The Word On Winning

So far we’ve talked mostly about costs. Let’s get to the good part—winning!

In recent years, an average of $350 million has been paid each year to winning owners at racetracks in the United States–and you need only to win a tiny fraction of that to be a success.

The purse for a race is most often split five ways, here’s how:

From the amount won by his or her horse, the owner also pays 5 percent to the trainer and 5 percent to the driver. For example, if your horse wins a $10,000 race you will win $5,000, and from that will pay the trainer and driver 5 percent ($250), each (often the track withdraws the driver’s and trainer’s share directly from the purse, and then pays them directly).

On a typical racing program, between 80 and 100 horses will be entered, with 55 of them sharing purse money. Even without winning a race, it’s likely you will share in at least a portion of the evening’s purse money.

Also, while stakes payments and starting fees must be paid in advance by owners for some races, “overnight” races require no entrance fees.

Don’t forget there are other revenue streams for your stable: If a horse you bought improves, he or she becomes more valuable—and that means the possibility of selling at a profit! Or, if you decide to invest in breeding stock and raise yearlings you might turn a profit when you sell your youngsters, either privately or at auction.

The Internal Revenue Code permits owners to treat their racing operations just as it treats any small business: Racing and breeding stock may be depreciated, expenses deducted and so forth. It’s not strictly a tax shelter, but your accountant, who will be another important member of your stable, will explain the tax situation.

The rewards are many

Owning a Standardbred racehorse is a risk-reward proposition perhaps unlike any other. There are many possible upsides to the experience.

The thrill of rooting for your horse, especially when it wins, is virtually unequalled. Many people involved in racing meet others in the sport and make friends for life. The rewards that racehorse owners enjoy include:

  • Owning a horse purchased for a modest amount can potentially win big money—or at least more than they cost to buy and keep.
     
  • A colt with outstanding ability among his peers may have a future career as a stallion, and if successful in the breeding shed can generate a six-figure income each year, for as long as 15 years.
     
  • An outstanding mare can become a broodmare and produce as many as 15 to 18 babies, one per year, which in turn could each be worth tens or hundreds of thousands of dollars when sold.
     
  • A well chosen claiming horse or properly classified racehorse can be purchased for a modest amount of money, then could rise in class and thus earn more than enough money to cover his training and racing bills. He might also rise to a higher claiming level, and when claimed bring in more money than he cost to buy. And you get to keep the purse winnings when he’s claimed.
     
  • You can buy or claim a horse that has been unsuccessful for his current owner and trainer for a modest amount of money, and your trainer might find the key to improving that horse. You would win bigger purses against a higher level of competition. Or, perhaps the driver you employ recognizes that the horse you bought will perform better, and earn more money, by using a different racing strategy.