2005 California Business and Professions Code Sections 19590-19604 Article 9. Wagering

19590.  The board shall adopt rules governing, permitting, and
regulating parimutuel wagering on horse races under the system known
as the parimutuel method of wagering. Parimutuel wagering shall be
conducted only by a person or persons licensed under this chapter to
conduct a horse racing meeting, and only within the enclosure and on
the dates for which horse racing has been authorized by the board.
Wagering instructions concerning funds held in an advance deposit
wagering account shall be deemed to be issued within the licensee's
enclosure.
   This section shall remain in effect only until January 1, 2008,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2008, deletes or extends that date.
19590.  The board shall adopt rules governing, permitting, and
regulating wagering on horse races under the system known as the
parimutuel method of wagering.  Such wagering shall be conducted only
by a person licensed under this chapter to conduct a horse racing
meeting, and only within the enclosure and on the dates for which
horse racing has been authorized by the board.  This section shall
become operative on January 1, 2008.
19591.  Any licensee conducting a horse racing meeting shall provide
a place or places within the meeting grounds or inclosure where the
licensee may conduct, operate, and supervise the parimutuel method of
wagering in accordance with this chapter.
19592.  The parimutuel system of wagering shall be operated only by
a totalizator or other equipment approved by the board.  The board
shall not require any particular make of equipment.  The
communications system, technology, and method used to accept wagers
and transmit odds, results, and other data related to wagering shall
be approved by the board.
19592.5.  In order to facilitate the intrastate transmission of
racing programs, the board shall adopt regulations that provide for
the compatibility of parimutuel totalizator systems within the state,
including uniform procedures for the placing and cashing of
parimutuel wagers.
19593.  No method of betting, pool making, or wagering other than by
the parimutuel method shall be permitted or used by any person
licensed under this chapter to conduct a horse racing meeting.
19594.  Any person within the inclosure where a horse racing meeting
is authorized may wager on the result of a horse race held at that
meeting by contributing his money to the parimutuel pool operated by
the licensee under this chapter.  Such wagering is not unlawful, any
other law of the State of California to the contrary notwithstanding.
19595.  Any form of wagering or betting on the result of a horse
race other than that permitted by this chapter is illegal.  Also
illegal is any wagering or betting on horse races outside an
enclosure where the conduct of horse racing is licensed by the board.
  Wagering instructions concerning funds held in an advance deposit
wagering account shall be deemed to be issued within the licensee's
enclosure.
   This section shall remain in effect only until January 1, 2008,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2008, deletes or extends that date.
19595.  Any form of wagering or betting on the result of a horse
race other than that permitted by this chapter is illegal.  Also
illegal is any wagering or betting on horse races outside an
enclosure where the conduct of horse racing is licensed by the board.
   This section shall become operative on January 1, 2008.
19596.  (a) Notwithstanding any other provision of law, the board
may do any of the following:
   (1) 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 other association conducts the Breeder's Crown Stakes,
the Meadowlands Pace, the Hambletonian, or the North American Cup.
   (2) Authorize 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, if the races are conducted on the
same day as the American Quarter Horse Racing Challenge.
   (3) Authorize the inclusion of wagers authorized pursuant to this
section in the parimutuel pools of the out-of-state association that
conducts the races on which the wagers are placed.
   (b) The board authorization may be granted under this section only
if both of the following conditions are met:
   (1) The authorization complies with federal laws, including, but
not limited to, Chapter 57 (commencing with Section 3001) of Title 15
of the United States Code.
   (2) Wagering is offered only within the racing enclosure and only
within seven days of the running of the out-of-state race.
19596.1.  (a) Notwithstanding any other provision of law, the board
may 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 board'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, including, but
not limited to, Chapter 57 (commencing with Section 3001) of Title 15
of the United States Code.
   (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 six races on those days during a racing meeting
when live races are being run, except as provided in subdivision
(b).
   (4) If only one breed of horse specified in this section is being
raced on a given day, then the association conducting the live racing
may import those races which would otherwise be simulcast by the
association which is not racing, provided that the total number of
harness or quarter horse races imported in a calendar year does not
exceed the number of night races imported in 1998 after 5:30 p.m.
After the usual deductions, including the portion for the racing
association, the portion remaining for purses from these races shall
be distributed equally for purses for harness horsemen and quarter
horse horsemen.
   (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.
   (b) An association that is authorized to import races pursuant to
subdivision (a) may, at its sole discretion, import fewer than the
maximum number of harness or quarter horse races authorized in
paragraph (3) of subdivision (a).  For up to two races per night, for
each race that is not imported under the maximum authorized by
paragraph (3) of subdivision (a) on a particular night of racing, the
association may add a race to the number of races allowable under
the maximum authorization on another night of racing.  However, no
more than two races may be added under this subdivision to the number
allowable on a single night, and the total number of imported races
over a calendar year may not exceed the total number of imported
races authorized pursuant to paragraphs (3) and (4) of subdivision
(a).
19596.2.  (a) Notwithstanding any other provision of 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 participating in
the race meeting and without regard to the amount of purses,
provided that the total number of thoroughbred races on which wagers
are accepted statewide in any given year does not exceed the total
number of thoroughbred races on which wagers were accepted in 1998.
Further, the total number of thoroughbred races imported by
associations or fairs on a statewide basis under this section shall
not exceed 23 per day on days when live thoroughbred or fair racing
is being conducted in the state.  The limitation of 23 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 Breeders' Cup, 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.
19596.3.  Notwithstanding any other provision of law, a thoroughbred
racing association or fair may distribute the audiovisual signal and
accept wagers on the results of out-of-country thoroughbred races
during the calendar period the association or fair is conducting a
race meeting, without the consent of the organization that represents
horsemen participating in the race meeting.  Out-of-country races
shall be imported under the following conditions:
   (a) A thoroughbred association or fair shall conduct the wagering
in accordance with the applicable provisions of Sections 19601,
19616, 19616.1, and 19616.2.
   (b) The total number of out-of-country thoroughbred races on which
wagers are allowed to be accepted statewide in any given year shall
not exceed the total number of out-of-country thoroughbred races on
which wagers were accepted in 1998.
   (c) No thoroughbred association or fair may accept wagers pursuant
to this section on out-of-country races commencing after 5:30 p.m.,
Pacific standard time, without the consent of the harness or quarter
horse racing association that is then conducting a live racing
meeting.
   (d) A thoroughbred racing association or fair distributing the
audiovisual signal and accepting wagers on the results of
out-of-country races pursuant to this section may execute an
agreement with an association that conducts thoroughbred races in the
southern zone to allow that association to distribute the signal and
accept wagers on the results of out-of-country thoroughbred races,
except that the license fees paid to the state shall be double the
amount paid by a quarter horse racing association specified in
subdivision (b) of Section 19605.7.
19596.4.  (a) Notwithstanding subdivision (a) of, and subject to the
conditions specified in subdivisions (c) and (d) of, Section
19596.2, if the total number of thoroughbred and fair racing days
allocated by the board in the northern zone in any calendar year
commencing with the calendar year 2001 is less than the total number
of thoroughbred and fair racing days allocated by the board in
calendar year 2000, a thoroughbred racing association or fair that
has been allocated fewer racing days in the northern zone may
distribute the audiovisual signal and accept wagers on the results of
out-of-state and out-of-country thoroughbred races during the
calendar period the association or fair is licensed to conduct a live
race meeting, excluding Saturdays and Sundays.
   (b) The total number of out-of-state and out-of-country
thoroughbred races upon which wagers may be accepted pursuant to this
section shall be sufficient to the extent reasonably possible to
prevent any loss of revenue to the General Fund and the California
racing participants, as determined by the executive director of the
board but shall not exceed a maximum of three out-of-state or
out-of-country thoroughbred races for every live race that has been
eliminated by the board.  A thoroughbred racing association in the
northern zone shall not import these races on a day when a fair is
conducting live racing in the northern zone.
19597.  Notwithstanding any other provision of this chapter, a
person licensed under this chapter to conduct a horse racing meeting
shall, as to any payment made to a person who has wagered by
contributing to a parimutuel pool operated by such licensee, also
deduct the applicable breakage, as defined by Section 19405.
19598.  Any person claiming to be entitled to any part of a
redistribution from a parimutuel pool operated by a licensee under
this chapter, who fails to claim the money due the person prior to
the completion of the horse racing meeting at which the pool was
formed, may file a claim with the association issuing the person's
ticket prior to May 15 of the year immediately following the close of
the horse racing meeting.
   The funds that were unclaimed within the period specified under
this section are designated as "unclaimed tickets" and shall be
distributed in accordance with this chapter.
19599.  An association or fair may offer any form of parimutuel
wagering, as defined by regulations adopted by the board, or as
defined by Chapter 9, Pari-Mutuel Wagering, Uniform Rules of Racing,
as published by the Association of Racing Commissioners
International.  The board may prohibit any form of parimutuel
wagering if it determines that the proposed wagering would compromise
the honesty and integrity of racing in the state.  Each racing
association or fair shall include the types of conventional exotic
and other wagering it proposes to offer on its application to conduct
a horse racing meeting.
19601.  (a) Notwithstanding any other provision of law, a licensed
association or fair that is conducting a live meeting in any racing
zone may accept wagers on any race conducted in this state, if all of
the following requirements are met:
   (1) The association or fair that conducts the racing meeting and
the organization that is responsible for negotiating purse agreements
on behalf of the horsemen participating in that racing meeting
consent to the acceptance of the wagers.  However, if consent is
withheld, any party may appeal the withholding of consent to the
board, which may determine that consent is not required.
   (2) The association or fair conducts not less than eight races on
days when the association or fair is licensed to conduct racing,
except that fewer than eight live races per day may be conducted by
the mutual agreement of the association or fair and the organization
that is responsible for negotiating purse agreements on behalf of the
horsemen participating in the racing meeting.
   (3) Wagering is offered only within the association's or fair's
racing inclosure or within the satellite wagering facility and only
within seven days of the commencement of the racing program with the
transmitted race.
   (4) All wagers are included in the appropriate parimutuel pool at
the racetrack of the association or fair where the race is conducted,
or, in the appropriate parimutuel pool of the racetrack of the
association or fair that accepts the transmitted race.
   (5) The association or fair accepting wagers on an out-of-zone
transmitted race distributes the audiovisual signal of the race to,
and accepts wagers from, all eligible satellite wagering facilities.
   (b) Any association or fair accepting wagers under subdivision (a)
shall deduct, from the total amount handled in each conventional and
exotic parimutuel pool on the transmitted race, the same percentages
deducted pursuant to Article 9.5 (commencing with Section 19610) for
races at its own meeting.  However, if the wagers are from a quarter
horse race meeting, then the amounts deducted shall be the same as
for a quarter horse race meeting.  Amounts deducted under this
section, including amounts deducted from wagers on out-of-zone races
within the inclosure of the association or fair, shall be distributed
as provided under Sections 19605.7, 19605.72, and 19605.73 with
respect to wagers made within the northern zone, or Sections
19605.71, 19605.72, and 19605.73 with respect to wagers made within
the central or southern zone, except that amounts distributed for
purposes other than state license fees and fees payable to the Center
for Equine Health, School of Veterinary Medicine, University of
California at Davis, and the California Animal Health and Food Safety
Laboratory shall be proportionally reduced by the amount of any fees
paid to the Triple Crown or Breeder's Cup day host association
pursuant to subdivision (c).  The method used to calculate the
reduction in proportionate share shall be approved by the board.  For
wagers on out-of-state and out-of-country races made within the
association's or fair's inclosure, 1 percent shall be distributed to
the association or fair as a satellite wagering facility commission.
   (c) Nothing in this section precludes an association or fair from
charging a fee as a condition of transmitting the Triple Crown or
Breeder's Cup day races, except that any fee shall be allocated among
all associations, fairs, and satellite wagering facilities receiving
the transmitted race in proportion to the amount wagered at each
location, and the fee shall equal that charged by the entity
conducting the race or races.  Further, the only fee that can be
charged as a condition of transmitting the signal of an out-of-zone
race shall be a fee of 2.5 percent on Breeder's Cup day races.
   (d) All breakage and unclaimed tickets, including unclaimed
refunds, shall be distributed equally between the association or fair
that accepts wagers on the transmitted race, and the horsemen, in
the form of purses.  The purse moneys generated by this subdivision
shall be made available for purses during the meeting in which they
are received by the association or fair, or, if the association or
fair is not then conducting a live racing meeting, during the next
succeeding meeting of the association or fair.
   (e) All wagers made pursuant to this section shall be considered
to have been wagered at a satellite wagering facility and shall be
excluded from total handle for the purposes of Section 19611.
   (f) Notwithstanding Section 19530.5, satellite wagering facilities
operated by a fair, in the Counties of Fresno, Kern, or Tulare shall
be considered northern zone facilities and shall receive their
audiovisual signal from the association or fair conducting a racing
meeting in the northern zone that is authorized to distribute the
signal and accept wagers on central and southern zone races.
Satellite wagering facilities operated by a fair, in the Counties of
Santa Barbara or Ventura shall be considered central-southern zone
facilities and shall receive the audiovisual signal from the
association or fair conducting a racing meeting in the central or
southern zone that is authorized to distribute the signal and accept
wagers on northern zone races.
   (g) All purse moneys derived from wagering on out-of-zone races at
fair racing meetings shall be distributed to all breeds of horses
participating in the fair meeting in direct proportion to the purse
money generated by breed on live races conducted during the fair race
meeting.
   (h) During calendar periods when both a fair and a thoroughbred
association conduct live racing, the amounts deducted under this
section shall be distributed on any day of overlap as provided in
Section 19607.5, except that the applicable state license fee shall
be at the rate specified for nonfair meetings in subdivision (b) of
Section 19605.7.
   (i) During calendar periods when a thoroughbred association and a
fair, or a thoroughbred association and any other breed association
are conducting a racing meeting in the same zone, the thoroughbred
association shall be the association authorized to distribute
out-of-zone, out-of-state, or out-of-country thoroughbred or fair
races, except that the thoroughbred association may waive this right
and allow the other breed racing association conducting a race
meeting to distribute the signal and accept wagers on out-of-zone,
out-of-state, or out-of-country thoroughbred or fair races for any
racing day or days.  For the purposes of this subdivision, the
combined central and southern zone shall be considered one zone.
   (j) In order to ensure, to the extent possible, that out-of-state
and out-of-country simulcasting, furthers the purposes of this
section, a committee made up of one representative from each of the
then-operating thoroughbred associations or fairs that are conducting
a live racing meeting in the state and one representative of the
organization responsible for negotiating purse agreements on behalf
of the horsemen participating in the meeting shall do the following:
   (1) Determine the out-of-state or out-of-country thoroughbred
races to be imported on a statewide basis pursuant to provisions of
this chapter.
   (2) Ensure, to the extent possible, that the fees charged by
out-of-state or out-of-country entities for these signals are at the
lowest obtainable rate and at the same rate statewide, in order to
maximize the revenue available to in-state associations and fairs and
their horsemen.
   (3) Ensure, to the extent possible, due to the reciprocal nature
of the interstate simulcasting business, that the maximum obtainable
revenue is generated by the sale to out-of-state entities of the
audiovisual signal of races conducted in this state by thoroughbred
associations and fairs.
   (4) Ensure that program information requirements for in-state
signals comply with the standards of the board, but provide that
abbreviated program formats may be used for races imported from other
jurisdictions.
   (k) Notwithstanding any other provision of law, any thoroughbred
association or fair, when operating a live racing meeting, shall
distribute the signal of all races conducted by, or disseminated by,
that association or fair to, and accept wagers on these races from,
any association that is licensed to conduct a live quarter horse or
harness racing meeting in Orange County and that conducted such a
meeting in 1998.
   (l) Notwithstanding any other provision of law, all associations
or fairs when operating as eligible satellite wagering facilities
shall be in compliance with, and subject to the provisions of,
Article 9.2 (commencing with Section 19605) of this chapter, and
shall display the signal and accept wagers on all live races
conducted in this state without regard to breed.  Notwithstanding the
foregoing provision, a thoroughbred racing association located in
the city of Arcadia is exempt from these requirements for live
harness and quarter horse races conducted at night unless the
thoroughbred racing association facility is open for business at that
time and is accepting wagers on other night signals pursuant to this
chapter.  Further, satellite wagering facilities located at fairs
may, but are not required to, accept an audiovisual signal on
out-of-state or out-of-country races unless the facility is open for
business at the time and accepting wagers on other signals pursuant
to this chapter.
19601.2.  (a) During calendar periods when the San Mateo County
Fair, or other fair or thoroughbred association, and the Humboldt
County Fair simultaneously conduct race meetings, the San Mateo
County Fair, or other fair or thoroughbred association, shall be the
association authorized to distribute the signal and accept wagers on
out-of-zone, out-of-state, and out-of-country races if it complies
with the conditions specified in subdivision (a) of Section 19601.
The amounts deducted from these wagers shall be distributed as
provided in Section 19601, and license fees on races conducted by the
Humboldt County Fair and on out-of-zone, out-of-state, or
out-of-country races shall be as specified in subdivision (h) of
Section 19601.  Additionally, from, and to the extent of, license
fees generated from the total handle of the San Mateo County Fair, or
other fair or thoroughbred association, during the overlap, the San
Mateo County Fair, or other fair or thoroughbred association, shall
distribute to the Humboldt County Fair, not less than seven days
after the close of the racing meeting, an amount equal to 0.75
percent of the out-of-zone, out-of-state, and out-of-country handle.
From the amount remaining, if any, 50 percent shall be retained by
the San Mateo County Fair to be distributed equally as commissions
and purses, and 50 percent shall be paid to the state as a license
fee.
   (b) During calendar periods when the Fresno District Fair and any
thoroughbred association in the northern zone both conduct race
meetings, the thoroughbred association shall be the association
authorized to distribute the signal and accept wagers on out-of-zone,
out-of-state, and out-of-country races, if it complies with the
conditions specified in subdivision (a) of Section 19601.  The
amounts deducted from these wagers shall be distributed as provided
in Section 19601, and license fees on races conducted by the Fresno
District Fair and on out-of-zone, out-of-state, or out-of-country
races shall be as specified in subdivision (h) of Section 19601.
Additionally, from, and to the extent of, license fees generated from
the total handle of the thoroughbred association during the overlap,
the thoroughbred association shall distribute to the Fresno District
Fair, not less than seven days after the close of the racing
meeting, an amount equal to 0.75 percent of the out-of-zone,
out-of-state, and out-of-country handle.  From the amount remaining,
if any, 50 percent shall be retained by the thoroughbred association
to be distributed equally as commissions and purses, and 50 percent
shall be paid to the state as a license fee.
19602.  (a) Notwithstanding any other provision of law, any racing
association located in this state may authorize betting systems
located outside of this state to accept wagers on a race or races
conducted or disseminated by that association and may transmit live
audiovisual signals of the race or races and their results to those
betting systems, except that any authorization is subject to the
consent of the host association and applicable federal laws,
including, but not limited to, Chapter 57 (commencing with Section
3001) of Title 15 of the United States Code.
   (b) (1) Except as provided in paragraph (2), any racing
association described in subdivision (a), when it authorizes betting
systems located outside of this state to accept wagers on a race,
shall pay a license fee to the state in an amount equal to 8 percent
of the total amount received by the association from the out-of-state
betting system. In addition, with respect to thoroughbred racing
only, 3 percent of the amount remaining after the payment of the
license fee shall be deposited with the official registering agency
pursuant to subdivision (a) of Section 19617.2, and shall thereafter
be distributed in accordance with subdivisions (b), (c), and (d) of
Section 19617.2. The remaining amount received by the association
shall be distributed to the association that conducts the racing
meeting and to horsemen participating in that racing meeting as
follows: 50 percent to the association as commissions, and 50 percent
to the horsemen as purses. All rents, costs, and fees shall be
deducted pursuant to a contract between the association that conducts
the racing meeting and the horsemen participating in the racing
meeting. Notwithstanding any other provision of law, racing
associations may form a partnership, joint venture, or any other
affiliation in order to negotiate terms and conditions of agreements
with out-of-state betting systems.
   (2) A thoroughbred association that hosts the series of races
known as the "Breeder's Cup" shall not be required to pay to the
state the license fees required pursuant to paragraph (1). Amounts
received by the association from out-of-state betting systems as
wagers on Breeder's Cup races shall be distributed as follows: 50
percent as commissions to the association that conducts the racing
meeting, and 50 percent as purses to the horsemen participating in
the meeting.
   (c) With the permission of the board, wagers accepted by betting
systems located outside of this state may be, but are not required to
be, included in the parimutuel pool of the association that conducts
the racing meeting in this state. If the wagers accepted by betting
systems located outside of this state are included in the parimutuel
pool of the association that conducts the racing meeting in this
state, the betting system located outside of this state shall, if
permissible under applicable law, deduct from the total amount
handled in each conventional and exotic parimutuel pool the same
total percentages deducted pursuant to Article 9.5 (commencing with
Section 19610) by the association that conducts the racing meeting in
this state. If the laws of the jurisdiction in which the betting
system is located do not permit the betting system to deduct the same
percentages as are deducted by the association that conducts the
racing meeting, the board may, nonetheless, permit the inclusion of
those out-of-state wagers in the association's parimutuel pool if the
board determines it to be in the public interest of this state to do
so.
   (d) If wagers accepted by an association conducting a racing
meeting within the state and wagers accepted by a betting system
located outside of the state are combined in one parimutuel pool and
the association and the betting system both deduct the same total
percentages as set forth in subdivision (c), the breakage shall be
allocated between the association and the betting system on the basis
of a calculation for distribution approved by the board.
   (e) If wagers accepted by an association conducting a racing
meeting within the state are combined in one parimutuel pool with
wagers accepted by a betting system located outside the state and the
association and the betting system deduct different percentages from
the amount handled in the parimutuel pool, the precise calculation
and distribution of payments on winning tickets and breakage between
the association and the betting system shall be on the basis of a
calculation for distribution approved by the board.
   (f) Breakage allocated pursuant to this section to an association
conducting a racing meeting within this state shall be distributed in
the same manner as would be breakage arising from wagers at the
association in the absence of a combined parimutuel pool. This
section does not apply to the disposition of breakage allocated to
the betting system located outside of the state.
   (g) If wagers accepted by a betting system located outside of this
state are included in the parimutuel pool of an association
conducting a racing meeting in this state, funds in the parimutuel
pool attributable to unclaimed tickets relating to wagers accepted by
the association conducting a racing meeting within the state shall
be distributed in the same manner as unclaimed tickets relating to
wagers accepted by that association in the absence of a combined
parimutuel pool. Funds in the parimutuel pool attributable to
unclaimed tickets related to wagers accepted by the betting system
located outside of this state shall be allocated to that betting
system, and this section does not otherwise apply to the disposition
of those funds at that location outside of the state.
19603.  Notwithstanding any other provision of law, any racing
association in this state may, with the approval of the board, accept
out-of-state wagers on a race or races conducted by or disseminated
by that association and may transmit live audiovisual signals of the
race or races to locations out of state, except that any wagers made
pursuant to this section are subject to applicable federal laws.  The
amounts deducted and distributed pursuant to this section shall be
as provided in Section 19602 for all other out-of-state wagers.
19604.  Notwithstanding any other provision of law, in addition to
parimutuel wagering otherwise authorized by this chapter, advance
deposit wagering may be conducted upon approval of the board. The
board may authorize any racing association or fair, during the
calendar period it is licensed by the board to conduct a live racing
meeting in accordance with the provisions of Article 4 (commencing
with Section 19480), to accept advance deposit wagers or to allow
these wagers through a betting system or a multijurisdictional
wagering hub in accordance with the following:
   (a) Racing associations and racing fairs may form a partnership,
joint venture, or any other affiliation in order to further the
purposes of this section.
   (b) As used in this section, "advance deposit wagering" means a
form of parimutuel wagering in which a person residing within
California or outside of this state establishes an account with a
licensee, a board-approved betting system, or a board-approved
multijurisdictional wagering hub located within California or outside
of this state, and subsequently issues wagering instructions
concerning the funds in this account, thereby authorizing the entity
holding the account to place wagers on the account owner's behalf. An
advance deposit wager may be made only by the entity holding the
account pursuant to wagering instructions issued by the owner of the
funds communicated by telephone call or through other electronic
media. The licensee, a betting system, or a multijurisdictional
wagering hub shall ensure the identification of the account's owner
by utilizing methods and technologies approved by the board. Further,
at the request of the board, any licensee, betting system, or
multijurisdictional wagering hub located in California, and any
betting system or multijurisdictional wagering hub located outside of
this state that accepts wagering instructions concerning races
conducted in California or accepts wagering instructions from
California residents, shall provide a full accounting and
verification of the source of the wagers thereby made, including the
zone and breed, in the form of a daily download of parimutuel data to
a database designated by the board. Additionally, when the board
approves a licensee, a betting system, or a multijurisdictional
wagering hub, whether located within California or outside of this
state, to accept advance deposit wagering instructions on any race or
races from California residents, the licensee, betting system, or
multijurisdictional wagering hub may be compensated pursuant to a
contractual agreement with a California licensee, in an amount not to
exceed 6.5 percent of the amount handled on a race or races
conducted in California, and in the case of a race or races conducted
in another jurisdiction, may be compensated in an amount not to
exceed 6.5 percent, plus a fee to be paid to the host racing
association not to exceed 3.5 percent, of the amount handled on that
race or races. The amount remaining after the payment of winning
wagers and after payment of the contractual compensation and host
fee, if any, shall be distributed as a market access fee in
accordance with subdivision (g). As used in this section, "market
access fee" means the contractual fee paid by a betting system or
multijurisdictional wagering hub to the California licensee for
access to the California market for wagering purposes.  As used in
this section, "licensee" means any racing association or fair, or
affiliation thereof authorized in subdivision (a).
   (c) (1) The board shall develop and adopt rules to license and
regulate all phases of operation of advance deposit wagering for
licensees, betting systems, and multijurisdictional wagering hubs
located in California. Betting systems and multijurisdictional
wagering hubs located and operating in California shall be approved
by the board prior to establishing advance deposit wagering accounts
or accepting wagering instructions concerning those accounts and
shall enter into a written contractual agreement with the bona fide
labor organization that has historically represented the same or
similar classifications of employees at the nearest horse racing
meeting. 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, notwithstanding this requirement.
   (2) The board shall develop and adopt rules and regulations
requiring betting systems and multijurisdictional wagering hubs to
establish security access policies and safeguards, including, but not
limited to, the following:
   (A) The betting system or wagering hub shall utilize the services
of a board-approved independent third party to perform identity,
residence, and age verification services with respect to persons
establishing an advance deposit wagering account.
   (B) The betting system or wagering hub shall utilize personal
identification numbers (PINs) and other technologies to assure that
only the accountholder has access to the advance deposit wagering
account.
   (C) The betting system or wagering hub 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 personal and account identification
information.
   (D) The betting system or wagering hub shall allow the board
access to its premises to visit, investigate, 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.
   (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.
   (d) As used in this section, a "multijurisdictional wagering hub"
is 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.
   (e) As used in this section, a "betting system" is a business
conducted exclusively in this state that facilitates parimutuel
wagering on races it simulcasts and other races it offers in its
wagering menu.
   (f) In order for a licensee, betting system, or
multijurisdictional wagering hub to be approved by the board to
conduct advance deposit wagering, it shall meet both of the following
requirements:
   (1) All wagers thereby made shall be included in the appropriate
parimutuel pool of the host racing association or fair under a
contractual agreement with the applicable California licensee, in
accordance with the provisions of this chapter.
   (2) The amounts deducted from advance deposit wagers shall be in
accordance with the provisions of this chapter.
   (g) The amount received as a market access fee 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 Department of Industrial
Relations to cover costs associated with audits conducted pursuant to
Section 19526 and for the purposes of reimbursing the State
Mediation and Conciliation Service for costs incurred pursuant to
this bill. However, if that amount would exceed the costs of the
Department of Industrial Relations, the amount distributed to the
department 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, and an amount equal to 1 percent of
handle from all advance deposit wagers originating from within
California in excess of five hundred million dollars ($500,000,000)
annually, shall be distributed as satellite wagering commissions. 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. In the event
of 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. 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) With respect to wagers on each breed of racing that originate
in California for each racing meeting, after the payment of
contractual obligations to the licensee, the betting system, or the
multijurisdictional wagering hub, and the distribution of the amounts
set forth in paragraphs (1) through (4), inclusive, 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, and this 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. Purse funds generated pursuant to this section may be
utilized to pay 50 percent of the total costs and fees incurred due
to the implementation of advance deposit wagering. "Incentive awards"
shall be 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 shall be payable to the applicable official
registering agency and thereafter distributed as provided in this
chapter. If the provisions of Section 19601.2 apply, then the amount
distributed to the applicable racing associations or fairs from
advance deposit wagering 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. For purposes of this subdivision, the zones of the
state shall be as defined in Section 19530.5, except as modified by
the provisions of subdivision (f) of Section 19601, and the combined
central and southern zones shall be considered one zone.
   Notwithstanding any provision of this section to the contrary, the
distribution of the market access fee, other than the distributions
specified in paragraph (1) or (2), may be altered upon the approval
of the board, in accordance with an agreement signed by all parties
receiving a distribution under paragraphs (4) and (5).
   (h) Notwithstanding any provisions of this section to the
contrary, all funds derived from advance deposit wagering that
originate from California for each racing meeting on out-of-state and
out-of-country thoroughbred races conducted after 6 p.m., Pacific
time, shall be distributed in accordance with this subdivision. With
respect to these wagers, 50 percent of the amount remaining after the
payment of contractual obligations to the multijurisdictional
wagering hub, betting system, or licensee and the amounts set forth
in paragraphs (1) through (5), inclusive, of subdivision (g) shall be
distributed as commissions to thoroughbred associations and racing
fairs, as thoroughbred and fair purses, and as incentive awards in
accordance with subdivision (g), and the remaining 50 percent,
together with all funds derived for each racing meeting 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 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 instate, both on- and off-track, on each breed's own live
races in the previous year by that association, or it's 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 of the money received shall be distributed as
purses to the horsemen participating in its current or next scheduled
licensed racing meeting.
   (i) Notwithstanding any provisions of this section to the
contrary, all funds derived from advance deposit wagering which
originate from California for each racing meeting on out-of-state and
out-of-country nonthoroughbred races conducted before 6 p.m.,
Pacific time, shall be distributed in accordance with this
subdivision. With respect to these wagers, 50 percent of the amount
remaining after the payment of contractual obligations to the
multijurisdictional wagering hub, betting system, or licensee and the
amounts set forth in paragraphs (1) through (5), inclusive, of
subdivision (g) shall be distributed as commissions as provided in
subdivision (h) 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
subdivision (g).
   (j) A racing association, a fair, or a satellite wagering facility
may accept and facilitate the placement of any wager from a patron
at its facility that a California resident could make through a
betting system or multijurisdictional wagering hub duly offering
advance deposit wagering in this state, and the facility accepting
the wager shall receive a 2-percent commission on that wager in lieu
of any distribution for satellite commissions pursuant to subdivision
(g).
   (k) Any disputes concerning the interpretation or application of
this section shall be resolved by the board.
   This section shall remain in effect only until January 1, 2008,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2008, deletes or extends that date.