How To Own A Race Horse

Owning a standardbred race horse is an exciting and rewarding experience. There is nothing like the thrill of watching your own horse charge into the stretch and cross the finish line a winner. Whether you breed and raise a foal (newborn horse), acquire a yearling at auction, or purchase a horse that’s already racing, participating in the harness racing industry as an owner can be an incredibly fun investment, hobby, or business.

Many owners come from the ranks of harness fans and bettors. If you have spent any time at the track, you no doubt have seen the thrill and excitement on the faces of owners in the winner’s circle. There’s no substitute for the pride and satisfaction an owner takes in their horse’s performance. Like any competition sport, harness racing can be challenging, but most owners will tell you that the rewards are priceless.

How do you get started? There are many options for participating as an owner in the great sport of harness racing. They range from arms-length ownership strictly as an investment to full-immersion, hands-on ownership where you do much of the work necessary to race your horse. Choosing the type of horse ownership that’s right for you is an important first step.

Equally important is to fully understand the costs, expectations, and risks involved in owning a racing pacer or trotter. Whether it’s a business, hobby, or investment that you seek, know at what level you can afford to participate and learn how to manage and influence the costs associated with the ownership.

You should also decide, in advance, what level of involvement you want to have. Do you prefer to rely entirely on your trainer for decisions about the conditioning and racing of your horse? Or, do you want to actively participate in the care, training, and racing of your horse in partnership with your trainer? Various levels of involvement are possible – you just need to find the trainer that’s the right for you.

Some trainers prefer to partner with owners who simply pay the bills and come watch their horse(s) race. Others trainers are happy to work with owners who want to be involved – from cleaning stalls and feeding to helping paddock your horse at the track – even jogging or working out the horse.

Once you’ve decided on the level of involvement with which you’re most comfortable, it’s time to find a trainer who is a good fit for you. Location is important, especially if you desire hands-on participation. But finding a trainer with whom you’re comfortable is even more valuable. After all, owning a horse is a commitment and, like a marriage, it will be a much more enjoyable experience if you and your partner get along well.

How do you find the right trainer? There are approximately 250 licensed trainers in the state of Michigan. Some don’t train horses for others, but most do. Your first step should be to contact the MHHA. We can give you an idea of which trainers are in your part of the state and provide you with some background and contact information. Call a few trainers and talk to them about their training operations. Let them know what type of horse ownership most interests you. If you like what you hear, schedule a time to visit their stable, spend some time, and observe the operation. Even speak with other owners, if you have the opportunity. The better job you do exploring the possibilities, the more likely you will get what you want out of horse ownership.

One of the considerations when selecting a trainer is deciding whether you want to own a trotter or a pacer. Of course, that refers to the stride or ‘gait’ a horse uses to get around the track. Horses are bred to perform best in one gait or another. Generally speaking, trotters are a little tougher to train, but they race for slightly higher purses. If you look in any program, you’ll see how many of each type are raced on a typical night’s card and the size of their respective purses.

Trainers sometimes specialize in either pacers or trotters. Having that specialized knowledge is valuable, but a mix of pacers and trotters also has its advantages. To be successful, your trainer needs to be able to enter your horse often enough for you to make money. Since eligibility is limited by the ‘conditions’ required for entry, finding a trainer with the right number of trotters versus pacers and young versus experienced horses will ease the challenge of getting your horse entered to race on a regular basis. The fewer horses in your trainer’s stable that are competing for spots in the same types of races, the easier it is to find opportunities to race.

Your trainer also must have the ability, and be willingness, to take your horse to where it needs to go to compete and make money – colt stakes (fair races), in or out-of-state pari-mutuel tracks – even outside the country, if that’s where your horse fits best.

You may decide to ease into the ownership experience slowly – and that can be a smart approach. There are many trainers who can offer the flexibility that will let you grow into the sport. Many great trainer/owner relationships have started small.

Whatever approach you decide is the right one for you, take the time to consider ALL aspects of horse ownership and get to know your trainer well. That combination of knowledge and teamwork will help ensure a pleasurable and profitable experience.

 

Ownership Options

Several legal entities are able to own horses and understanding the various ownership types is very important for new owners. The ownership form you choose can have business, investment, and tax implications. The following information will introduce you to the various forms of ownership but, as with any investment or tax decision, it is recommended that you consult with your legal and/or tax advisor before deciding which is right for you.

• Sole (Individual)
  • As the name implies, individual ownership means you are the only owner of the horse. You pay all of the bills, take all of the risk, and keep all of the purse money earned. Sole ownership is the simplest form of ownership because you, along with your trainer, call all the shots.
• Partnership
  • In partnerships, each of the partners share the bills, share the risk, and share the purse money earned. Partnerships can either be balanced (50/50, 33/33/33) or unbalanced (50/25/25). One advantage of partnerships is that they offer owners, who might not otherwise be able to afford it, an opportunity to own a part of several horses. By spreading your investment across several horses, your chances of reaching the winner’s circle are improved.
• Limited Partnership
  • No one likes to lose their investment, but some are more risk-averse than others. Limited partnerships were created to cater to those who want to invest in horses, but also want to limit their downside risk. In limited partnerships, you invest in the racing career of a horse and a managing partner makes all of the decisions for you. If the horse is successful, you share in some the profits according to the terms of your partnership agreement.
• Corporate
  • With corporate ownership, the corporation owns the horse(s) and is a separate legal entity from the shareholders who own stock in the corporation. Shareholders can come and go without affecting the legal ownership of the corporation’s horses. This type of ownership can provide tax and liability benefits not available through other types of ownership.
• Limited Liability Company
  • This form of ownership combines some of the attributes of both partnerships and corporations. Limited liability companies provide their shareholders with many of the same liability protections available through corporations, but they are usually simpler to set up and come with less governmental overhead.
• Leasing
  • Though not technically a form of ownership, leasing a horse is a way to ‘rent’ and control a horse’s racing career for a specific period of time. When you lease a horse, you take on all responsibility and risk and share, on a proportional basis, any money earned by the horse with the owner. Rules governing the leasing of horses are available on the United States Trotting Association website (http://www.ustrotting.com).

Ownership FAQ

• How much does it cost to purchase a horse?
  • The price of a horse can range from a few hundred to more than a hundred thousand dollars. Claiming or buying a horse that’s already racing is a less risky way to start because you can look up the horse’s past performance. Check out the claiming races in a recent program for claiming prices or auction results from the latest sale. It’s relatively easy to figure out a horse’s value simply based on what it’s capable of earning.

    Buying a young horse is more speculative. The potential rewards are greater purchasing a yearling or breeding your own and raising a foal, but the risks are greater as well. Some horses simply don’t have what it takes to race. A good quality yearling can be bought at auction for $3,000 – $10,000. But keep in mind that the expenses of training, feeding, and caring for that horse until it races will add to your cost.

• How do you pick a winning horse?
  • Finding a good horse at a fair price is part experience, part science, and part luck. When purchasing a yearling, breeding and bloodlines are important, but evaluating a horse’s conformation is also critical. An experienced horseman can judge a horse by its physical attributes and “the way it moves.”

    Yearling videos have become very popular in recent years, because they provide prospective buyers the opportunity to see a horse in action prior to the sale. Breeders know that not every trainer can get to the farm to see a particular yearling, so they make video available for each year’s crop.

    Many experienced horsemen will tell you that “breeding is everything.” Winning stallions bred to good mares with a history of producing winners is the basic recipe. There are no guarantees, but it’s a good predictor that has been proven over time. Auction sales catalogs provide several generations of relatives including their past racing performance and earnings.

    If you want to purchase a horse that’s already racing, whether at auction or by claiming it, be sure and do your research. There are bargains to be had, but it can be a tricky business. Everyone believes they can do better with a horse and improve its performance. Smart buyers spend what a horse is worth now, not what it ‘might’ be worth down the road.

• How much do trainers charge?
  • It depends on exactly what services your trainer will provide. In a traditional owner/trainer relationship, the trainer provides all care, training and nutrition for a monthly rate of $750 – $1,300. Vet bills, stake and futurity payments, medications, shoes, transportation, and other miscellaneous expenses can add to that monthly cost.

    Some trainers are willing to structure a rate based on you providing all, or some, of the basic care for the horse. Cleaning the stall, feeding and watering, grooming, even exercising – once you’ve learned the ropes – are things you can learn to do which can help keep your costs down. Not all trainers are able or willing to accommodate such arrangements, but some will.

• How do I know if a particular trainer is right for me?
  • Any good trainer should be willing to discuss their philosophies about care, training, and racing. It’s also smart to speak with other owners to gauge their experience with a particular trainer.

• What questions should I ask a prospective trainer?
  • In what type of horses do you specialize – yearlings, claimers, pacers, trotters, etc.? How much is your daily training rate? What does it include? What is additional? How much are average vet bills? Are you willing to share some typical monthly invoices? How do you typically communicate with owners – regular updates, only when they stop by the stable, or on race nights at the track? Everyone operates a little differently and it’s important to understand how before you make the decision to partner with a particular trainer.

• Can I change trainers after I’ve purchased a horse?
  • Yes, but depending on the type of ownership path you’ve selected, it can be tricky. If you own 100% of the horse and decide to switch trainers, it’s usually as simple as finding a new trainer who will take your horse and notifying the current trainer of your intentions. If your horse is owned by a partnership, the other partners either need to purchase your share of the horse, or sell it (at auction or otherwise) and divide the proceeds accordingly.

• What if I decide that I no longer want to own a horse?
  • All of the ways you can acquire a horse – auction, private sale or claiming – can be utilized when you decide that you no longer want to own a particular horse. Hopefully, the horse will bring more than you paid, but it’s ultimately only worth what someone else is willing to pay for it based on its performance and earning potential.

• Where will my horse race?
  • If you’re a harness fan, you probably frequent race tracks near your home and wonder what it would be like to watch your own horse to race there. Like most sports, there are various levels in harness racing and purse money varies from track to track. Ultimately, you and your trainer will race your horse where it can best compete. And by compete, we mean race fast enough to win part of the purse money. Like in baseball, the goal is to make the majors, but not every horse will have what it takes.

• Should I choose a pacer or a trotter?
  • Pacers represent approximately three out of four harness race horses. There are more opportunities to race pacers, but the purses for which they race tend to be lower. Because of their sheer numbers, you are more likely to find a pacer at the right price. They are also less prone to go off stride or ‘break’ and during a race.

    Trotters have a beautiful stride and generally race for slightly higher purses than pacers. However, they are considered a little more difficult to train and are more likely to break during a race. Trotters are a source of great satisfaction to their owners, but require a little more time and patience.

• How does claiming a horse work?
  • Look at any racing program and you’ll see plenty of claiming races. Depending on the track, claiming prices can range from a few thousand to tens of thousands of dollars. It all depends on the quality of horses racing.

    The career path of many race horses starts with stake and futurity races at two years old – primarily at fairs. At three years old, most horses start competing in ‘condition’ races at pari-mutuel tracks. Condition races set certain criteria for entry – usually based on the number of races won or the amount of purse money earned. As your horse wins more races and earns more money, it must “move up in class” and compete against better horses.

    Eventually, after winning enough races or earning enough purse money, many horses are raced in claiming races. At that point, horses are entered in races based the “claiming price” or amount for which others can purchase the horses in the race. Claiming races are a way balance the competition and provide opportunities for veteran horses to race.

    Licensed owners or trainers can claim a horse simply by contacting the Race Secretary at the track prior to the race. The buyer completes some paperwork and pays the claiming price applicable to that particular horse. Once the race has started, ownership transfers and the person claiming the horse must take possession once the race is over. The previous owner(s) keep whatever purse money is earned during the race.

    The specific logistics for transferring the horse vary slightly from track to track, but the buyer must be prepared to care for, and transport, the horse after the race. It can be an emotional time for the previous owner, especially if they have never had one of their horses claimed. Generally, track officials are on hand to supervise the transfer.

    As the new owner, you can turn right around and enter your new horse to race the following week. In fact, many claimed horses will show up in the same claiming race the next week. It’s not uncommon for the previous owner to claim the horse right back the next time it races in a claimer. A common requirement is that claimed horses may only be raced at the track where they were claimed for a certain number of days. That rule is intended to help control the availability of eligible horse or “horse supply” at each track.