At first glance, trainer Robertino Diodoro’s achievements in horseracing in New York should have made him a great success. Since early 2017, his horses have earned around $3 million, and he has won 69 races.
When asked if these wins have brought him money, his answer is simply: “I don’t think so.” The reason is how expensive it is to race horses in the state, especially factoring in the high cost of workers’ compensation insurance. New York has the highest workers’ compensation premiums in the country.
“It’s very expensive to operate in New York,” explained Diodoro. “It’s not how much money you make. It’s how much you spend.”
Diodoro is also stabled at Delta Downs in Louisiana and Turf Paradise in Arizona. To save money, he is more than halving the number of horses in his New York stable. By the end of January, he may have left New York altogether.
The New York Racing Association (NYRA) offers among the highest purses—that is, the total money paid out to the owners of race entrants—in the country. Despite this, other trainers are also considering leaving New York.
“My accountant tells me all the time, when am I leaving or getting out of there,” said trainer Mark Casse.
Barclay Tagg, who has been racing in New York for almost thirty years, has taken most of his horses to Florida for the winter. “I want to come back, but I’m going to keep reevaluating all winter long,” he said.
“It’s been a real hardship,” said Linda Rice. “It certainly makes it unattractive for people who want to come in and build a business here.”
When it comes to workers’ compensation fees, trainers are required to pay a $1,500 premium annually together with a daily $1.60 fee per allotted stall. This is paid to the New York Jockey’s Injury Compensation Fund which covers both exercise riders and jockeys. The policy totals around $8.4 million. Owners must also pay an annual $1,500 premium together with 2 percent of the purse money they earn.
In addition to this, trainers are required to have a workers’ compensation policy which covers stable help—for example, grooms and hotwalkers. This policy is expensive, costing up to 25 percent of a horseman’s payroll. In comparison, the cost in Florida is only 10.8 percent. Kentucky and Arkansas have even lower rates, at 7.18 percent and 5.46 percent respectively.
Finally, trainers in New York also have to pay an 11 percent assessment on top of these premiums.
Across the country, employers have been underreporting payroll or misclassifying workers in order to avoid expensive workers’ compensation premiums. Linda Rice recently settled with the Department of Labor after a two-year investigation. Another trainer, Kiaran McLaughlin, is also facing an investigation from the department.
The NYRA says it is working on a solution to these financial issues, including programs to increase purse amounts. The question is, can they change things fast enough before more trainers leave the state?
“I came out of there with money saved up, and now it’s gone,” said Robert Falcone Jr., who was formerly based in Santa Anita in California but has been working to succeed on the New York circuit. “The money’s a lot better in New York, but when you factor how much you put up for workman’s comp, it doesn’t make sense for a smaller guy like me… The money you earn commission-wise, 80 percent of it is going to workman’s comp.”
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