 Are there tax advantages to Thoroughbred ownership? |
If your Thoroughbred operation is run as a business, there can be some tax benefits. Each state and the federal government view racehorse ownership in varied ways. It would be best to consult your tax advisor to learn the specific advantages in your home state and the states where you wish to race. LINK |
| Do I need a license to become an owner? |
Owners are required to be licensed in the state they intend to race. Each state has its own licensing procedures, applications and fees. Most states require fingerprinting. Most racing commissions have a licensing office at the racetrack. A national racing license is available however; it is not yet accepted by all jurisdictions. LINK |
| How do I become an owner? |
You can become an owner through a partnership, a private purchase, at an auction or by claiming a racehorse at the racetrack. |
| How do I buy a horse? |
If you are purchasing a horse at an auction such as Keeneland, you must establish credit before you bid, or be prepared to pay for the horse immediately upon the fall of the hammer. It is best to contact the sales company in advance to make the necessary arrangements. Claiming a horse requires that you hire a trainer before the claim is submitted. Then obtain a claim certificate from the stewards and have the funds needed to claim the horse (claiming price plus all applicable taxes) on deposit with the horsemen's bookkeeper before submitting the claim. Each state has its own rules regarding claiming and the state's racing commission office can provide you with this information. When making a private purchase use the same care and attention to detail that you would use in making any major purchase and always get the best possible advice. An advisor is recommended. You may also purchase a share of a horse in a partnership. There are several established partnerships with proven track records. They offer shares in single horses or multiple horse syndicates. Many partnerships advertise in trade publications and have websites describing their services and offerings. It is a good idea to meet with several syndicate managers and examine each partnership prospectus before investing. |
| How do I find a trainer? |
The key to finding the right trainer for you is to watch, read, listen, observe and communicate. Watch racing programs on television and listen to what the trainers have to say. Read articles about trainers and review their records in publications such as The Blood-Horse. Listen to established owners at the track and ask questions about their trainer. Visit the barn area, observe how different trainers handle their operations and then interview a few prospective trainers before making a choice. Discuss the trainer's racing philosophy and find out about training charges, the stable's typical veterinary charges and any additional services or items that might be charged to the owner. Communicate your goals and aspirations for your horse business to the trainer and select one who understands your objectives. Give the same consideration to selecting a trainer that you would to selecting a business partner. |
| How do I make money as an owner? |
Horses usually earn a part of the purse any time they finish in the top five of their races. Purse values and purse splits vary from track to track, but typically, the winner receives 60% of the listed purse, with 20% to second, 12% to third, 6% to fourth and 2% to fifth place. Some states offer incentives for horses bred within the state, which can increase the purse substantially.
In addition, if a horse consistently performs well, besides earning purse money, their value can increase substantially, making them attractive to other owners who may want to purchase or claim them for their own stable.
Horses also have a residual value for breeding purposes, which can number in the millions of dollars if a horse is successful on the racetrack and has a solid pedigree.
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| How many times a year can I expect my horse to race? |
Each horse is an individual. Some horses can race frequently and maintain their physical and mental fitness for extended periods. Others need more time to recover between starts with time away from the racetrack.
Age is also a factor. Two-year-olds start their careers later in the year and usually only start a few times before they turn three. Many older claiming horses run all year long, while stakes caliber horses may only start in major races.
The current trend in racing is to give horses about three weeks rest between starts. The average sound horse starts about a dozen times a year.
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| How much does it cost to own a horse? |
The purchase price of the horse is just the beginning. Training expenses vary by track and trainer. You can expect to pay $40 to $100 per day, per horse, depending on where you race and who trains your horse. Veterinary care is usually additional to the per diem training charge and can be minimal or quite expensive. The health and soundness of your horse and the horsemanship of your trainer have the biggest influence on these costs. Typical monthly vet charges for a Thoroughbred in training would be about $150 to $500. If needed, surgery and after-care can be expensive. Although considered unusual veterinary expenses, an owner should be prepared to pay for them. Shoeing is also an additional monthly charge and usually runs about $100. Special shoeing can be as much as $400 per visit. Owners competing at major racetracks like Keeneland can expect to spend about $34,000 to keep a single horse in training all year long while those racing at smaller tracks might spend around $22,000. |
| What is a bloodstock agent? |
A bloodstock agent is a person who advises and/or represents the buyer or seller of Thoroughbreds at public auction or private sale. Bloodstock agents are paid a commission, typically 5%, to buy and sell horses. They may also give advice on pedigrees, breeding, racing and some may consign horses to sales. Many of the same principles used in selecting a trainer apply to bloodstock agents. An additional factor in determining the reliability of a bloodstock agent is longevity. A record of multiple successes over a span of years is a decent indication of reliability and honesty. It is important to remember that bloodstock agents, like stockbrokers, derive their livelihood from commissions generated by the money you spend, so it is important to find an ethical bloodstock agent with a solid reputation. |
| What is a claiming race? |
A claiming race is a race where horses are entered for a specified price and must be sold to any owner who enters a claim (complying with state claiming rules and eligibility) before the race is run. The purpose of claiming races is to level the competition by allowing owners to classify their own horses. Horses entered in claiming races at a level higher than their ability have little chance of performing well and earning purse money while horses entered in races below their true value have an excellent chance of winning but run the risk of being claimed by another owner. |