Executive Corner
Guest-Bob Fox
Sacramento Bills - For and Against
Two bills which would have a significant effect on racing in California, passed the Senate GO Committee on Wednesday June 21. One, Assembly Bill 1405 is viewed as positive, while the other, AB 2760 contains provisions that could have a severe negative economic impact, unless it is amended significantly.
Summary of both bills: Assembly member Herb Wesson, Chair of the Assembly GO Committee, and a strong supporter of racing, is the author of Assembly Bill 1405. The bill would permit a regulated system of account wagering that would benefit California racetracks and horsemen.
Presently there is no mechanism in place to ensure that account wagering dollars from California residents return to support state businesses, racetracks, breeders, and horsemen. The California racing industry receives little, if any, revenue from wagers made by California residents over domestic or foreign offshore account wagering systems. If a California racing fan stays home and places a wager on a New York race, California racetracks and horsemen do not share in the revenue resulting from that wager.
Since the distribution of pari-mutuel wagering revenue among racing organizations has traditionally been determined by legislation in California, the California racing industry is united in its support of AB 1405, which sets forth a clear regulatory structure and complete revenue sharing plan for pari-mutuel account wagering.
AB 1405:
1. Similar to New York, Pennsylvania, Oregon, and others, it would specifically authorize the California Horseracing Board to license wagering hubs to accept ONLY pari-mutuel horseracing wagers from California residents on races conducted both in California and at all other racetracks around the country.
2. Allow those wagers to be accepted over telephone lines or other electronic media once a patron has established a wagering account with the wagering hub.
3. Require the wagering hub to use security technology approved by the Board to assure that access to the betting system is limited to adults only.
4. Establish a formula for the distribution of revenues received from the wagers.
The formula provided that:
The bill means that every racetrack, fair organization, satellite wagering facility, horseman, breeder, agricultural worker, and municipal government associated with the California racing industry will participate in account wagering on horseracing. AB 1405 would ensure that at least 50% to 67.5% of account wagering revenues originating in California return to the state's economy. Compare that to the 0% to 15% that is returned to the state from account wagering by Californians today.
The CTBA encourages all members of the association to contact their legislator and urge them to support this important piece of legislation. The bill will be heard in the Senate Appropriations Committee, probably in August, then it will go to the Senate floor for a vote. It then goes back to the Assembly for concurrence in the amendments that were made in the Senate.
If it passes the Senate and the Assembly, then it will go to Governor Davis for his signature. It is critical for all organizations in racing to communicate with the Governor's office to let them know that we support this bill. CTBA members are encouraged to communicate with their Assembly member, Senator, and the Governor to let them know that we believe that AB 1405 is a vital piece of legislation and needs to be passed and signed into law.
ASSEMBLY BILL 2760: The labor union movement is attempting to capitalize on an article that recently ran in the Los Angeles Times, criticizing the living conditions and alleging wage and hour violations on the backstretch of California's racetracks. This has resulted in Assembly Bill 2760, now authored by Assembly members Herb Wesson, Darrell Steinberg, and Allen Lowenthal.
The bill has been amended to address "problems" which were identified in the article. Based on the language in the bill, it appears that the authors believe the solution to many of the problems is to organize the back- stretch workers and provide for union representation. They want to do this absent of any election process and force all the employees into one bargaining unit.
The racing industry including CTBA, TOC, CTT and the tracks, are united in it's opposition to the bill in it's current form and representatives testified against it, in a hearing in the Senate GO Committee hearing in Sacramento on June 20. At the hearing, several racing industry representatives expressed their opposition to the bill, but the authors asked that the bill be passed out of committee to allow for some time to try to reach a compromise. The bill is now in Senate Appropriations Committee, "on hold" until the parties try to reach an accord.
There are several major concerns with the bill. First, it would require the California Thoroughbred Trainers to be a "multi-employer bargaining agent" in dealing with a union that would represent the backstretch workers. The CTT would be required to enter into a labor agreement with the union on behalf of all of the trainers. The union would not have to organize on an employer by employer basis, as is the practice in most industries. Instead, the union would get employee cards signed and it could be deemed that a sufficient number of signed cards meant the union now represented all the backstretch employees. Any one group of employees working for a given trainer would have no ability to stay out of the union, even if none of them wanted to be in the union. These individuals could be forced to pay several hundred dollars a year in dues and initiation fees to the union.
The CTT has stated unequivocally that it cannot, and will not, be a multi-employer representative for the more than 800 trainers currently licensed in California.
Other provisions of concern include the requirement for union representation on the Pension Fund Board and Welfare Board, a requirement that trainer's payroll records be made available to the public, and that the union have access to workers for organizing purposes during BOTH working and non working hours.
Under this law, the CHRB would be required to provide the union with a list of all backstretch workers, including their home addresses and telephone numbers. Such practices are likely to lead to intimidation of employees and violate privacy rights.
The bill also requires the CHRB to immediately adopt regulations governing employee housing provided to backstretch workers. This provision is of concern to not only the Thoroughbred tracks but the fairs as well. All parties want good housing conditions for backstretch employees, but there are sufficient rules and regulations in place now to address this.
A legal analysis done by a respected labor attorney has concluded that many provisions in the bill are unconstitutional and in conflict with current State and Federal laws.
The authors and the racing industry hope that during the summer legislative recess, language can be developed which will be acceptable to both sides. Senator Perata, Chair of Senate GO Committee, requested that the bill be returned to the committee if an agreement isn't reached.
The racetracks and trainers have committed to correct the problems that exist on the backstretch and have taken major steps to do so. The CTT has held seminars to educate the trainers about their responsibilities with regard to record keeping, positing of notices and other requirements. All backstretch workers are currently protected by the same wage and hour laws as other employees in California.
The CTT has also pointed out that the workers already receive significant benefits, and it's unclear exactly what the unions could offer the workers if they were to organize them.
The medical program, which is provided to each worker, includes coverage for the worker and his/her family and would normally cost somewhere between $473 and $533 depending whether it is in Northern or Southern California. Vision coverage adds approximately $20 to that amount. The retirement program contribution for each employee that signed up for 1998, was $146 per month.
The quantifiable value of the benefits received by a worker and their family is somewhere between $3.86 and $7.72 per hour depending on the workers hours of service. In addition, the worker may to choose to live on the premises at no cost.
Below are additional benefits that are difficult to quantify monetarily, but are significant when combined with all of the other benefits available.
At least minimum wages, free out-patient and in-patient drug and alcohol programs, free religious and social programs provided by the track chaplaincy, free sports leagues, free recreation classes and activities, free language classes, free day trips and outings, free holiday parties and gifts for employees and their families, as well as non-profit snack bars and convenience stores.
Based on the strength of the opposition by the racing industry, it appears that a compromise is unlikely. Recent meetings of the CTBA, CTT and TOC have all resulted in formal actions to oppose the bill. There is a great deal of concern about what the overall effect of unionization of the backstretch workers would be, including the very real potential of driving more owners and trainers out of the California racing industry. While all parties feel workers have the right to organize, this bill forces unionization regardless of the needs of the employees and the employers.
The bill is scheduled to be heard in the Senate Appropriations Committee, on August 7, when the legislature returns from their summer recess. Members of CTBA are encouraged to contact their legislators to express their concerns with AB 2760.
-Bob Fox