09/09/2003 11:00PM

Overtaxed players need a voice


DEL MAR, Calif. - California State Assembly Bill 900 entered this world last February as an innocuous revision of some Business and Professions Codes as they pertained to horse racing.

Then, last week, AB 900 morphed into Spider-Man.

The amended version of AB 900 was promoted as the racing industry's last best hope to resolve the growing burden of workers' compensation insurance premiums on California owners and trainers.

It's magical.

AB 900 would increase the takeout by half a cent on every exotic wager offered on a California Thoroughbred race. In calendar year 2002, a total of $2.7 billion was bet on California exotics. Supporters of the idea say that the increase will provide $10 million a year to cover the ongoing costs of workers' comp premiums.

The State Senate passed AB 900 Tuesday, and the Assembly was to vote on Thursday. After that, there is very little doubt Gov. Gray Davis will sign the bill into law. After all, he's the guy with the $38 billion budget deficit and the economy in chaos. Anything that even remotely addresses a problem like workers' compensation will be welcome.

The bill is furthermore described as an "urgency statute," which means, if enacted, it must go into prompt effect "for the immediate preservation of the public peace, health, or safety . . ." Serious stuff.

There is, without a doubt, a lot riding on the resolution of the workers' comp crisis. Good people are being forced to choose between pursuit of their lifelong careers - in this case, horse racing - or financial solvency and family security. The fact that so many owners and trainers have hung tough in the face of the runaway insurance scandal is testimony to their commitment to the long-range health of the racing business.

But after more than a year and a half of plugging the dike with short-term insurance solutions, the racing industry has finally given up. None of the various constituencies were willing to sacrifice further - neither the trainers, the owners, nor the racetrack operators. So they turned for funding to the one racing constituency without representation.

The gambling fans.

Proponents of the increase in exotic takeout maintain that the half-cent increase hardly will be noticed. They point out that California still will have among the lowest takeout rates among the major racing jurisdictions. They predict that this hopeful resolution of the insurance crisis will lead to the retention of established stables, renewed ownership investment, and an ultimate increase in both the quality and quantity of horses competing in California - all to the advantage of gambling fan.

This, of course, is both wishful and cynical thinking.

The trickle-down theory of racing quality has yet to be proven. Even before the insurance crisis, the sport in California was suffering from small fields and ownership anemia. Even with more than $4 billion bet on California racing every year - an ever-increasing figure - the pie was being sliced so many different ways that consumers saw no appreciable impact.

Furthermore, trying to make consumers feel good about a price hike by reciting higher prices elsewhere will never fly. Try to convince a Californian with a car to thank his lucky stars he's not in France, where gasoline is upward of $6 a gallon, or Tierra del Fuego, where you can't get it unless you fly it in.

And as for the idea that a half-cent increase on exotics will never be noticed, well, that is what its backers are counting on. To paraphrase the late Sen. Everett Dirkson: A half-cent here, a half-cent there, and pretty soon you're talking about real money.

If the customers have any voice at all, it should come from the California Horse Racing Board, made up of commissioners appointed by an elected official. In this case, the elected official was Gray Davis, but don't hold that against the board.

Of all the commissioners, John Harris has played the racing game from nearly every side, as breeder, owner, and racetrack executive. He backs the half-cent increase, with stern reservations.

"I will support it only if it's clear that it is a temporary measure that will be revisited in a year or so to see if it is the best solution," Harris said. "What we really need is a total reform of workers' comp.

"We've got to look out for the fans, because they're the heart of the industry," Harris went on. "We also need to realize that they have a lot of choices, and at some price level they might no longer want to be fans.

"Philosophically I have a lot of doubts about increasing takeout. I'm not sure I like to see that as either a first or last resort. When you get into all these economic arguments, there's not a real clear solution sometimes. But over time, the higher you price something, the less you might sell of it."

Fair warning, then, and a humble word of advice. If the game is going to stick the fans with yet another bill, it would be wise to give them a little something in return. Thank-you notes are nice, maybe fruit baskets. Or perhaps a very public commitment to end the traditional lip service and put the fans first and foremost when it comes to the comfort, convenience, and integrity of the horse racing experience.