Ray Paulick<br>Editor in Chief

Ray Paulick
Editor in Chief

The Cost of Reform

When the Los Angeles Times turned its attention to living and working conditions at California racetracks in a series of articles that began in May of this year, most people in the Thoroughbred industry surely didn't believe the newspaper was doing them any favors. But that could turn out to be the case.

Forgetting the plight of backstretch workers for a minute (as if they haven't been forgotten before), the investigative pieces in the nation's third-largest newspaper inadvertently may have helped the racing industry get the account wagering legislation it needs to stay competitive with racing states like New York, Kentucky, and Pennsylvania. Without the focus on the backstretch, there would have been no legislation aimed at improving housing or giving unions a chance to organize in racetrack stable areas. Without that legislation there would have been no need for the industry to agree to combine that bill with another one legalizing advance deposit wagering (also known as account or telephone wagering).

The combination of those two distinct elements (working conditions for the downtrodden and expanded business opportunities for the racing industry) made it difficult for anyone to oppose the resulting legislation, Assembly Bill 2760, which passed by a solid majority on the final day of California's 2000 legislative session. The same combination should be enough to convince California Gov. Gray Davis he will be doing the right thing by signing the bill into law.

Davis is a liberal Democrat said to be opposed to the expansion of gambling. But when California voters approved a proposition giving Indian tribes the right to negotiate with the governor for slot machines, Davis gave them an open-ended deal that will bring thousands of slot machines into the state. It can be argued that the advance deposit wagering legislation does not expand wagering but merely formalizes something that has been taking place for years as California residents wagered through legitimate out-of-state or illegal offshore operations. This new legislation will keep hundreds of millions of wagering dollars from leaving the state each year.

A bitter pill that came with the advance deposit wagering provisions is a get-tough policy from the California legislature aimed at racetracks and trainers.

The bill dictates that the California Horse Racing Board establish standards for backstretch housing and then enforce those standards. Churchill Downs Inc., which owns Hollywood Park, has a good track record in that regard, having built modern dormitories at its flagship track in Kentucky. Frank Stronach, chairman of Magna Entertainment, which owns Santa Anita Park, Bay Meadows and Golden Gate Fields, has said he will improve backstretch housing conditions at his company's tracks.

The second part of the bill's backstretch reforms deals with labor and is a much-watered-down version from the original language, which practically forced workers to join unions. The bill that passed gives unions access to backstretch employees and gives those workers an opportunity to join a union if a majority agrees to do so. However, even in that case, if a majority of employees working for a specific trainer decides not to join a union, they don't have to. If a majority of a trainer's employees wish to join a union, the trainer can negotiate an individual contract with the union or can join with other trainers in collective bargaining. It's a lot better deal than it could have been.

It is almost certain a trainer's cost of doing business will increase, even if his employees do not join the union. It's even more inevitable those added costs will be passed on to the owner. Let's hope the benefits from account wagering will outweight the added burden of reform.