Takeout hike debated in California

ARCADIA, Calif. - Legislation that would increase the takeout in California to help pay for increases in costs for workmen's compensation policies has been discussed by racing officials and could be introduced in Sacramento this month.

The potential legislation was brought up at the California Horse Racing Board meeting on Thursday, with mixed reaction, and was a topic at a meeting of racing officials at Santa Anita on Friday.

"The bill is in the early stages of getting a consensus," Santa Anita president Jack Liebau said at the CHRB meeting. "It has not seen the light of day in Sacramento."

According to several officials, the proposed legislation calls for the takeout to be increased by half of a percentage point. The takeout is the amount deducted from wagers before winnings are paid out. Revenue from takeout is shared by the state government, racetracks, and horsemen through purses.

Currently, California bettors have a takeout rate of 15.43 percent for win, place, and show wagers, and 20.18 percent for other bets. The rates are among the lowest in the country.

The rates trainers pay for workmen's compensation insurance covering jockeys and stable employees increased March 1, when Legion Insurance announced that it no longer would write policies. Trainers whose policies expired in late February had to pay higher rates with State Fund, the only remaining provider.

Other trainers have policies that will expire July 1. There is an urgency among racing officials for some kind of relief by that date.

The potential legislation has the support of the Thoroughbred Owners of California, whose members have been hit with higher training bills because of the new workmen's compensation rates. "I think we will be supportive," said TOC president John Van de Kamp. "It's still in the discussion stage."

The potential bill already has its detractors, including high-ranking CHRB members. "I would be personally against a bill that will increase the takeout," vice-chairman Roger Licht said on Thursday.

Ed Halpern, the executive director of the California Thoroughbred Trainers, said his organization has not taken an official position.

"My view is it's a necessary price rise to deal with the increased cost of doing business," he said.

Van de Kamp said discussions continue with insurance companies that might enter the workmen's compensation market, making the takeout legislation unnecessary.

"There may be others that can offer better rates that State Fund," he said.