There is actually a "law" written or not I don't know, but bucking horses and bulls are only used for I think it was like a total of 3 weeks out of the year, and not all at the same time obviously and the rest of the time they live out on a nice big green pasture. I worked a few rodeos in my town, and I actually know of a couple of people who bought ex bronc horses, and say that they are the best horses they've worked with. They know their job, and they do it dang well, otherwise they'd be sold, but I too have seen some that run happy circles around the arena until the gate is opened, and many actually walk or trot through instead of canter or gallop. I can understand the history behind rodeos, and that most everything in a rodeo besides bull riding, and barrel racing were things that cowboys had/have to do on the range. The animals are treated quite well, and unfortunately a few bad people have given rodeos in general a bad name. I wouldn't necessarily raise bronco's myself, but just like any other horse out there, they are bred and used for a specific job, it just happens to be a slightly different one than trail riding.
Where I worked a couple of rodeos, they actually brought the stock in at night two evenings before so that the animals weren't being hauled in the heat of the day, and during the day (the rodeo events were held in the evening), they would actually let the horses and steers out in groups into the big arena so they could get a bit of exercise and weren't stuck in their pens the entire time they were there. Even some of the bulls were actually "nice". They would come up to the fence and let you pet their noses, I wouldn't ever go in with them, but they weren't wild crazed abused animals.