Bill Diverts Funds for Workers' Comp Insurance

by Jack Shinar

California horsemen and racetracks could create a workers' compensation insurance fund with purse money diverted from marketing programs as well as their vanning and stabling program under legislation headed for the state Senate.

The bill, which would not increase pari-mutuel takeout, cleared the California Senate Governmental Organization Committee June 25. It is seen as at least a temporary answer to the problem while officials seek a long-term solution.

Another round of workers' comp insurance rate increases from the California State Fund will hit about two-thirds of the state's trainers July 1. Ed Halpern, executive director of the California Thoroughbred Trainers, said the increase will amount to another 25% to 50% hike for individual barns whose current policies are set to expire. The previous base rate with the state fund was $43.30 per $100 of payroll.

"The workers' compensation situation is a disaster," said John Van de Kamp, president of the Thoroughbred Owners of California.

The industry has been unsuccessful in attracting private insurance-company interest to provide coverage, he said, while state fund rates continue to spiral. Halpern said many trainers are reducing their staff and the number of horses, plus cutting costs to a minimum, while others are simply trying to wait things out.

Resistance to an increase in takeout, the amount removed from betting handle before payouts, has led to the latest plan.

Purse money directed to the TOC and racetracks through their percentage of satellite wagering handle could be used to help defray workers' comp insurance costs under the bill sponsored by Assemblyman Jerome Horton. The bill would allow up to $4 million annually from the vanning and stabling fund, and up to one-sixth of the money earmarked for the California Marketing Program, not to exceed $1 million, to be directed to workers' compensation needs.

Last year's total allocation for the statewide marketing program was $6.5 million. Additionally, up to $1 million from the vanning and stabling fund could also be made available to the California Thoroughbred Horsemen's Foundation for medical, dental, and vision care benefits for backstretch workers and their families.

The legislation requires a written agreement between the TOC and the trainers, as well as racetrack associations and fairs that conduct 75% of the racing in the state, before a plan could be implemented.

Officials are discussing several options for how the fund would operate, but no decision has been reached, Van de Kamp said. If the amended measure passes the Senate, it would require assembly approval, according to the Assembly Governmental Organization office.