HOUSE BILL REPORT

SHB 984

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Baugher, Lewis, Appelwick, Patrick, Fisch, Rayburn, Vekich, C. Smith, Fisher, Sayan, Madsen, R. King and Doty)

Authorizing satellite extensions of licensed facilities for parimutuel wagering.

House Committe on Commerce & Labor

Majority Report:     The substitute be substituted therefor and the substitute bill do pass.  (10)

     Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisch, Fisher, R. King, O'Brien, Patrick, Sanders, Sayan and C. Smith.

House Staff:Joan Elgee (786-7166)

AS PASSED HOUSE MARCH 13, 1987

BACKGROUND:

Currently, persons holding licenses to conduct horse race meets may seek approval from the Horse Racing Commission to conduct the sale of parimutuel pools on in-state or out-of-state televised or simulcast races of national or regional interest.  Only sales within the enclosure of the licensee's race course and during the conduct of a race meet are authorized.

Parimutuel monies from horse racing are allocated by statute. Percentages of the daily gross receipts are designated for the state, the licensed race meets, and trade and agricultural fair funds.  The amounts not specifically designated by statute go to the betters at the race meets.  The state's share is .5 percent on daily gross receipts of $200,000 or less, 1.0 percent on receipts from $200,001 to $400,000 and 4.0 percent on receipts over $400,000.  For exotic races, which are those involving multiple wagers, the state receives an additional 2.5 percent on races with two selections and 3.5 percent on races with three or more selections.

The licensee's share is 14.5 percent on daily gross receipts of $200,000 or less, 14.0 percent on receipts from $200,000 to $400,000, and 11.0 percent on receipts over $400,000.  For exotic races, the licensee receives an additional 3.0 percent on races with two selections and 6.0 percent on races with three or more selections.

SUMMARY:

A racing association conducting a race meet under license may seek approval from the Horse Racing Commission to conduct parimutuel wagering on its program at satellite locations within the state.  Satellite sales are only authorized during the licensee's race meet and simultaneous to all wagering activity conducted at the licensee's facility.

Several restrictions are placed on the location of satellite facilities:  1) the commission may approve only one satellite in each county, but more than one licensee may use the facility; 2) a licensee may not conduct satellite wagering within 50 air miles of its racing facility; 3) a licensee conducting satellite wagering within 50 air miles of another racing facility which conducts meets of 30 days or more must use the facility of the other licensee for its satellite and may not conduct satellite wagering while the other facility is operating; and 4) a licensee may not conduct satellite wagering while another licensee which conducts meets of less than 30 days within 50 air miles is operating.  Also, the commission's authority to approve satellite wagering locations is subject to local zoning and other land use ordinances.

The state's share of the daily gross receipts from satellite wagers is .5 percent on a daily handle of $400,000 or less and 3.0 percent on a daily handle over $400,000.  On exotic races, the state receives an additional 1.0 percent on the satellite wagers.

The licensee's share of the daily gross receipts from satellite wagers is 14.5 percent on a daily handle of $400,000 or less and 12.0 percent on a daily handle over $400,000.  On exotic races, the licensee receives an additional 4.5 percent on races with two selections and 3.5 percent on races with three or more selections.

EFFECT OF SENATE AMENDMENT(S):  The Horse Racing Commission may collect an annual fee from a licensee for each satellite location to meet the commission's costs.  Amounts which the commission receives as its share of the satellite revenues shall be credited towards the fee.

The satellite wagering provisions are subject to sunset review, and shall expire in 1991 unless extended.

Language is added that amounts wagered at the licensee's racing facility and satellite shall be combined for determining the amount of the handle, which then determines the respective amounts to be distributed to the licensee and the state.

Fiscal Note:    Requested February 26, 1987.

House Committee ‑ Testified For:     Jim Penney and Hugo Toschi, Horseman's Benevolent and Protective Association; Ralph Vacca, Washington Thoroughbred Breeders Association; Bill Jones, Clark County Fair; Marlyta Deck, Washington State Fair Association.

House Committee - Testified Against: Bob Dellinger and Doug Neyhart, Washington State Standardbred Association.

House Committee - Testimony For:     The state and tracks have been losing money because the handles have been dropping.  This bill will bring in additional money and help the industry, the county fairs, and the state.

House Committee - Testimony Against: Satellite wagering will hurt betters and local entities will not benefit.  The bill needs more work.