How Racehorse Ownership Can Be A Profitable Investment

Racehorses have been a part of mankind since the beginning of time. The Romans raced them thousands of years ago and gave rise to legends such as Gaius Apuleius Diocles with his Ducenarius, down to Ecuries Serge Stempniak’s Ace Impact in the 21st century.

Now, this sport has a storied past, one that you might be interested in being a part of. But then, the proverbial million-dollar question: Is there any profit in racehorse ownership? The answer is a huge “Yes!”. Here a few ways how racehorse ownership can be a profitable investment:

Shared Costs Through Syndication and Partnerships

It’s no secret that thoroughbred horses can be quite expensive and taxing to manage, thanks to ongoing costs. Syndications and partnerships take part of that pain away.

How a racing syndicate works is you and other members make financial contributions towards the purchase and all associated costs that come with managing your racehorse (think entry costs, training fees, racing costs, etc.) As a result, each member of the syndicate own a piece of the racehorse.

This means that if the horse wins, the prize money gets shared across board, of course depending on the stake that each member of the syndicate holds. Apart from that, members if the syndicate get all the rights and privileges that a racehorse owner has, including behind-the-scenes access to the stables and stable visits. There’s also owners’ badge for race days and access to the VIP areas. If the horse wins, they get to step into the winner’s enclosure too.

So, in essence, syndication saves you huge ongoing costs that come with horse ownership. Sounds like something you want? Then it may be a good idea to get started with thoroughbred syndicates Australia or others offering the same services near you. This can be a good chance to bring new partners to support your racehorse journey or get a bite of other winners out there.

It Opens You up to Multiple Revenue Streams

Of course, a major source of revenue is prize money. In major races, you can expect to hit highs of a million dollars or more. For example, about 87 races hosted Australia hosted a whopping 87 races in 2023, each worth AUD$1 million (around USD$630,000) or more. Some smaller races out there still pay thousands of dollars. These can go a long way if your racehorse is a consistent performer.

But that’s not the only source of income. There’s also breeding rights to consider. If you’ve got a winner in your stable, one with a strong pedigree, you’re very likely sitting on a goldmine. These ones can command quite a huge fee in the breeding market post-retirement through stud services.

If these two don’t fit what you’re looking for, there’s still auction services to look into. If you have a foal or mare with desirable bloodlines, you can put them out in the market. Depending on their quality, you can fetch quite a fortune.

You Can Get Tax Incentives and Financial Benefits

Death and taxes can be certain, according to Benjamin Franklin, but with racehorses, you may have an advantage. In places like Australia, racehorses fall under the “primary production assets”.

What this means is that you can go ahead and claim deductions for the money you spend on training, travel to races, and even vet fees. This puts you in pole position to make more profit from your horses.

There’s also the depreciation aspect. Your horse shedding value over its racing career can mean offsetting taxable income. Also, if you sell your horse for profit, it may qualify for a capital gains tax concession if held for more than 12 months.

However, keep it in mind that there are rules and regulations in place. Talk to a tax advisor or anyone else who knows the ins and outs of these incentives.

There’s Potential for Sponsorships and Brand Partnerships

If your horse is good enough, you can expect sponsors and brands to come flocking to you for partnerships. These brands are always looking for exposure, and what better way to do that than by hooking themselves up with winning horses?

These brands often range from whiskey to fintech, all the way to automotive and luxury products, so don’t you worry about getting saddled with a company your conscience doesn’t agree with. Comb through any offers you get and go for what works best for you. Even better, consider enrolling the help of brand marketing experts and have them help you make the best of the brand exposure.

Closing Thoughts

Racehorse ownership can be a profitable avenue, that’s not in doubt. However, it’s not something you approach blindly. Make sure you do your homework first. Talk to experts who’ve been at it for a while and let them advise you on the best way to approach this line of business.