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“Band-Aid” fix for 2006 racing in Montana

March 1, 2006     E-mail this page to a friend!

By Phyllis Tryon

Horse racing entities across the nation are moving to resolve the dilemma of increased financial burden resulting from the high increase in jockey insurance rates announced by Mather Insurance Company to small race tracks in January.

The Montana Board of Horse Racing met with industry representatives from race meets across the state on Saturday, February 25 to address possible solutions to the problem. While those present were able to come up with an immediate plan to bandage the industry and hopefully appease county commissioners regarding liability issues and increased costs for this year, there is significant doubt whether live horse racing in the state can sustain itself beyond 2006 without major changes.

Not present was any representative from the state’s Horsemen’s Benevolent and Protective Association nor any jockeys that ride in the state. One horseman from Missoula attended because of personal interest and was the lone horseman present.

The Band-Aid fix, proposed by Racing Director of Yellowstone Downs, Ben Carlson, accepted by track managers present, and passed with a rule change by the MBOHR, offers a guarantee to race tracks in the state which run a live meet in 2006 that any excess jockey insurance costs acquired by a track this season due to catastrophic accidents could be paid with continued percentage of simulcast dollars and if needed, SB65 money, until the liability is paid even if the track shuts down. Under former rules, all monies received end when a track shuts down.

The fix offers race tracks an opportunity to run this year without being forced to close their doors as a result of the jockey insurance liability costs. However, at a $10,000 deductible per accident and with the high record for jockey claims at almost every track within the state, it is highly probable that a few claims this season could result in closed doors next season.

Insurance rates rose from approximately $1200 per race day cost and a $1000 deductible to over $2000 per race day cost plus a $10,000 deposit and a $10,000 deductible per accident claim. Coverage increased from $100,000 to $500,000.

Some states have resolved the dilemma by resorting to Workmen’s Compensation while others with better “track records” than Montana have found coverage with other companies. As noted at the MBOHR meeting, those researching the problem in Montana have not found a company willing to carry the insurance due to the past high record of claims in the state.

The MBOHR and horsemen in the state opted out of Workmen’s Compensation through legislative action in the late 1990s. The battle to opt out was prolonged and bitter, and MBOHR Executive Secretary Sam Murfitt noted to those present at the February 25 meeting that it was not feasible to now try to get Workmen’s Compensation for jockeys back in place. He also said the rates would be basically unaffordable anyway, which was the main reason for opting out in the first place.

Possible solutions offered to help cover costs were:
1. impose an “out fee” per race
2. eliminate the $10,000 Jockey Incentive Fund in the state and apply those funds to help cover costs
3. reduce purses and apply the reduction toward jockey insurance costs
4. use of SB65 money
5. use of Montana Simulcast Partners revenues
6. use of track carry-over money
7. work with Mather Insurance to cover medical costs but no disability
8. eliminate Owner’s Bonus and use money to help cover insurance costs

It was noted that one of the problems in the state is that there is no “new money” in horse racing, but the same money is circulated annually and the pool is shrinking due to rising costs on all fronts, not just jockey insurance.

Also noted was that tracks are not required by law to cover jockey insurance, and in events such as rodeos, participants are not covered by fairgrounds. The question remains whether jockeys would come and ride in Montana if tracks did not provide any coverage, and whether fair boards would be willing to race with the possibility of being sued for injuries.

Montana has a high record of claims resulting in substantially more money paid out through the years than insurance premiums paid in. In addition to claims filed on injuries, jockeys have filed disability claims against specific meets while continuing to ride at other meets in the state. It was also noted that the final meet to run in the state had unusually high claims filed against it each year.

Although none of those present wanted to see horse racing end in Montana, all agreed that at the present claim rate, horse racing will bankrupt the local fairs and private groups operating meets.

The Board of Horse Racing voted to abolish the $10,000 Jockey Incentive for 2006. Tracks may use the extra funds to help cover jockey insurance costs. The board also voted to continue the Owner’s Bonus at this time to see if there is any effect on the number of horses racing in the state.

It now remains for the track representatives to sell live racing for 2006 to their local fairboards and managing groups. The consensus of opinion is that while the current bandage may salvage racing for this season, a long-term solution is required, and quickly, to salvage horse racing in the state for the future.

Sam Murfitt, executive secretary for the Board, noted that a huge problem is simply that there is not much horse racing industry left in the state.

“They’ve either quit, died or gone elsewhere,” he said of horsemen involved in racing.

It is estimated that only 30 to 50 percent of horses racing in the state are actually Montana horses.

“We’ve all purchased a ticket for the Titanic,” noted board member Tim Donnelly regarding current efforts to keep racing on track in the state.