California legislation increasing the takeout rate for exotic wagers beginning this winter and making the state the first in the nation to approve exchange betting was signed by Gov. Arnold Schwarzenegger Sept. 23.
Keith Brackpool, chairman of the California Horse Racing Board, made the announcement during the board's Sept. 23 meeting at Fairplex Park. Brackpool said a formal statement on the signing would be made by Schwarzenegger Sept. 24.
The bill, sponsored by Democratic Sen. Ron Calderon, cleared the state legislature Aug. 31 and was sent to the governor Sept. 8.
The measure authorizes the CHRB to redirect funds from winning bets to overnight purses with a 2%-3% increase in the pari-mutuel takeout rate to help pump up the flagging Thoroughbred racing industry. According to a state Assembly analysis, the change could mean up to $70 million in additional purses, though racing officials estimate the figure at closer to $30 million.
It is to take effect Dec. 26, opening day of the Santa Anita Park winter season.
Races involving two betting interests (such as an exacta or double) would be subject to a 2% increase to 22.68%. A 3% hike would be tacked onto exotic wagers involving three or more wagering interests (trifecta, superfecta, pick three, pick four, pick six, etc.), bringing the deduction for those types of wagers to 23.68%.
Everyone making such wagers on California races, whether inside the state or out, would be affected. The legislation mandates that the full amount of the new deduction be applied to overnight purses.
Takeout rates for win, place, and show betting will remain unchanged at 15.43%.
The comprehensive measure also authorizes the launching of exchange, or head-to-head, wagering in the state. The implementation of exchange wagering, which was supported by Betfair, the British online wagering company that owns TVG, could not occur before May 2012 and requires CHRB approval.
The law also contains provisions to use some of the takeout increase to promote the Breeders' Cup financially in years when the event is held in California.