Jockeys' Insurance Debate: Highlights and Lowlifes

- Matt Hegarty reports in the Form that industry reaction to the proposal to pay for jockeys’ workers compensation insurance out of simulcasting revenues was swift and negative. The opposition is largely due to Reps. Ed Whitfield and Bart Stupak’s suggestion that amendments to the Interstate Horseracing Act (IHA) could give jockeys veto power over simulcasting; and it’s to be expected given the fact that simulcast signals generate approximately 90 percent of the revenue to the racing industry. Would you expect that racetracks and owners would voluntarily give the riders that kind of control over such a vital source of revenue? Perhaps some of them noticed what transpired at the Monticello harness track a few months back when drivers used their veto power to cut off signals, resulting in a disastrous revenue loss, and a resulting 50% slash in purses.

Dan Metzger, the president of the Thoroughbred Owners and Breeders Association, said that his group considers that the current legislation "is set up properly to give owners and their authorized agents, the trainers, the veto rights. The owners are the investors who put on the sport, and they are the ones who are most qualified to make those decisions." [Daily Racing Form]

Any tinkering with the 1978 IHA is going to make the industry queasy, as it’s the legislation that exempts the sport from laws prohibiting interstate gambling, thereby allowing the simulcasts to proceed. Amendments in 2000 specifically permit telephone and internet wagering on out-of-state tracks. An attorney for the National Horsemen's Benevolent and Protective Association explained in this Bloodhorse piece from March:

"First of all, I think I'd be very reluctant to open up the IHA to any amendments…..Beyond that, I would not be in favor of opening it up, because a share of the revenue (to pay for workers' comp) would likely come from owners who already lose money as it is.

"I'm not so sure there is a national answer to the jockeys' insurance situation."

And Remi Bellocq, the executive director of that group, explains that The current law "is what allows us to go and get our fair share of purse dollars from handle, and the jockeys already share in that.”

The jockeys and the bill’s sponsors cite the risks that riders take every day, and point out that, in Rep. Whitfield’s words: ""There isn't any group, in my view, that is more important in racing than jockeys.....There's enough money in this industry to address this problem."." [Courier-Journal] With the bill in its infancy stages, this dispute is obviously just getting started. Of course, if all racetracks agreed to increase their coverage to $1 million, as many already have, and/or other states followed the lead of those like New York which already provide for coverage, the measure could become moot.

- A good deal of the testimony on Tuesday by the Jockeys’ Guild’s counsel Barry Broad dealt with the organization’s investigation into Wayne Gertmenain, and I’m surprised that the press didn’t really mention that at all. In fact, we just haven’t heard much lately about Dr. G, who has slinked back into what is apparently the safe haven of Pepperdine University, which still – STILL! – displays his discredited resume as fact on their website. You can read Broad’s written testimony to the Subcomittee here (click on ‘Mr. Barry Broad’ for the pdf file). Some of it we already know, but it bears repeating. Some of the highlights…..or perhaps, lowlights (or lowlife!) would be more appropriate:

- Dr. G told Senators on the day he was fired that the Guild had a $3.5 million “war chest,” though he knew that the assets were “nearly totally depleted.” Sounds like perjury to me.

- On that same day, he “caused more than $200,000 in checks to be issued to himself and Mr. Albert Fiss, leaving the Guild with just a few thousand dollars in the bank.”

- About $500,000 was “depleted” from jockeys’ savings accounts.

- Matrix Capital was paid “hundreds of thousands of dollars” even as Dr. G was collecting a full-time salary; this in addition to “tens of thousands” for consultants, who were “associates.” “We suspect that little of value was delivered by Matrix..”

- Certain Guild members were given free health insurance, or were allowed to remain on the plan despite missing payments, “apparently in order to curry internal political support.” “As a result, the amount of unpaid premiums reached a level of approximately $700,000.”

- Gertmenian charged the Guild for Matrix’ rent. “As if that weren’t enough, Matrix added a ‘maintenance fee’…..there is no evidence that any maintenance services were actually provided.”

There’s more, but as Broad said in closing, “I could go on and on, but I believe that you have the flavor of what occurred under the tenure of Dr. Gertmenian.” And it tastes pretty putrid.