California comp bill is law

INGLEWOOD, Calif. - California Gov. Arnold Schwarzenegger signed legislation on Thursday that will increase the takeout on exotic wagers placed on California races by one-half of 1 percent to offset the costs of workers' compensation insurance paid by trainers.

Racing officials said the higher takeout structure could take effect within a week, and possibly this weekend.

The takeout for all bets other than win, place or show will increase from 20.18 to 20.68 percent. The increase is expected to generate $10 million annually for insurance costs.

High workers' compensation costs in the last two years have been blamed for some owners and trainers leaving the sport and others being forced to reduce their holdings.

"I think the first emotion everyone is feeling is relief," said Drew Couto, the executive director of the Thoroughbred Owners of California.

Schwarzenegger vetoed a takeout increase bill in January, saying he would not support a bill that did not include provisions for greater regulatory oversight, a sunset clause, and wider participation from racetracks and county fairs in the management of the program. Those provisions were added to a bill sponsored by Jerome Horton, Democrat from Inglewood, that was introduced in March and sped through the legislative process.

The new program will subsidize owners and trainers in two ways. A starter's fee will be paid to the owner of each runner, ranging from $300 on the northern California circuit to $400 in Southern California. That plan could start as soon as May 26. A similar plan will be enacted on the fair circuit, but the amount has not been finalized.

In addition, trainers will receive a subsidy to go toward their workers' compensation policies. The subsidy plan is expected to be in place by July 1, Couto said. Track officials have scheduled meetings in the next few weeks to discuss the financial details.

The subsidy is expected to reduce premiums from $35 per $100 of payroll to closer to $20, according to Hollywood Park's president, Rick Baedeker. Trainers are required to hold separate policies covering backstretch employees and jockeys. Most of the increased costs have been passed on to owners through daily training fees.

Ed Halpern, the executive director of the California Thoroughbred Trainers, said the immediate reaction was relief.

"As I walked around this morning, the reaction is very positive," he said. "There is a sense of satisfaction that we got something done."