‘Anticipation, fascination, exhilaration, jubilation’
Owning a racehorse will fill you at least with some of those emotions – maybe all of them.
Watching your horse carry your colours can be the thrill of a lifetime, an unforgettable, fulfilling experience like no other.
The racing game offers high risk, high emotion and high excitement. It is highly speculative; money is won and lost, but an amazing time can be had in the process.
And the great thing is that almost anyone can enjoy it. Owning a horse is no longer the preserve of the elite, a pastime associated with royalty and captains of industry. Especially not in Australia.
Whatever your budget and whatever your appetite for risk, racing a horse is within your reach.
And getting involved, for a lot or a little, has never been easier – and never more rewarding.
For the price of the average household appliance you can become the part-owner of a horse.
Types of Ownership
One of the most important decisions for any would be owner is what level of commitment they want; are they happy to pay all the bills for a horse in order to make all the decisions about its future? Or does somebody want to take only a small percentage of a horse and reduce their level of risk?
Owning a horse outright means you get to make all the decisions yourself, though unless you are an expert on racing and breeding you would be well advised to consult with a trainer or bloodstock agent.
As a sole owner you will collect all the prizemoney your horse wins and enjoy any upside in residual value if the horse becomes a champion. But conversely, you will also be liable for all costs yourself.
Given the costs involved, from a financial perspective this the riskiest type of ownership. However, there are many people who choose to only own racehorses by themselves. For them, the ability to make all decisions about a horse’s career; from who will train that thoroughbred through to having a say in which races it will run in and who will ride are vitally important.
This allows you to enjoy all the excitement of sole ownership while also sharing the bills. Partnerships are the most common types of ownership in Australia and are a great way to get involved with a group of likeminded friends.
Members of a partnership of up to 20 get to see their names in the racebook, entry to the members’ area at the track and, depending on individual race clubs, access to the mounting yard so you can be there when your jockey gets mounted before the race.
Many first time owners decide to get involved through partnerships, encouraged by the proportionally lower level of capital expenditure to buy a share and the reduced ongoing expenses compared to sole ownership.
If you can’t organise enough friends who share your dream of racehorse ownership, many trainers will organise partnerships to own horses they recruit to their stables (see the role of trainer).
However, if you do decide to form a partnership with people you know, you will have to decide on a managing part-owner who will handle communications with your trainer and other housekeeping issues. It’s possible for individual invoices to be sent to each partner by the trainer, transport companies, vets and other suppliers.
Many very successful owners choose to take shares in many horses rather than race one or two horses outright. Owning 10 per cent in 10 horses obviously gives a greater chance of finding a very good horse than racing one horse and paying all its costs.
Another benefit is sharing the anticipation and excitement of ownership – having friends to share a champagne with when your horse triumphs.
Syndication is fast becoming the most popular way for new entrants to participate in ownership.
Essentially a licensed syndicator will sell shares in horses they own, with people buying different percentages of that horse (five per cent or 10 per cent shares are most common).
These syndicators are running a business; they will purchase horses, typically at yearling sales, and will usually generate income from some or all of the following: charging management or administration fees, taking a percentage of prizemoney winnings, and retaining a share of the horse when it is sold.
Syndicators need to have an Australian Financial Services License themselves or be an “approved promoter,” which means they use somebody else’s licence. Both syndicators and approved promoters need to adhere to rules put in place by the Australian Securities and Investment Commission. One of the most important of these rules is the requirement to provide a product disclosure statement which will include details of the horse, where it was bought and for how much, an outline of fees, information on how decisions regarding the horse will be made and details of what your ongoing costs will be. Before investing in a syndicate it is prudent to ask for and read the product disclosure statement (including the small print).
In the meritocratic world of racing, the success of these syndicators depends both on the performance of their horses on the track and their ability to service their clients (owners), enabling them enjoy the ownership experience. Many people keep returning to syndication as a form of ownership as it is relatively stress free (the syndicator will take care of all administration issues) and relatively inexpensive, though it is worth noting that as part of a large group your voice might not always carry the day when it comes to decision making.
Syndicators have proved incredibly successful in recent years, with horses owned this way winning the biggest races in Australia, including the Golden Slipper, the Newmarket Handicap, The Blue Diamond, the Epsom Handicap, McKinnon Stakes, the Flight Stakes and many other group one races.
While this isn’t as common as other types of ownership, leasing a horse has several advantages, the most notable being no up-front outlay (typically).
Most leases are made available by breeders who wish to keep a horse to breed from at a later date and are happy for others to enjoy the benefits of ownership while meeting the training fees and other day to day fees. While there is often no initial fee to lease a horse, it is common for a percentage (often 20 per cent) of any prizemoney to be paid to the owner.
How much does it cost to buy a racehorse? The only possible answer is “almost anything.”
Most horses get sold prior to racing when they are between 18 and 22 months (see sales section) as ‘yearlings’ where the cost of purchase can range from a few thousand dollars to well over $1 million.
But a big purchase price is no guarantee of ability. Horse racing history is made up of bargain buys that have gone on to become champions and expensive horses that have failed on the track. The world’s most expensive yearling, called Snaafi Dancer, was sold in 1982 for US$10.2 million. Unfortunately he was too slow to even make it to the racecourse and, when his owners tried to breed from him, it turned out he was infertile too.
In Australia there are countless examples of inexpensive horses enjoying great success. Takeover Target was bought for just $1,250 before going on a wining spree which saw him triumph at Royal Ascot and earn over $6 million in prizemoney. Champion sprinter Buffering cost just $22,000 as a yearling and has earned his connections $7.2 million and counting, while Polanski was sold for $4,000 and won in excess of $1 million.
But a horse doesn’t have to become a superstar to repay their purchase price. With prizemoney levels in Australia being some of the highest in the world, if a horse stays fit and healthy it can recoup its owners’ outlay.
Each sale is different: some with more expensively produced horses and some with buyers with bigger or smaller budgets, but even at the most expensive sales by average price (such as Magic Millions January and the Inglis Easter sale) there are regularly horses that sell for less than $20,000.
During the 2014/15 racing season there were 72 Group One races, the highest standard of racing in Australia. Of the 61 horses that won these races, 41 were sold as yearlings at an average price of $196,000. The owners of all of these horses would have made a handsome profit based on the average investment.
It is also possible to buy a racehorse which has already run, either privately or at a ‘tried horses’ sale’. While this allows buyers to assess the form of the horse involved, your chances of finding a horse that can win regularly at metropolitan level (ie at major racecourses like Flemington, Randwick, Doomben) are limited as the previous owners and trainers have usually assessed these animals ability before sending them to the sale.
How much will it cost to keep a horse in training? The simple answer is, ‘it depends’. Who trains your horse, how successful they are, where they are located and whether or not your horse gets injured will all play a significant part.
However, if you decide to become an owner one of the few certainties is that you will soon be paying the upkeep for your horse (unless you pay an up-front amount which includes expenses).
Should you buy into a young horse this is likely to start even before it enters the stable of its trainer. Most young horses are ‘broken in’, where they get used to being ridden, and do their basic fitness work away from the hustle and bustle of a racecourse before being sent to their trainer.
As mentioned, what a trainer charges in fees will depend on the variety of factors. A useful general rule is that the more successful a trainer, the more they will charge. Similarly, trainers who are based in capital cities on courses like Flemington, Caulfield, Randwick and Rosehill will be more expensive than those who train in the country.
But this doesn’t mean the more expensive trainers (or even the more successful) are running a big profit from these fees.
While the upkeep of a racehorse can seem expensive, most trainers are barely meeting the costs for the services they provide. Looking after a racehorses is a hugely labour intensive activity; for example, a horse may have different people to groom it and tend to its needs, another to ride it and yet another person who cleans up its stable. Then a trainer is likely to have office staff to help with their admin and communications. Imagine the task of organising the transport logistics for 200 horses constantly being taken to and from the races and then in and out of pre-training and spelling.
There are a number of larger trainers in Australia who have more than 100 members of staff on the payroll at any time.
As you’d expect, the costs involved (wages, housing) in running a stable in Sydney or Melbourne are considerable more than those in other places.
It is well worth checking with a trainer what costs are included in their daily fees (some trainers may charge more for your horse to have a new blanket and its own tack) and what their typical costs are for a year before choosing which trainer to look after your horse.
Here is a guide to typical training fees across Australia:
|State||Metro Trainer*||Metro (month avg)||Country Trainer*||Country (month avg)|
(*These are estimated annual average training fees)