07/20/2005 11:00PM

Bettors asked to pick up check again

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NEW YORK - Who should pay for jockeys' catastrophic accident insurance?

The obvious answer is that the jockeys themselves should, and lesser cases might be made that the tracks where they perform, and the owners of the horses they ride, should contribute to the cost or at least facilitate the process.

The Jockeys' Guild, however, thinks it has a better idea: Bettors should pick up the cost.

Last Wednesday, at a meeting of the panel appointed by Kentucky Gov. Ernie Fletcher to issue recommendations on underfunded insurance coverage for the state's jockeys and exercise riders, the Guild's representative repeatedly made that suggestion. Darrell Haire, the former rider who is now the Guild's Midwest member representative, proposed that the parimutuel takeout in Kentucky be raised one-quarter of 1 percent to pay for insurance premiums.

The Guild, which has failed to provide its members with adequate coverage, previously has attempted to pressure tracks and owners into paying the bill, with little success. Now it has picked a new target in horseplayers, who historically have been the soft touch of last resort because they have no representation. One fiscal crisis after another is solved at the eleventh hour with a takeout increase.

While these increases might each sound so small that no one will notice or care, over half a century they have added up to a doubling of the takeout rate from 10 to 20 percent. Coincidentally or otherwise, this is the same half-century in which racing has gone from being the most popular form of legal wagering to a piece of the national action so small it barely shows up as a slice on the gambling pie-chart anymore. Racing, with a takeout of 20 percent and climbing, loses ground each year to slot machines and table games, with a takeout of 2 to 10 percent; to sports betting, with a takeout of 4.54 percent; and now to poker, where the takeout at the recent World Series of Poker was 6 percent.

Proponents of takeout increases continue to see no correlation, and insist that sensitivity to takeout is some unproven egghead theory. Here's how it actually works. A $100 bettor who plays six football games will, on average, win three games and lose three. He bets $110 on each of the six games and collects $210 for each of the three he wins. He bets $660, gets back $630, and it cost him $30 for about 18 hours of gambling entertainment.

A similarly average player at the track who bets $110 on each of six races runs $660 through the parimutuel windows at a 20 percent takeout rate, gets about nine minutes of live-action entertainment, and loses $132 for the day instead of $30.

This is real money, and it is a huge difference. People get a lot of action for their money at low-takeout games, and a lot of people have walked away from racing because they find themselves increasingly getting less bang for their bucks. Is it any wonder that more and more people are betting on football rather than horse racing? And now the overtaxed customers should get even less back for their dollars because the jockeys and the industry can't figure out how else to pay for accident insurance?

Racing is the only gambling game where the payoffs keep going down. When a casino has poor earnings for a quarter, or needs to provide better benefits for people who work there, it doesn't change the rules so that blackjack will pay 6-5 instead of 3-2 or that sports bettors will henceforth have to put up $115 instead of $110 to win $100. Yet that is exactly what racing does every time that takeout is increased.

The only good news is that it seems that some racetrack operators are beginning to realize they can not increase taxes on customers indefinitely and expect to have any customers left. Haire's proposal was firmly opposed at Wednesday's meeting by panel members Steve Sexton, president of Churchill Downs and Ellis Park, and Harvey Wilkinson, vice president of Keeneland. At one point, Sexton said to Haire, "You do know you're asking the horseplayer to pay for this, right?"

Maybe Haire didn't. Takeout increases are so prevalent that some people in the industry consider them a painless solution to every economic challenge, a source of free money. In reality, they drain money from the game that would otherwise have been reinvested multiple times, generating higher purses, higher jockey fees, and even more than enough to pay for adequate medical insurance.

Lowering takeout to generate increased handle isn't going to happen soon enough or quickly enough to solve the current insurance crisis, but raising takeout yet again is not the answer.