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Owning thoroughbreds is a Business. If your sole interest is profit, racing horses may not be the best avenue towards that goal. Profit is the objective, but it can’t be the sole motivation. Statistics will show that most racing operations are not profitable. Losing your investment is more the norm than the exception. One should not consider investing in Thoroughbreds if the money invested is not expendable. Some have referred to racing and training horses as a “labor of love”. We love horses. We don’t love losing money.

The responsibility of the trainer is to conscientiously care for, and competently campaign, the partnership assets, with the primary objective being a positive ROI for all involved. Enjoying the experience is important as well. This should be fun for all of us. The acquisition of assets is the initial step in the process of creating a viable racing business. Assets (horses) can be procured in one of several ways. One can breed and raise racing stock. Horses can be purchased at public auction. Horses can be "claimed" from a claiming race. Horses could be purchased privately from current owners and/or breeders.

As can be seen by the "clm" column on our Past Performances page, most races at Golden Gate Fields are claiming races where each horse in the race is for sale at the published price. Funds to purchase the horse are deposited with the track paymaster before the race. At the completion of the race, the horse is escorted to a state run facility at the track where the previous connections relinquish the horse to the claimants. You have purchased a racehorse!

For now, this stable is basically a claiming operation. It would be great to progress to the point where we could buy at auction; for example at one of the Barrett's auctions in Southern California or one of the CTBA auctions in Northern California. With a few exceptions, very few, the “big horse”, (i.e. Kentucky Derby level achievers), are purchased at auction. However, claiming horses can be a profitable first step towards building a racing operation comprised of claiming horses and auction horses. A stable of claiming horses can be enjoyable and profitable.We have had a profitable year here with all claimed horses. The cost of ownership is determined largely by a horses performance on the racetrack. Horses that are racing regularly will offset the cost of ownership by returning money to the partnership.

The trainer, if a partnership member, will have the same financial responsibility as the other partnership participants.

 The trainer understands that keeping the horses in running condition is of paramount importance to the partnerships success. Racing is a “numbers” game. The most successful operations are the ones that have the most horses running. To maximize the number of starts one has, and minimize the costs, owning shares of a few horses is often preferable to sole ownership. All the current horses in this stable are owned in partnership. A trainers fee (called “day rate”) ranges from $60-$80 daily, here in Northern California, to $75-$120 in SoCal. Included in the day rate are the various feeds, performance supplements,tack(bandages/ointments/saddles, etc....), personnel(grooms, riders) and basically everything that isn't veterinary or shoeing.

Day rate does not include veterinary costs, which can vary from horse to horse. A typical veterinary bill, for a horse actively racing, that does not experience an unexpected illness and/or injury, is in the $200-$400 range monthly. Day rate does not include shoeing, which is typically done monthly, at the current cost of $110. A partnership affords members the opportunity to experience the fun and excitement of racing while mitigating the cost of sole ownership. Horses do experience minor injuries and/or illnesses that preclude training and racing, but are not career threatening. A multiple horse partnership minimizes the impact of a horse being momentarily side-lined. Having multiple horses running monthly also allows for us to enjoy racing a few times a month.

There are significant tax benefits to racing horses. Losses incurred in the racing business are applied to non-racing income, lowering ones pre-tax net income. There are other benefits as well. An accountant well versed in equine related tax matters is imperative.  

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