01/22/2004 1:00AM

Governor vetoes takeout bill

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ARCADIA, Calif. - Gov. Arnold Schwarzenegger vetoed legislation on Thursday that would have increased the takeout on exotic wagers for races in California to help cover the soaring costs of workers' compensation policies held by horsemen.

Racing officials said Schwarzenegger's veto was a major setback for an industry that is facing high operating costs in California and losing horsemen and horses to circuits in other states.

The legislation, which sailed through the State Assembly and Senate with little opposition, was vetoed because the governor feared it could conflict with his long-term plans to reform the state's beleaguered workers' compensation system, racing officials said.

"Somehow this distracts from workers' compensation reforms he wants to pursue," said Jack Liebau, the president of Magna's three California tracks - Bay Meadows, Golden Gate Fields, and Santa Anita.

"This is extremely disappointing. The adverse impact it will have is hard to measure. It's a crushing blow."

Racing officials learned of the veto during the California Horse Racing Board meeting at Arcadia City Hall. Since the bill passed the Assembly on Jan. 12, racing officials were confident the bill would be signed by Schwarzenegger and did not feel it would affect the governor's larger strategy to reduce workers' compensation costs.

Reducing workers' compensation costs were part the platform that helped Schwarzenegger win election in the recall of Gray Davis last October.

Schwarzenegger's plan would increase benefits, reduce administration costs, and develop anti-fraud programs, racing officials said.

Schwarzenegger is trying to have his initiative placed on the ballot for the March 2 presidential primary election, but it could be postponed until the November presidential election.

If Schwarzenegger's measure were approved by voters in November, it would not take effect until July 2005, according to Liebau. The takeout bill would have taken effect 30 days after passing.

"I think there is a misunderstanding of the impact this bill would have on his program," said John Van de Kamp, the president of the Thoroughbred Owners of California. "I think we can try again because it's so important. This is an industry trying to take care of itself."

The takeout bill, sponsored by Assemblyman Jerome Horton (D-Inglewood), would have raised the takeout on all bets other than win, place, and show from 20.18 to 20.68 percent. The bill was designed to generate $10 million in revenue to pay insurance costs.

Rod Blonien, an attorney who represents racing interests in Sacramento, said the bill could be refiled in the next month. He said it was unlikely it would need considerable review at the committee level since it was approved by the Senate by a vote of 31-4 last September and by a vote of 78-0 by the Assembly.

"We'll get up there as soon as we can," said Rick Baedeker, Hollywood Park president. "I think there is a misunderstanding of how important this has been to the industry."