Hold Your Horses…How Much?!

The horse racing market is a large part of the equestrian industry. According to statistics, the horse racing industry in the United States is valued currently at over $3 billion dollars. While $3 billion is a staggering number all in itself, this is just a small portion of the market. What if we told you that this is only about 1% of the total economic valuation of the horse racing industry? Horse track racing is steadily gaining popularity worldwide. The global horse racing market is valued at over $300 billion dollars.

Why Horse Racing?

Horse racing, as we know it, is speculated to have beginnings around the 18th century. Horse races across the world have contributed to the rapid expansion of the horse racing sector of the equestrian market. Some of the most popular horse races include the Kentucky Derby, Breeders’ Cup, Belmont Stakes, Grand National, Royal Ascot, Dubai World Cup, and more.

Spectators and participants gather from all over the world to watch and compete in these events year after year. Race tracks and these large events are a money-making machine due to the amount of betting involved in the sport. Most horse racing events held in the United States have bets conducted through pari-mutuel pools. A pari-mutuel pool is a collective sum of the dollars of every bettor after the takeout percentage for taxes and track funding is removed. The remainder of the pool will be equally split between the winning race bettors. The pari-mutuel pool record of $179 million stands from the 2022 Kentucky Derby.

Read More: Ranking the Best Racehorses of All Time

How Much Does a Racehorse Cost?

The median purchase price of a racehorse is $75,000. The price tag of a racehorse will vary depending on a few factors.

Breed of the Horse: Typically, racehorse breeds are Thoroughbreds, Arabians, and Quarter horses. However, it’s not uncommon to see Standardbreds on the track either. The price variation based solely on horse breed is huge.

For example, you can purchase a skilled Standardbred for around $5,000 (or less). In contrast, a Thoroughbred horse price for racing can cost up to $300,000 at the time of purchase.

Age: The prime age for a racehorse is 4-5 years old. Younger racehorses will have a higher price tag.

Pedigree: Horse ancestry is very important. When thinking of horse pedigree, it’s quite literally their family tree. While it’s true that horses don’t always take on the traits of their parents, when it comes to a first-time racehorse, pedigree is one of the most important factors. Pedigree often provides good insight for racehorse performance.

Earnings: If the purchased horse has raced before and proven their performance on the track, their value increases and in turn, they will cost more.

Place of Purchase: Where a racehorse can be purchased will also play a big role in the price. Buyers should ensure that the purchase place is somewhere or from someone that is reputable.

Cost of Maintaining a Racehorse

When considering how much racehorses cost, it’s not just the price point at purchase that needs to be considered. Once the horse is purchased, there are many ongoing expenses.

After paying the retail purchase price, a racehorse owner will then have to invest in lodging for their horse. There is a wide span of price points for horse lodging because there are several different options that can be pursued. For some, it may just be a horse stable or boarding rental fee. For others, if lodging the horse on your own property, it may require building a stable or barn.

Depending on where you are located, monthly costs for horse boarding can cost anywhere from $500 - $2,500 per month. Building costs on your own property vary greatly depending on the economic market at the time of build.

Transportation is another large aspect of racehorse ownership, as you’ll have to get your horse to and from training activities and other racing events. The two main options when it comes to horse transportation are to purchase a horse trailer or utilize a horse transportation service. Since racehorses come in a wide array of sizes and breeds, it’s important to ensure that the trailer you choose to buy or transport them in has adequate stall room so that they can travel comfortably and safely.

Read More: How to Find the Best Warmblood Horse Trailers

Aside from the main investment of retail price and boarding costs, some other racehorse ownership costs to consider include:

• Insurance
• Vet bills
• Training
• Farrier
• Race fees

In addition, as with ownership of anything, there will be unexpected costs and fees that arise on top of planned expenses.

Can You Make Money Owning Racehorses?

With racehorses being such a costly investment, it’s a good question to ask; is owning a racehorse profitable? To answer this question, let’s look at just how racehorse owners make money.

At a horse race, the purse (or prize money) is the money that is to be paid out to the owners of the racehorses. In a standard race, the top three finishers will split the purse based on the ranking in the race. First place gets the highest percentage, the runner up and third-place finishers get allotted percentages, and the rest is evenly split between the rest of the participants.

However, depending solely on races for profit is usually not ideal, and it is not practical to make a career out of for racehorse owners. The average purse in 2020 was $31,399. First-place finishers in races normally take home 60% of the purse which would be around $18,800. This seems like a lot of money – right? Not necessarily. This amount is depending on the racehorse taking 1st place. If the racehorse finishes first, the owner will then have to take money out of this for jockey and trainer fees, and then continue to pay the monthly costs of housing, feeding, medical maintenance, and training fees.

Typically, racehorse owners find more monetary reward in breeding their horses and selling their offspring. Of course, in order to have buyers pay top dollar, racehorse owners will have to go through a racing career to allow their horse to prove themselves on the track. An established track history and excellent pedigree will translate into high-earning studs.

Where to Buy a Racehorse

If you’re in the market to buy a racehorse, there are a few different options. A racehorse can be purchased from an auction, a private owner, or a claims race.

Racehorse Auction

Auctions are the most popular place to purchase a racehorse. These auctions are often publicized and there is a catalog of all of the horses for sale. This makes it easy as a buyer to quickly determine which horses that you’re interested in based on physical characteristics and pedigree.

Private Owner

If you’re looking to get the best bang for your buck when purchasing a racehorse, a private owner is considered to be the most cost-efficient choice. Usually if a private racehorse owner is selling, they are wanting to get out of the industry, or perhaps need the extra cash. In any case, private sellers are considerably more willing to negotiate.

Claims Race

At claims races, buyers put a claim on the horse they want to buy, and the owner sells the racehorse before the race. At the end of the race, the owner will get the purse, and the buyer will pay the claim price for the racehorse that they chose.

Tip: When purchasing a racehorse, it is always a wise decision to have a written agreement that the purchase will only be considered final and non-refundable after the racehorse is cleared by a veterinarian. Finalizing a racehorse purchase before having a vet check them out can be a risky move – there is unfortunately a lot of fraud that takes place in this industry.

Conclusion

Racehorses aren’t a bargain breed by a longshot. Purchasing a racehorse is very costly, as well as the recurring costs of maintenance, training, housing, boarding, and race fees. While buying a racehorse is not a cheap investment nor one that should be taken lightly, owning a racehorse can be a very rewarding decision.

Frequently Asked Questions

Who was the most expensive racehorse?

The most expensive racehorse ever sold in history was a Thoroughbred stallion named Fusaichi Pegasus. He was sold in 2000 to Coolmore Ireland for $70 million dollars.

How much does it cost to own a racehorse?

Purchasing a racehorse can cost anywhere from $5,000-$300,000, and the average annual cost of racehorse maintenance is $50,000.

Are racehorses expensive?

Well-trained and physically fit racehorses are some of the most expensive horses in the world.

How to buy a racehorse?

Racehorses can be purchased at a horse auction, from a private owner/breeder, or at a claims race.

What do racehorses sell for?

The average racehorse will sell for $75,000.