendar year and that funds distributed to a harness racing association pursuant to this bill shall be distributed 50% as commissions and 50% as purses; funds distributed to a quarter horse racing association pursuant to this bill shall be distributed as commissions.

Related Legislation:

AB 2520 (Hall, Chapter 347, Statutes of 2012) increased, from eight to 10, the amount of races a harness and quarter horse racing association may import (out-of-state or out-of-country) on live racing days.

Staff Comments:

Staff notes that this bill would increase the amount of money deposited into a continuously appropriated fund which constitutes an appropriation.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2017 - 2018 Regular

Bill No: AB Hearing Date: 6/12/2018

SUBJECT:

DIGEST: This bill authorizes wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races offered, if specified conditions are met.

ANALYSIS:

Existing law:

1. Article IV, Section 19(b) of the Constitution of the State of California provides that the Legislature may provide for the regulation of horse races and horse race meetings and wagering on the results.
2. Grants the California Horse Racing Board (CHRB) the authority to regulate the various forms of horse racing authorized in this state.
3. Allows the CHRB to authorize a licensed harness racing association that is conducting a live racing meeting in this state to accept wagers on the full card of races conducted by another racing association on the day that the other association conducts the Breeders’ Crown Stakes, the Meadowlands Pace, the Hambletonian, the Cane Pace, the Kentucky Futurity, or the North American Cup.
4. Authorizes a licensed quarter horse racing association that is conducting a live racing meeting in this state to accept wagers on races conducted by the racing association that conducts the American Quarter Horse Racing Challenge, Texas Classic Futurity and Remington Park Futurity, if the races are conducted on the same day.
5. Allows the CHRB to authorize a harness or quarter horse association conducting a race meeting to accept wagers on the results of out-of-state or out-of-country harness or quarter horse races and, with the CHRB’s approval and with the concurrence of the horsemen’s organization contracting with the association, other designated harness or quarter horse races during the period it is conducting the racing meeting, if all of the following conditions are met:
   1. The authorization complies with federal laws.
   2. Wagering is offered only within the racing inclosure and only within 36 hours of the running of the out-of-state feature race.
   3. The association conducts at least seven live races, and imports not more than 10 races on those days during a racing meeting when live races are being run, except as specified.
   4. If only one breed of horse is being raced on a given day, then the association conducting the live racing may import those races that would otherwise be simulcast by the association that is not racing, as specified.
   5. No quarter horse or harness racing association shall accept wagers on out-of-state or out-of-country quarter horse or harness races commencing before 5:30 p.m., Pacific Standard Time, without the consent of any thoroughbred association or fair that is then conducting a live racing meeting in this state.
6. Requires the state to reimburse local agencies and school districts for certain costs mandated by the state.

This bill:

1. Authorizes wagering on nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races imported, if all of the following conditions are met:
2. Only a harness racing association may import a nightly program of out-of-country harness racing from a single racetrack on days when a harness racing association is conducting live racing.
3. On days when a harness racing association does not conduct live racing, a quarter horse association conducting live racing on that day may accept wagers on a nightly program of out-of-country harness racing from a single racetrack.
4. A nightly program of out-of-country harness racing from a single racetrack may be imported in addition to the authorizations, as specified.
5. Provides that after the deductions required by statute and the rules of the CHRB, the remaining funds from the total amount handled on out-of-country harness racing authorized pursuant to this bill shall be distributed equally to the racing associations conducting night meetings in that calendar year.
6. Provides that the funds distributed to a harness racing association pursuant to this bill shall be distributed 50% as commissions and 50% as purses. Funds distributed to a quarter horse racing association pursuant to this bill shall be distributed as commissions.
7. Provides that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution.
8. Makes technical and clarifying changes.

Background

Purpose of the bill. According to the author, “dating back to 1933, California has a long history of horse racing. During this time the horse racing industry has withstood many ups and downs, but has largely been in decline or remained stagnant since the year 2000. AB 2270 would allow a harness racing association to import one additional race program from a single international track on days when live harness races or quarter horse races are held. Giving race fans an additional option for wagering will boost attendance and bring renewed interest to horse racing.”

Harness racing. Harness racing is a form of horse racing in which the horses race at a specific gait, either a trot or a pace, and pull a two-wheeled cart occupied by the driver. The California Exposition & State Fair (Cal Expo) has been the site of harness racing meetings since the 1970s, and is currently the only operating live harness meet in California. The meetings are conducted October through May of each year, employing more than 500 horsemen and horsewomen.

In the 1990s, California racetracks began importing out-of-state and out-of-country races to combat sagging attendance and revenue. The introduction of out-of-state and out-of-country races has been generally well received in California. After downward business spiral experienced early in this century at racetracks throughout the nation, wagering by fans of California racing held steady at about $3 billion for the seventh year in a row.

The importation of out-of-state and out-of-country races have helped to off-set a continued reduction in on-track and off-track wagering. The general decline in the number of people attending and wagering at live racetracks in California can be attributed 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. This decline in attendance and stagnation of revenue has prompted racetracks to rely on revenues from in-state and out-of-state satellite wagering and account wagering. However, current law restricts the number of harness races that can be imported via satellite to 10 races per day by the respective racing association.

The author points out that on-track wagering makes up less than 12 percent of all wagers placed and that the shift towards off-track wagering has resulted in fewer visitors to Cal Expo and the State Fair. The author argues that this measure will increase revenue for the track, benefit unionized workers employed in the horse racing industry, and increase live attendance. Further, the author states that increased funding to the Fair and Exposition Fund as a result of this measure will help sustain California’s state, county, and district fairs, and benefit the administering state agencies.

Prior/Related Legislation

AB 2330 (Bigelow, 2018) adds the “Florida Derby” to the group of races which are exempt from the 50-race per day limit on imported races in California. (Pending in the Senate Governmental Organization Committee)

AB 2739 (Gray, 2018) adds the “Whitney Stakes” to the group of races which are exempt from the 50-race per day limit on imported races in California. (Pending in the Senate Governmental Organization Committee)

AB 1167 (Gray, 2017) allows CHRB to authorize a licensed quarter horse racing association that is conducting a live racing meeting in this state to accept wagers on a quarter horse stakes race with a purse equal to or greater than $100,000. (On the Senate Inactive File)

AB 558 (Low, Chapter 3, Statutes of 2016) provided that the CHRB may authorize a racing association licensed to conduct a thoroughbred race meet to include up to six non-thoroughbred races per calendar year, pursuant to specified conditions.

AB 2520 (Hall, Chapter 347, Statutes of 2012) increased, from eight to 10, the amount of races a harness and quarter horse racing association may import (out-of-state or out-of-country) on live racing days.

AB 897 (Hall, Chapter 225, Statutes of 2011) authorized the CHRB to permit a licensed California quarter horse racing association that is conducting a live racing meeting to accept wagers on the full card of races conducted by another racing association on the date that other association conducts the Texas Classic Futurity and Remington Park Futurity.

AB 2201 (Coto, Chapter 253, Statutes of 2010) authorized the CHRB to permit a California harness racing association to accept wagers on the full card of races conducted by another racing association on the date of the Cane Pace.

ACA 119 (Hornblower, Resolution Chapter 101, Statutes of 1933) placed Proposition 3 on the June 1933 ballot, which was approved by the voters and authorized the Legislature to provide for the regulation of horse races and horse race meetings and wagering on the results thereof.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: Yes

SUPPORT:

California Exposition & State Fair (Cal Expo)

California Harness Horsemen’s Association

California Teamsters Public Affairs Council

Golden Bear Racing

SEIU California

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: The California Harness Horsemen’s Association states that, “AB 2270 will permit the racing association at Cal Expo to import an additional simulcast of one harness racing program from an out-of-country track on days when it is conducting live racing. Allowing the importation of an additional racing card each night will increase revenue for the harness racing industry at Cal Expo, helping it to remain profitable and to maintain wage and benefit level for the track’s unionized workforce. It will also increase revenue for satellite wagering facilities throughout the state.”

Date of Hearing: April 18, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2270

Author:(McCarty) – As Introduced Ver:February 13, 2018

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill authorizes a quarter horse association and a harness racing association to offer wagering on a nightly program of out-of-country harness racing, if certain conditions are met, and provides that funds distributed to a harness racing association will be 50% commission and 50% purses and that funds distributed to a quarter horse racing association will be commissions.

FISCAL EFFECT:

No additional state costs.

COMMENTS:

Background and purpose. In response to declining attendance at live horse racing events, California racetracks have increasingly relied on revenues from in-state and out-of-state satellite wagering. Current law restricts the number of quarter horse or harness races that can be imported by the respective racing associations to 10 races per day. As a result, existing law has been regularly amended over the years to accommodate notable or specialized races, giving racetracks promotional and marketing tools to attract new customers. AB 2270 similarly allows for additional races outside the 10-race cap, which the author says will increase attendance and provide the industry a mechanism to increase track commissions, purses, and breeder’s awards.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: April 4, 2018

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Adam Gray, Chair

ABPCA Bill Id:AB 2270 (

Author:McCarty) – As Introduced Ver:February 13, 2018

SUBJECT: Horse racing: out-of-country harness racing

SUMMARY: Would authorize wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races offered, if specified conditions are met. Specifically, this bill:

1) Allows wagering on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of races imported, if all of the following conditions are met:

a) Only a harness racing association may import a nightly program of out-of-country harness racing from a single racetrack on days when a harness racing association is conducting live racing.

b) On days when a harness racing association does not conduct live racing, a quarter horse association conducting live racing on that day may accept wagers on a nightly program of out-of-country harness racing from a single racetrack.

c) A nightly program of out-of-country harness racing from a single racetrack may be imported in addition to the authorizations, as specified.

2) Provides that after the deductions required by this article and the rules of the board, the remaining funds from the total amount handled on out-of-country harness racing authorized pursuant to this subdivision shall be distributed equally to the racing associations conducting night meetings in that calendar year.

3) Provides that funds distributed to a harness racing association pursuant to this subdivision shall be distributed 50 percent as commissions and 50 percent as purses. Funds distributed to a quarter horse racing association pursuant to this subdivision shall be distributed as commissions.

4) Makes technical and clarifying changes.

EXISTING LAW:

1) Provides, under Article IV, Section 19(b) of the California Constitution, that the Legislature may provide for the regulation of horse races and horse race meetings and wagering on the results.

2) Grants the California Horse Racing Board (CHRB) the authority to regulate the various forms of horse racing authorized in this state.

3) Allows the CHRB to authorize a licensed harness racing association that is conducting a live racing meeting in this state to accept wagers on the full card of races conducted by another racing association on the day that the other association conducts the Breeders’ Crown Stakes, the Meadowlands Pace, the Hambletonian, the Cane Pace, the Kentucky Futurity, or the North American Cup.

4) Authorizes a licensed quarter horse racing association that is conducting a live racing meeting in this state to accept wagers on races conducted by the racing association that conducts the American Quarter Horse Racing Challenge, Texas Classic Futurity and Remington Park Futurity, if the races are conducted on the same day.

5) Allows the CHRB to authorize a harness or quarter horse association conducting a race meeting to accept wagers on the results of out-of-state or out-of-country harness or quarter horse races and, with the CHRB’s approval and with the concurrence of the horsemen’s organization contracting with the association, other designated harness or quarter horse races during the period it is conducting the racing meeting, if all of the following conditions are met:

• 1. The authorization complies with federal laws.
  2. Wagering is offered only within the racing inclosure and only within 36 hours of the running of the out-of-state feature race.
  3. The association conducts at least seven live races, and imports not more than 10 races on those days during a racing meeting when live races are being run, except as specified.
  4. If only one breed of horse is being raced on a given day, then the association conducting the live racing may import those races that would otherwise be simulcast by the association that is not racing, as specified.
  5. No quarter horse or harness racing association shall accept wagers on out-of-state or out-of-country quarter horse or harness races commencing before 5:30 p.m., Pacific Standard Time, without the consent of any thoroughbred association or fair that is then conducting a live racing meeting in this state.

FISCAL EFFECT: Unknown

COMMENTS:

Background. In the late 1990's, California racetracks began importing additional races from out-of-state and out-of-country locations to provide California's horse racing patrons with the opportunity to wager on quality races offered by racetracks throughout the country. Since the introduction of this practice (which, incidentally is authorized in many other states that likewise allow pari-mutuel wagering on horse races), wagering on these non-California races has been well received by the betting patron, as evidenced by modest increases in overall wagering activity. This has also helped the industry offset a continued reduction in on-track and off-track wagering activity. However, current law however restricts the number of quarter horse or harness races that can be imported via satellite to ten races per day by the respective racing association.

The California Exposition & State Fair has been the site of harness racing meetings since the early 1970s. Since mid-2012, Watch and Wager, LLC at Cal Expo has been operating the only harness race meet in California. Live harness racing is conducted October through May of each year. There are more than 500 horseman and horsewoman within the sport. These participants fulfil roles relating to the production, preparation, and daily care of racehorses. These individuals are the lifeblood of the harness racing industry, as they provide the investment, time, skills and passion.

It should be noted, there has been a general decline in the number of people attending and wagering at live horse tracks 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. This decline in 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.

Purpose of the bill. Over the years, existing law has been amended to allow specific notable races to be imported outside of a ten-race per day limit, as defined in current law. This has been done for scheduling, promotional and financial reasons. This bill would allow a harness or quarter horse racing association in California to import and accept wagers on a nightly program of out-of-country harness racing from a single racetrack, regardless of the number of those races, if specified conditions are met. Revenue generated from the importation of out-of-country harness racing will be distributed equally to the racing associations conducting night meetings in that calendar year.

The author’s office believes, this bill will give California's harness racing industry a marketing tool to increase on-track and off-track attendance and provide the industry with a mechanism to increase track commissions, purses, and breeder's awards. Purses provide revenues directly to horsemen (owners and trainers) through winnings of their horses; purses also indirectly provide revenues to breeders. Statistical data analysis has shown that as purses increase the expected price of a buying a horse increases leading to an increase in the supply of foals, yearlings and associated bloodstock (mares and stallions).

The sponsor of this bill, the California Harness Horsemen's Association, notes that harness racing in California is important to the overall health of the agricultural economy and to the local Sacramento community.

The author's office notes that it is vital to the interests of the harness racing industry and organized labor to continue racing in California. This bill will help further the long-term stability of the harness racing industry.

Related legislation. AB 1167 (Gray) of 2017. Would allow the CHRB to authorize a licensed quarter horse racing association that is conducting a live racing meeting in this state to accept wagers on a quarter-horse stakes race with a purse equal to or greater than $100,000. (Senate Inactive File)

Prior legislation. AB 558 (Low), Chapter 3, Statutes of 2016. Provided that the CHRB may authorize a racing association licensed to conduct a Thoroughbred race meet to include up to six non-thoroughbred races per calendar year, pursuant to specified conditions.

AB 2520 (Hall), Chapter 347, Statutes of 2012. Increased, from eight to 10, the amount of races a harness and quarter horse racing association may import (out-of-state or out-of-country) on live racing days.

AB 897 (Hall), Chapter 225, Statutes of 2011. Authorized the CHRB to permit a licensed California quarter horse racing association that is conducting a live racing meeting to accept wagers on the full card of races conducted by another racing association on the date that other association conducts the Texas Classic Futurity and Remington Park Futurity.

AB 2201 (Coto), Chapter 253, Statutes of 2010. Authorized the CHRB to permit a California harness racing association to accept wagers on the full card of races conducted by another racing association on the date of the Cane Pace.

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 2048 (Silva), Chapter 439, Statutes of 2008. Increased, among other things, the number of races a harness and quarter horse racing association may import on live racing days from six to eight races.

SB 1183 (Margett), Chapter 232, Statutes of 2004. Authorized a harness association to import the full cards of races held by the association hosting the Breeders Crown Stakes, the Meadowlands Pace, the Hambletonian, or the North American Cup on the days that those races are being run.

REGISTERED SUPPORT / OPPOSITION:

Support

California Exposition & State Fair (Cal Expo)

California Harness Horsemen’s Association

California Teamsters Public Affairs Council

SEIU California

Opposition

None on file

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531