We know from experience that anyone interested in owning a race horse has many questions and concerns. This section of the Ontario Racing website provides basic information and advice for new race horse owners or anyone contemplating purchasing a race horse.
The best advice is - before making a race horse investment - investigate thoroughly, ask questions, read trade publications, review related websites, attend racetracks and make calls to industry related organizations.
There are many ways to be involved in ownership, sole ownership (owning 100% of a race horse), fractional and syndicate ownership (owning a percentage or shares of a race horse with a group), leases and partnerships. Preparation, continuing education and common sense will help you to make a qualified and informed decision about race horse ownership and increase your chances for fun and success.
Memberships and Licences
Any person or corporation participating directly in Ontario Standardbred horse racing must become a member of the breed-related racing organization:
- Standardbred – Standardbred Canada
All persons participating in horse racing in Ontario must be licenced by the Alcohol and Gaming Commission of Ontario (AGCO).
The racing of horses can be a hobby, a sport, or entertainment, but because of the gambling aspect, it is a very heavily regulated business. Failure to disclose any financial interest in a horse can result in fines and suspensions.
Choosing a trainer
Here are some considerations when choosing a person to train your race horse.
- What type of horse does the trainer specialize in: i.e. claimers, stake horses, young horses, pacers vs. trotters?
- How many horses does the trainer currently train (how big is the stable)?
- How many staff members does the trainer employ?
- How much time do you expect a trainer to spend with you?
- How often do you expect a trainer to communicate with you?
- How often and under what conditions do you wish to be consulted?
- Would you like your trainer to attend sales and assist in making horse purchase(s)?
After you have done your initial research, talked to informed people, met several trainers and checked out their stables, and discussed billing practices, you should have a good indication of which trainer would best suit your needs.
Training costs
One of the most important questions to ask a trainer is how much they charge and how much it costs to keep a race horse. Training fees depend on where you race, where your trainer's facility is located, the vet and blacksmith (farrier) they use and the health / soundness of your horse. Training rates are usually based on a daily rate plus training related costs. A trainer's daily rate is usually invoiced monthly. This fee buys you the trainer's services, training activities, feed, bedding, daily regular care and the services of a groom. Your horse will require certain equipment and supplies like race and training equipment and stable essentials (water and feed tubs, combs, stall wraps, blankets / coolers). Additional expenses are separate from the daily training rate and may include the following:
- Vet charges
- Vitamin and feed supplements
- Therapies such as chiropractic, massage etc.
- Shipping to and from the track for qualifying and racing
- Paddock fees (staff required at the racetrack)
- Stake payments
- Race entry fees
If your horse finishes in the top five in its race, a percentage of the purse money is divided between the trainer of the horse, as well as the jockey or driver.
Buying a racehorse
Your initial investment will determine the type of horse you are buying and your ownership. This is something you should discuss with your trainer. Ownership can be individual or shared depending upon the amount of your investment and the amount of control you want over your horse’s career and expenses.
Multiple ownership is very common in horse racing. Many new owners will obtain a partner or partners to share the cost of a race horse. Some trainers prefer to own a portion of a horse that they are training. Some trainers purchase horses and sell shares to owners.
The advantages of multiple ownership are that you can purchase a horse of higher quality than you could afford yourself. Training fees are shared by the ownership group and the investment risk is minimized.
When considering a partnership type of racehorse ownership, it is important that you and your partners have a common understanding, goals and plan for the jointly owned horse. An agreement prior to the horse purchase is strongly recommended.
Taxation
The tax rules relating to the business of horse racing vary considerably from other businesses. The most important taxation considerations are:
- Reasonable expectation of profit
- Deductibility of losses
- Calculation of profit and loss
Whatever level of race horse ownership involvement, an owner should keep records of all income and maintain proper receipts of expenses. Tax rules are complicated and a new owner is advised to seek out the assistance of a professional that is knowledgeable in industry tax matters.
Overview
Racehorse owners come from all walks of life and every economic level. It is a unique sport. Owners share a common interest – the love of an exciting sport and the beauty of the animal. There are many incredible ownership success stories. Of course, like any business, horse racing has risks. A realistic hope would be to recoup the money invested. The dream of owning a race horse is universal. A lot of people have turned the dream into a reality and have had a lot of fun doing so. Using common sense and every available resource available will help you realize your dream.
Good Luck!
Industry Resources