When it comes to competitive horseracing, spending $30,000 or more is commonplace. Horses sold for tens of thousands of dollars have the potential to be flipped for several million dollars. Take a look at the winners of the latest Kentucky Derby, the Preakness Stakes, both of which Richard Schibell has attended multiple times, and other top races and you will find the majority of these elite animals sold for eye-opening figures. Though spending these massive sums of money are certainly a gamble, winning horses have the potential to mutlipy the initial investment tenfold or more.
A Numbers Game
Though luck is certainly a factor in horse racing, money is what matters most. Some owners invest hundreds of thousands of dollars each year purchasing and training these world class animals with the hope of developing a profitable winner. There is always the chance for horses sold at comparably low to moderate prices to succeed yet the ongoing costs make this quest quite the uphill battle.
The cost of training at a halfway decent racetrack is typically between $30,000 and $45,000 or more per year. Add in an array of other expenses ranging from racing fees to veterinarian bills and the money adds up quickly. Spreading out costs across the entirety of a group is one of the best ways to decrease costs. Some owners join syndicates to reduce risk, minimize expenses and share with others. However, those who take the solo route have to be properly prepared to make a lengthy and substantial financial commitment. Let’s take a look at the costs associated with raising a competitive racehorse.
The average trainer charges per diem, creating the potential for a hefty final bill. Training rates dip down as low as $70 or so per day at comparably small tracks. However, when this cost is extrapolated across a month, it adds to more than $2,000. Large tracks have the potential to cost more than $100 each day or nearly $4,000 per month.
Certain race tracks are all-inclusive. This means the costs of transporting the horse, boarding, training and maintenance are included in the flat rate. Do not commit to a trainer until you know the specifics of the training costs including the payment structure.
Every racehorse must be registered prior to entering the race. Registration fees are usually in the range of $30 or so to several hundred dollars. Licensing fees differ by state. Entry into a high stakes race is costly, typically starting with what is known as the nomination fee. This fee is put toward the prize money awarded to the winners. As an example, the nomination fee for entry into the T riple Crown ranges from $600 to several hundred thousand dollars. Those who are late to the game pay more than those who meet the nomination deadline.
Your veterinarian is an essential member of your horseracing crew. Unfortunately, vet fees can add up quickly. Some horse owners pay a couple hundred dollars a month in vet bills while others shell out upwards of $700.
Horse owners are responsible for starting and entry fees. These fees are tacked onto the purse money doled out to the victors. This year’s Triple Crown races have starting and entry fees between $10,000 and $25,000.
Horses need the proper footwear just like sprinters and long distance runners. A top-notch farrier is essential. Farriers provide consistent maintenance to the hooves. Plan on spending between $80 and $100+ every month or so for hoof trimming and shoeing. Horses that need specialized treatment for excessively damaged hooves will cost even more.
It is no secret horses cost a pretty penny. If you buy a racehorse, you need insurance. The most popular type of insurance is known as full mortality. This insurance provides the horse owner with a payout that equals the horse’s value on the market even in the event that the animal has to be put down or is killed. Insurance plans typically run between 5% of the horse’s cost for a single year of coverage. Therefore, a racehorse owner that owns a $50,000 will have to pay around $2,500 each year for insurance.
There is also the matter of additional insurance options. Additional insurance is available to protect against natural disasters such as lightning, fire and auto accidents. Certain states mandate racehorse owners take out workers’ compensation insurance for jockey costs causally related to their workplace activities.
After the racehorse owner covers the costs to nominate his horse, enter and start in the race, there is still one more cost to cover: the mount fee must be paid. This is the money paid to the jockey for each race. Mount fees have the potential to be inexpensive yet they are increased for competitive races. As an example, the mount fee for this year’s Kentucky Derby is $500.
The Cost of Buying the Horse
The average cost for a horse around the age of two sold at auction exceeds that of most luxury sport utility vehicles. Two-year-old horses typically cost around $60,000. Weanlings are comparably difficult to evaluate as they are merely a couple months old or a year old at most. Weanlings usually sell for around $40,000. One-year-old yearlings sell for an average of nearly $55,000.
Truly competitive horserace owners will go to the extent of enlisting the assistance of a bloodstock agent. This individual serves as a talent scout, charging around 5% of the purchase price. A trip to the vet is also necessary to evaluate the horse with a thorough analysis of the animal’s blood samples and x-rays. The transaction is completed after the vet gives the horse a clean bill of health.