Learn About CARF
Satellite Wagering Background
The history of horseracing in California reflects a long standing association with Fairs. Early, organized racing began in Stockton and Sacramento in the late 1840's during the days of the Gold Rush. The racetrack in Pleasanton has operated continuously since 1856, at first in private hands, later as a Fair. The breeding and training of fine racehorses are aspects of the agricultural economy. Just as cattle are bred for meat and milk production, or sheep for wool production, racehorses are bred and trained for speed and stamina. It's natural that racing competition, along with other livestock competition, would be conducted at the local or regional agricultural expositions. Horseracing Law, in its opening chapter, Business and Professions Code, Article 1, Section 19401, states the legislative intent that parimutuel wagering on horse racing should support Fairs. The marriage of Fairs and horseracing has deep roots in California political history. Modern parimutuel wagering began in 1933 with the direct intention of generating revenue for the State, for Fairs (through Fairs & Expositions fund) and for the continued support of horseracing. In 1987, legislation carried by Senator Ken Maddy, SB14, expanded parimutuel wagering in California by creating a statewide satellite wagering network. Under the provisions of SB14 and subsequent legislation, Fairs and existing racetracks are the venues for off-track wagering. More recently, federal courts have ruled that certain Native American tribes may operate Satellite Wagering Facilities. Twenty-three Fairs and five racetracks are currently licensed to conduct satellite wagering.
Duties and Responsibilities of the Simulcast Organizations Back to Top
Satellite wagering operations fall into two categories:
- Operations Provided and Paid for by the Simulcast organization
- Operations provided and paid for by the Satellite Facility.
Duties and responsibilites of the simulcast organization are described below.
Duties and Responsibilities of the Simulcast OrganizationsThe simulcast organization provides and pays for audiovisual signal transmission and all parimutuel costs, including parimutuel employees on-site at satellite facilites. To cover these costs, it receives a small percentage of the off-track handle.
Parimutuel Personnel and Operations Back to Top
Parimutuel personnel handle operations directly related to processing wagers. These operations include having a clerk at each terminal, money room and supervisory staff, and administrative support at the Host Track. The Host Track Mutuels Manager assigns the clerks and supervisor at each site. The local supervisor is also the Money Room attendant and has responsibility for the cash bank on-site. All pari-mutuel clerks in California are union members and belong to the Pari-mutuel Clerks Guild Local 280 SEIU. The simulcast organization is also responsible for banking, armored service, currency counting machines, payroll, and audit.
Totalisator Back to Top
The Totalisator is a computerized data processing operation that tabulates wagering pools, issues bet tickets, and calculates pay-offs. The system extends from cash register-like terminals at each wagering location, through a high speed data communications system to a central data processing hub. All wagers are processed identically; a wager at any satellite location is tabulated into the same pools as wagers at the Host Track. Totalisator services include technical operations and maintenance personnel.
Data Processing Hub Back to Top
The wagering data processed by the totalisator computers is transmitted back and forth between the hub and satellite sites via specially dedicated telephone data lines. These special high-speed circuits run directly from each site to the central computer. The system must operate fast enough so that entry of a wager at the satellite site, relay of that wager to the central computer, tabulation, and issuance of the bet ticket hundreds of miles away takes less than one second.
Satellite Uplink; Encryption; Satelllite Transponder Back to Top
Four primary elements constitute the audiovisual transmission system. These are 1) satellite uplink, 2) encryption (scrambling), 3) satellite transponder time, and 4) satellite downlink and closed circuit television system. The satellite downlink and closed circuit television system are the responsibility of the Fair and will be discussed below. The other three elements are the responsibility of the simulcast organization. Here is a brief description of these services.
The satellite uplink is an earth transmitting station that beams a television signal from the Racetrack to a telecommunications satellite in orbit over the equator. The uplink sends a signal supplied by a television production facility at the track.
Encryption is the technical term for electronically scrambling a communications signal. The audiovisual television signal is scrambled to prevent recognizable reception by unauthorized users. A special code that authorizes decoders to reconstitute the signal into recognizable form is carried directly on the scrambled signal. Unlike most residential scrambling systems, this system can turn decoders on and off immediately.
The telecommunications satellite parked over the equator functions as a distant relay station. Signals beamed to it are amplified and retransmitted back to a wide coverage area on earth. Users rent or lease time on these satellites as needed. As satellite distribution of live racing has expanded, the horseracing industry has become a major purchaser of satellite time.
Duties and Responsibilites of the Satellite Facility Back to Top
Satellite wagering will probably become the Fair's most profitable interim event. The Fair must take care that planning for its implementation includes an assessment of its impact on all other Fair activities. The receiving site (Fair or Racetrack) provides and pays for audiovisual receiving
equipment, physical facilities, and all non-parimutuel personnel. The Fair Satellite Facility pays the cost of these operating expenses from its commission on parimutuel handle and from revenue generated by admissions, parking, concessions, and other miscellaneous sources. Careful planning with CARF and F&E must precede implementation. A more detailed description of these responsibilities follows.
Physical Facilities; Personnel Back to Top
The Fair provides and maintains the physical facilities for satellite wagering operations. This includes buildings, utilities, parking, safe ingress and egress, outdoor lighting, signage, and fencing. The Fair may charge for parking and for admission; typical prices are $1 or $2 for parking, and $2 or $3 for admission, perhaps with a higher admission for upgrade to an area of finer amenities. Important considerations in building preparation include ease of access, good HVAC and proper lighting. Outdoor lighting in the parking lot and over walkways to the Satellite Facility is important. Planning for parking and admissions money collection must include year-round weather conditions, crowd control, and security. Provisions must be made for two money counting rooms: one, controlled by the Fair, for cash receipts from parking, admissions, program sales, and miscellaneous sales; the other, controlled by the parimutuel department, for cash necessary to conduct wagering operations. The level of security for the Fair operations Money Room is the Fair's decision. The parimutuel Money Room must be secured by an alarm system that connects directly to a local law enforcement agency or to an alarm company with a 24-hour dispatcher. Security guards must be on duty at all times that wagering is conducted.
Satellite Receiving and Audiovisual Systems Back to Top
Statute stipulates that the Fair is responsible for provision of the satellite downlink and closed circuit TV system. CARF provides these systems at no initial cost to the Fair. The Fair, however, is expected to contribute to an equipment replacement fund based on equipment value and projected lifetime.
Emergency Medical Services Back to Top
First Aid and medical emergency services must be arranged with private services or local public emergency response teams.
Food and Beverage Service Back to Top
Food and drink concessions represent an important element of service provided to satellite patrons. Careful selection of an appropriate vendor should guide this decision. Fairs should consult with CARF to assure that the concessionaire meets standards expected by the CHRB.
Employees Back to Top
All personnel in the satellite wagering operation outside the Parimutuel Department are Fair employees. As noted above, the CHRB licenses all personnel. Facility Supervisory personnel must pass a test as part of their licensing requirements. Planning must include staff adequate to operate two shifts daily, day and night, six days a week. Job categories include the following:
- Facility Supervisor
- Assistant Supervisor
- Admissions seller
- Parking attendants
- Program seller
- Security Captain
- Security Guards
- Janitorial
- Unskilled Labor
Accounting and Record Keeping Back to Top
Operating expenses, with the exception of parimutuel operations, are the responsibility of the Fair. The Fair must keep careful records of its operating cost per performance, that is, separately, for day racing, for night racing, and by breed. Daytime racing (thoroughbred) is nearly always profitable. Occasionally the less popular night events will operate at a loss. When this is the case, the racing association must, by law, make up the difference. Statute specifies that a facility need not operate at a loss; hence the importance of accurate records. A Fair must accept all signals offered to it, even if it incurs operating losses, as long as the racing association pledges to make up any differences. This pledge is generally secured by a bond.