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AB-1441 Horse racing: out-of-state thoroughbred races: Whitney Stakes.(2015-2016)

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AB1441:v97#DOCUMENT

Amended  IN  Assembly  January 04, 2016
Amended  IN  Assembly  September 10, 2015

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Assembly Bill No. 1441


Introduced by Assembly Member Gray

February 27, 2015


An act to add Chapter 4.6 (commencing with Section 19720) to Division 8 amend Section 19596.2 of the Business and Professions Code, and to amend Sections 336.9 and 337a of the Penal Code, relating to gambling. horse racing.


LEGISLATIVE COUNSEL'S DIGEST


AB 1441, as amended, Gray. Gambling: sports wagering. Horse racing: out-of-state thoroughbred races: Whitney Stakes.
Existing law, the Horse Racing Law, authorizes a thoroughbred racing association or fair to import thoroughbred races, not to exceed 50 races per day, in accordance with specified requirements. Existing law excludes specified races from the 50-race-per-day limit, including, but not limited to, races that are part of the race card of the Kentucky Derby and the Breeders’ Cup.
This bill would also exclude from the 50-race-per-day limit imported races that are part of the race card of the Whitney Stakes.

The California Constitution prohibits various gaming activities within the state, including casino-style gaming, but authorizes the Governor, subject to ratification by the Legislature, to negotiate and conclude compacts for the operation of slot machines and the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. The California Constitution also authorizes the Legislature to provide for the regulation of horse racing, charitable bingo games, the California State Lottery, and charitable raffles.

Existing federal law, referred to as the Professional and Amateur Sports Protection Act, prohibits a governmental entity or a person from conducting a lottery, sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly, on competitive games or performances in which amateur or professional athletes participate.

Existing law prohibits a person, whether or not for gain, hire, or reward, from placing a bet or wager on the result of any contest of skill, speed, or power of endurance of person, as specified, and prohibits a person from pool selling or bookmaking.

The Gambling Control Act provides for the licensure of certain individuals and establishments that conduct controlled games, as defined, and for the regulation of these gambling activities by the California Gambling Control Commission. Existing law provides for the enforcement of those regulations by the Department of Justice. Any willful violation of these provisions for which a punishment is not expressly provided, is punishable as a misdemeanor.

The Horse Racing Law provides for the licensure of every person who participates in, or has anything to do with, the racing of horses, and every employee of a parimutuel department by the California Horse Racing Board. The board is responsible for adopting rules and regulations for the protection of the public, the control of horse racing, and parimutuel wagering, as well as enforcing all laws, rules, and regulations dealing with horse racing and parimutuel wagering. The law permits the board to authorize an association licensed to conduct a racing meeting to also operate a satellite wagering facility at its racetrack inclosure, and for fairs to locate a satellite wagering facility at their fairgrounds, under specified conditions. Any violation of these provisions is punishable as a misdemeanor.

This bill would enact the California Interactive Sports Wagering Consumer Protection Act, which would authorize the owner or operator of a card room that holds a state gambling license, a racing association or racing fair with a current license, or a federally recognized California Indian tribe that operates a gaming facility pursuant to a facility license issued in accordance with a tribal gaming ordinance, to accept and facilitate wagering on a sports event, as defined, by any legal system or method of wagering, including, but not limited to, exchange wagering, parlays, over-under, moneyline, and straight bets, by applying to the Department of Justice for a license and authorization to conduct sports wagering, as defined. The bill would require sports wagering to be accepted and executed only using telephone, computer, or another method of electronic wagering communication. The bill would require each licensed operator to pay an annual fee of $_____ to the State Department of Public Health for deposit in the Gambling Addiction Program Fund. The bill would require each licensed operator to remit to the Treasurer on a quarterly basis for deposit in the ______ Fund an amount equal to _____ from the total win amount from the facilitation of a sports event wager. The bill would require the department to adopt regulations to implement these provisions, including authority to adopt regulations establishing fees in a reasonable amount necessary to recover the costs incurred by the department relating to the administration of these provisions.

This bill would require the department to, among other things, monitor the conduct of all licensed operators. The bill would prohibit a licensed operator from, among other things, accepting a wager from any person who is under 21 years of age or whose name appears on a self-exclusion list. Any willful violation of these provisions would be punishable as a misdemeanor. By creating a new crime, this bill would impose a state-mandated local program.

This bill would provide that its provisions would become operative only if the federal Professional and Amateur Sports Protection Act is amended or repealed to allow sports wagering in California and a state constitutional amendment to authorize sports wagering has been approved by the voters.

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.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

Vote: TWO_THIRDSMAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: YESNO  

The people of the State of California do enact as follows:


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 Cup, the Whitney Stakes, the Arkansas Derby, the Apple Blossom Handicap, 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 or Sacramento Counties.

SECTION 1.

The Legislature finds and declares all of the following:

(a)Since January 1, 1993, the federal Professional and Amateur Sports Protection Act (28 U.S.C. Sec. 3701 et seq.), known as PASPA, has prohibited most states and local governments from authorizing sports wagering.

(b)Under PASPA, Nevada is the only state where full-scale sports wagering is currently legally conducted, and this activity has resulted in great direct and indirect revenues to that state’s economy.

(c)It has been reported that more than 30 million people visit Nevada every year and place a sports bet. Betting on sporting events rose 7.7 percent to $3.9 billion in 2014, and revenue hit a record, jumping 11.8 percent to $227 million, according to the Nevada Gaming Control Board.

(d)There is no solid data on the volume of illegal sports betting activity occurring in the United States, but some estimate that nearly $400 billion is illegally wagered on sports each year.

(e)In January 2015, the American Gaming Association estimated that Americans were expected to make $3.8 billion worth of illegal bets on the 2015 Super Bowl between the New England Patriots and the Seattle Seahawks. That figure stands in stark contrast to the approximately $100 million bet legally on the Super Bowl each year. In fact, the illegal market is 38 times greater than the legal market for sports wagering.

(f)If the federal sports wagering ban is changed to allow sports wagering across the country, state gaming enforcement agencies would be required to properly regulate and enforce this activity.

(g)If the federal sports wagering ban is ever lifted, it is in the best interests of this State that legalized sports wagering be authorized to be conducted by licensed card rooms, licensed horse racing associations, and federally recognized Indian tribes, under regulation and control by the Department of Justice.

SEC. 2.Chapter 4.6 (commencing with Section 19720) is added to Division 8 of the Business and Professions Code, to read:
4.6.California Interactive Sports Wagering Consumer Protection Act
19720.

This chapter shall be known, and may be cited, as the California Interactive Sports Wagering Consumer Protection Act.

19721.

(a)Subject to a state constitutional amendment that has been approved by the voters and a change in federal law, the following entities may be licensed by the department to accept and facilitate wagering on sports events as authorized pursuant to this chapter:

(1)A card room that operates pursuant to Chapter 5 (commencing with Section 19800) whose owner or owners have been authorized, subject to oversight by, and are in good standing with, the applicable state regulatory authorities.

(2)A racing association or racing fair, with a current license issued by the California Horse Racing Board pursuant to Chapter 4 (commencing with Section 19400). A licensed racing association or licensed racing fair may conduct sports wagering only if it has an agreement in place with the organization recognized by the board that is responsible for negotiating purse agreements, satellite wagering agreements, and all other business agreements on behalf of horsemen and horsewomen participating in a racing meeting.

(3)A federally recognized California Indian tribe that operates a gaming facility pursuant to a facility license issued in accordance with a tribal gaming ordinance approved by the Chair of the National Indian Gaming Commission.

(b)The entities listed in subdivision (a) that are eligible for licensure pursuant to this chapter may form a partnership, joint venture, or any other affiliation in order to further the purposes of this chapter.

19722.

As used in this chapter, the following definitions shall apply:

(a)“Board” means the California Horse Racing Board.

(b)“Card room” means a gambling enterprise, as defined in subdivision (m) of Section 19805.

(c)“Department” means the Department of Justice.

(d)“Licensed operator” means any of the entities listed in subdivision (a) of Section 19721 that are authorized pursuant to this chapter to conduct sports wagering.

(e)“Prohibited sports event” means any collegiate sport or athletic event that takes place in California, or a sports event in which any California college team participates, regardless of where the event takes place.

(f)“Sports event” shall include any professional sports or athletic event, and any collegiate sports or athletic event, except a prohibited sports event.

(g)“Sports wagering” means the business of accepting wagers on a sports event by any legal system or method of wagering, including, but not limited to, exchange wagering, parlays, over-under, moneyline, and straight bets.

(h)“Internet” means the international computer network of both federal and nonfederal interoperable packet-switched data networks.

(i)“Licensed service provider” means a person who is licensed pursuant to this chapter to provide goods or services to a licensed operator for use in the operation of an authorized sports wagering Internet Web site.

19723.

(a)An entity listed in subdivision (a) of Section 19721 that is seeking to conduct sports wagering shall apply to the department for authorization to conduct sports wagering.

(b)(1)The department shall hear and decide, and in reasonable order, all applications to conduct sports wagering from licensed card rooms, licensed racing associations or racing fairs, federally recognized Indian tribes, and service providers.

(2)Authorization to conduct sports wagering shall not be unreasonably withheld from any applicant that is in good standing and has a current license issued pursuant to Chapter 4 (commencing with Section 19400) or Chapter 5 (commencing with Section 19800).

(c)Each licensed operator shall pay an annual fee of _____ ($_____) to the State Department of Public Health for deposit in the Gambling Addiction Program Fund.

(d)In consideration of the substantial value of each license, each licensed operator shall remit to the Treasurer on a quarterly basis for deposit in the _______ Fund an amount equal to _____ from the total win amount from the facilitation of a sports event wager.

19724.

Within 270 days after the operative date of this chapter, the department shall adopt regulations for the administration of this chapter and may adopt regulations establishing fees in a reasonable amount necessary to recover the costs incurred by the department relating to the administration of this chapter.

19725.

The regulations adopted by the department shall do both of the following:

(a)Provide for the approval of wagering rules and equipment by the department to ensure fairness to the public and compliance with state law, including, but not limited to, all of the following:

(1)Acceptance of wagers on a series of sports events.

(2)Types of wagering tickets that may be used.

(3)The method of issuing tickets.

(b)Govern all of the following:

(1)The extension of credit.

(2)The cashing, deposit, and redemption of checks or other negotiable instruments.

(3)The amount of cash reserves to be maintained by licensed operators to cover winning wagers.

(4)The provision of reliable records, accounts, and reports of transactions, operations, and events, the method of accounting to be used by licensed operators, and the types of records required to be maintained.

19726.

The sports wagering authorized pursuant to this chapter shall be accepted and executed only using telephone, computer, or another method of electronic wagering communication.

19727.

A licensed operator shall not do any of the following:

(a)Accept a wager from a person who is under 21 years of age.

(b)Accept a sports wager unless the transmission of a wager is initiated from within the State of California.

(c)Accept a wager from any person whose name appears on any self-exclusion list.

19728.

Each licensed operator’s sports wagering Internet Web site shall contain information relating to problem gambling, including a telephone number that an individual may call to seek information and assistance for a potential gambling addiction.

19729.

A licensed operator shall establish the odds it will pay on wagers placed on sports events.

19730.

(a)A licensed operator shall not conduct any sports wagering in violation of this chapter, any regulation adopted pursuant to this chapter, or any governing local ordinance.

(b)Any person who willfully violates this chapter is guilty of a misdemeanor.

19731.

(a)The department shall have all of the following responsibilities:

(1)To monitor the conduct of all licensed operators and other persons having a material involvement, directly or indirectly, with a sports wagering operation.

(2)To investigate suspected violations of this chapter.

(3)To investigate complaints that are lodged against licensed operators, or other persons associated with a sports wagering operation, by members of the public.

(4)To initiate, when appropriate, disciplinary actions. In connection with any disciplinary action pursuant to this chapter, the department may seek restriction, limitation, suspension, or revocation of any license, permit, authorization, or approval pursuant to this chapter, Chapter 4 (commencing with Section 19400), or Chapter 5 (commencing with Section 19800), or the imposition of a fine upon a person licensed, permitted, authorized, or approved pursuant to those chapters.

(5)To adopt regulations related to its functions and duties as specified in this chapter.

(6)To adopt regulations establishing fees in the reasonable amount necessary to recover costs incurred by the department relating to the enforcement of this chapter.

(b)The department has all powers necessary and proper to enable it to carry out fully and effectually its duties and responsibilities as specified in this chapter.

19732.

(a)The department shall make appropriate investigations as follows:

(1)To determine whether there has been any violation of this chapter or of any regulation adopted under this chapter.

(2)To determine any facts, conditions, practices, or matters that it may deem necessary or proper to aid in the enforcement of this chapter or of any regulation adopted under this chapter.

(3)To aid in adopting regulations.

(b)If, after any investigation pursuant to this chapter, the department is satisfied that a license, permit, authorization, or approval issued pursuant to this chapter, Chapter 4 (commencing with Section 19400), or Chapter 5 (commencing with Section 19800) should be suspended or revoked, it shall file an accusation in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.

(c)In addition to any action that it may take against a license, permit, finding of suitability, or approval, the department may also require the payment of fines or penalties. However, any fine imposed shall not exceed twenty thousand dollars ($20,000) for each separate violation of this chapter or of any regulation adopted under this chapter.

19733.

The department shall have the authority to regulate sports wagering to the same extent that the department currently regulates other legal gambling in this state, including the ability to audit the books and records of a licensed operator.

19734.

(a)This chapter shall become operative only if both of the following occur:

(1)The federal Professional and Amateur Sports Protection Act (28 U.S.C. Sec. 3701 et seq.) is amended or repealed to allow sports wagering in California.

(2)A state constitutional amendment to authorize sports wagering has been approved by the voters.

(b)This chapter shall become operative on the date that the Attorney General executes a declaration, which shall be retained by the Attorney General, stating that both of the events described in subdivision (a) have occurred.

(c)In addition to the requirements specified in subdivision (b), the Attorney General shall post the declaration on the department’s Internet Web site and the Attorney General shall send the declaration to the appropriate policy committees of the Legislature and to the Legislative Counsel.

SEC. 3.Section 336.9 of the Penal Code is amended to read:
336.9.

(a)Notwithstanding Section 337a, and except as provided in subdivision (b), any person who, not for gain, hire, or reward other than that at stake under conditions available to every participant, knowingly participates in any of the ways specified in paragraph (2), (3), (4), (5), or (6) of subdivision (a) of Section 337a in any bet, bets, wager, wagers, or betting pool or pools made between the person and any other person or group of persons who are not acting for gain, hire, or reward, other than that at stake under conditions available to every participant, upon the result of any lawful trial, or purported trial, or contest, or purported contest, of skill, speed, or power of endurance of person or animal, or between persons, animals, or mechanical apparatus, is guilty of an infraction, punishable by a fine not to exceed two hundred fifty dollars ($250).

(b)Subdivision (a) does not apply to any of the following situations:

(1)Any bet, bets, wager, wagers, or betting pool or pools made online.

(2)Betting pools with more than two thousand five hundred dollars ($2,500) at stake.

(3)Any sports wagering authorized pursuant to Chapter 4.6 (commencing with Section 19720) of Division 8 of the Business and Professions Code.

SEC. 4.Section 337a of the Penal Code is amended to read:
337a.

(a)Except as provided in Section 336.9, and as authorized pursuant to Chapter 4.6 (commencing with Section 19720) of Division 8 of the Business and Professions Code, every person who engages in one of the following offenses shall be punished for a first offense by imprisonment in a county jail for a period of not more than one year or in the state prison, or by a fine not to exceed five thousand dollars ($5,000), or by both imprisonment and fine:

(1)Pool selling or bookmaking, with or without writing, at any time or place.

(2)Whether for gain, hire, reward, or gratuitously, or otherwise, keeps or occupies, for any period of time whatsoever, any room, shed, tenement, tent, booth, building, float, vessel, place, stand or enclosure, of any kind, or any part thereof, with a book or books, paper or papers, apparatus, device or paraphernalia, for the purpose of recording or registering any bet or bets, any purported bet or bets, wager or wagers, any purported wager or wagers, selling pools, or purported pools, upon the result, or purported result, of any trial, purported trial, contest, or purported contest, of skill, speed, or power of endurance of person or animal, or between persons, animals, or mechanical apparatus, or upon the result, or purported result, of any lot, chance, casualty, or unknown or contingent event whatsoever.

(3)Whether for gain, hire, reward, or gratuitously, or otherwise, receives, holds, or forwards, or purports or pretends to receive, hold, or forward, in any manner whatsoever, any money, thing or consideration of value, or the equivalent or memorandum thereof, staked, pledged, bet or wagered, or to be staked, pledged, bet or wagered, or offered for the purpose of being staked, pledged, bet or wagered, upon the result, or purported result, of any trial, or purported trial, or contest, or purported contest, of skill, speed, or power of endurance of person or animal, or between persons, animals, or mechanical apparatus, or upon the result, or purported result, of any lot, chance, casualty, or unknown or contingent event whatsoever.

(4)Whether for gain, hire, reward, or gratuitously, or otherwise, at any time or place, records, or registers any bet or bets, wager or wagers, upon the result, or purported result, of any trial, or purported trial, or contest, or purported contest, of skill, speed, or power of endurance of person or animal, or between persons, animals, or mechanical apparatus, or upon the result, or purported result, of any lot, chance, casualty, or unknown or contingent event whatsoever.

(5)Being the owner, lessee or occupant of any room, shed, tenement, tent, booth, building, float, vessel, place, stand, enclosure or grounds, or any part thereof, whether for gain, hire, reward, or gratuitously, or otherwise, permits that space to be used or occupied for any purpose, or in any manner prohibited by paragraph (1), (2), (3), or (4).

(6)Lays, makes, offers or accepts any bet or bets, or wager or wagers, upon the result, or purported result, of any trial, or purported trial, or contest, or purported contest, of skill, speed or power of endurance of person or animal, or between persons, animals, or mechanical apparatus.

(b)In any accusatory pleading charging a violation of this section, if the defendant has been once previously convicted of a violation of any subdivision of this section, the previous conviction shall be charged in the accusatory pleading, and, if the previous conviction is found to be true by the jury, upon a jury trial, or by the court, upon a court trial, or is admitted by the defendant, the defendant shall, if he or she is not imprisoned in the state prison, be imprisoned in the county jail for a period of not more than one year and pay a fine of not less than one thousand dollars ($1,000) and not to exceed ten thousand dollars ($10,000). Nothing in this paragraph shall prohibit a court from placing a person subject to this subdivision on probation. However, that person shall be required to pay a fine of not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000) or be imprisoned in the county jail for a period of not more than one year, as a condition thereof. In no event does the court have the power to absolve a person convicted pursuant to this subdivision from either being imprisoned or from paying a fine of not less than one thousand dollars ($1,000) and not more than ten thousand dollars ($10,000).

(c)In any accusatory pleading charging a violation of this section, if the defendant has been previously convicted two or more times of a violation of any subdivision of this section, each previous conviction shall be charged in the accusatory pleadings. If two or more of the previous convictions are found to be true by the jury, upon a jury trial, or by the court, upon a court trial, or are admitted by the defendant, the defendant shall, if he or she is not imprisoned in the state prison, be imprisoned in a county jail for a period of not more than one year or pay a fine of not less than one thousand dollars ($1,000) nor more than fifteen thousand dollars ($15,000), or be punished by both imprisonment and fine. Nothing in this paragraph shall prohibit a court from placing a person subject to this subdivision on probation. However, that person shall be required to pay a fine of not less than one thousand dollars ($1,000) nor more than fifteen thousand dollars ($15,000), or be imprisoned in a county jail for a period of not more than one year as a condition thereof. In no event does the court have the power to absolve a person convicted and subject to this subdivision from either being imprisoned or from paying a fine of not more than fifteen thousand dollars ($15,000).

(d)Except where the existence of a previous conviction of any subdivision of this section was not admitted or not found to be true pursuant to this section, or the court finds that a prior conviction was invalid, the court shall not strike or dismiss any prior convictions alleged in the information or indictment.

(e)This section applies not only to persons who commit any of the acts designated in paragraphs (1) to (6), inclusive, of subdivision (a), as a business or occupation, but also applies to every person who in a single instance engages in any one of the acts specified in paragraphs (1) to (6), inclusive, of subdivision (a).

SEC. 5.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.