How much does it cost to own a racehorse?

The answer – it varies a lot, but you might be pleasantly surprised at just how affordable “The Sport of Kings” can be. We like our owners to enjoy their horses without stressing about the cost. So, we’ve provided some insight into how much it costs to own a racehorse trained by Bateup Racing. We hope this helps with your budgeting and allows you to pitch your involvement at a level you are comfortable with.

The main factors contributing to the net cost (or profit) of owning a horse over its racing life are:

  • The size of your share
  • The initial purchase
  • The cost of upkeep.
  • The amount of prize money your horse earns
  • The length of its racing life
  • It’s sale price (if any) when it retires from racing

The size of your share

Depending on your budget, shares can be as little as 2.5%. Many clients prefer to have smaller shares spread across several horses. Of course, if your horse turns out to be the next Winx, it would be best to have as large a share as possible! Whether you prefer spreading your budget across a number of horses or taking the potentially higher reward/higher risk approach of larger shares in a smaller number is up to you.


The initial purchase

When you join us in racing a horse, you will normally pay your share of the purchase cost plus any upkeep costs incurred between the time the horse is purchased and when you buy your share.


The Cost of Upkeep

Many inputs go into the development and training of an equine athlete. Some of the main costs include breaking in; participation in incentive schemes like BOBS; spelling; training fees; track fees; transport; veterinary and racing costs.

These upkeep costs vary considerably. They will be lower when horses are spelling and higher when they are in work. Costs also tend to be lower for young horses which spend more time in the spelling paddock but higher for horses racing which have extra costs like race day transport and strappers. Horses that suffer injuries may require significant veterinary treatment and costs.

At Bateup racing the upkeep cost of a sound, mature racehorse was typically around $42,000 pa over the past 12 months. If you owned a 5% share, your cost would be about $175 per month on average. A 2.5% share would average around $88 per month.

Upkeep costs for a young horse in the education phase of its career would be about $33,000 pa. At this stage of the horse’s development, a 5% share would cost about $137 per month on average. A 2.5% share would be around $69 per month.

Again, we stress that these figures are subject to substantial variation depending on what happens with each individual horse and are also likely to change over time.


Keeping it simple with a single bill

Many inputs go into the development and training of an equine athlete. Some of the main costs include breaking in; participation in incentive schemes like BOBS; spelling; training fees; track fees; transport; veterinary and racing costs.

At Bateup Racing, we pay all the service providers on behalf of owners and send you a single, itemised monthly bill. This saves owners the hassle of having to pay multiple monthly bills to agistment farms, vets and transport companies. It also makes it easier to keep track of your costs.


Prizemoney

Owners receive 83.5% of race prizemoney from Racing NSW. The rest is paid as an incentive to trainers, jockeys and stable hands as well as contributions to the jockeys and equine welfare funds.

If a horse is registered for the BOBS incentive scheme, owners receive 71.1% of bonus payments with the balance paid to breeders, trainers and jockeys.

It’s true that mature horses that are racing have higher costs. But the flip side is that with luck, this is also the time when they will be earning prizemoney. In that case, your overall net expenditure will fall or even turn to profit as your horse’s racing career develops and prizemoney receipts begin to offset upkeep costs.


Length of racing life

From a budgeting point of view, the time it takes a horse to earn its prizemoney comes into play. A horse that earns $200,000 over 2 years will have much lower upkeep costs than one which earns the same amount over 5 years.

One aspect of this is how long a horse takes to mature and realize its prize money earning potential. Early maturing horses that can start earning prizemoney quickly mean your initial upkeep costs might be lower. However, it pays to be aware that this kind of horse tends to cost a lot more at the sales and might well be more expensive overall.Our policy is to take each horse as it comes, giving it time to mature at and develop at its own pace. Later maturing horses that are not pushed early often have the advantage of sustaining long and fruitful careers giving their owners years of racing fun.


Residual Value

From a budgeting point of view, the time it takes a horse to earn its prizemoney comes into play. A horse that earns $200,000 over 2 years will have much lower upkeep costs than one which earns the same amount over 5 years.


Can you make a profit from racing horses?

From a budgeting point of view, the time it takes a horse to earn its prizemoney comes into play. A horse that earns $200,000 over 2 years will have much lower upkeep costs than one which earns the same amount over 5 years.

It’s a definite possibility for individual horses. But realistically for most owners, racing is a hobby where prizemoney helps reduce the costs. Of course, that doesn’t stop us all hoping we might live the dream of owning a champion horse that goes on to be a major success at stud, securing our financial future in the process!


Bringing it all together in a budget

The budgeting problem is that it’s impossible to forecast a horse’s prizemoney earnings which may range from absolutely zero to hundreds of thousands or even millions.

A conservative approach is to be comfortable you can afford a possible worst-case scenario for your new horse. That might be that you spend the purchase price and 3 years of upkeep, but your horse earns no prizemoney. This way, if your horse is successful it’s a “bonus” that either reduces the cost of your hobby or allows you to increase the size of your stable.

Experienced owners, with shares in a number of horses of racing age in their “stable” can reasonably be a bit more generous with their prizemoney expectations and conservatively budget to receive an amount of prizemoney each year, depending on the type of horses they own.

Finally, just to give you a sense of how all these numbers might fit together, let’s look at one hypothetical example of the net cost to own a racehorse over its racing life.

Let’s make some assumptions about our horse “Budget”

  • He was knocked down for $20,000 plus GST at auction
  • He’s a sound, middle distance gelding who races until he’s 7 years old, giving his owners years of racing pleasure
  • He’s a talented horse that amasses $300,000 in prizemoney
  • He’s registered for BOBS and BOBS Extra Bonus
  • He retires sound and is given to a good home at the end of his career.

“Budget’s” Lifetime Record


Total5%
Prizemoney $300,000 @ 83.5%$250,500$12,525
Bobs Bonus Payments$44,000$2200
Sale Price0
0
Total Earnings$294,500$14,725



Purchase including GST & sales costs$24,000$1200
First year upkeep$33,000$1650
Next 5 years upkeep @ $42,000 pa$210,000$10,500
Total Costs$267,000$13,350



Lifetime Profit$27,500$1375

Our grand old stager has made his owners a profit of $27,500. If you owned 5% of him, you would not only have had years of pleasure but earned a little bonus of $1375 to boot.


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