California Shelves Takeout Hike; Boost Tied to Workers' Comp

California racing officials have shelved plans to seek an increase in the percentage of money taken out of their betting pools to help defray increasing worker' compensation costs.

Instead, they plan to draft legislation that would enable the tracks to divert part of two existing funds designed for other purposes--vanning/stabling and marketing--into a workers' comp payment subsidy plan.

"We've given up on the idea of raising the takeout, even though it would still have given us the second-lowest takeout rate in the nation," said Jack Liebau, director of racing operations at Santa Anita Park, Golden Gate Fields, and Bay Meadows Race Course for Magna Entertainment. "Because of the strong reaction there has been to it, we have abandoned it."

Racing industry leaders had been considering an increase of up to one-half of a percentage point in the state's takeout rate.

The new plan, which requires legislative approval, would raise $5-million to help trainers meet heavy state-mandated workers' comp insurance demands, Liebau said.

"It's hard to get the legislature to hear us right now," he said. "They've got their attention on their own budget problems."

Liebau said the tracks and the California Thoroughbred Trainers Association continue their efforts to attract a private insurance carrier to the cause. Currently, most of the state's trainers are insured by the California State Fund, which provides the sort of high-risk coverage needed by the racing industry but which is much more expensive than private company premiums. Concerns that further increases in spiraling insurance rates could drive trainers out of the state and create a crisis for California racing prompted a series of meetings and high-level discussions over the past three months.