Making Money Racing

A couple of folks have commented on how difficult it is to make money racing horses – be it at this level or any level. Though I addressed it in the “comments” section of a previous post, it probably warrants greater exposure so I’m going to address it here.

There are a couple of things to keep in mind with the Club:

– though we try and make money, the focus of the Club is for it to be an educational endeavor;

– horses further up the class ladder tend to run less often – mostly because there are fewer of them – and are more expensive so we would only be able to run one horse and that makes it difficult to show all we’re able to this way with 2 horses;

I am going to post here a link to a blog from a friend of mine, Steve Zorn, who runs partnerships in New York and races mostly on the NYRA circuit (Belmont, Aqueduct and Saratoga). The thrust of the article is that it has gotten easier to break even in NY with the addition of the slot revenue from Aqueduct. While the costs are more, so are the purses, though not in proportion.

For example, while Steve shows that the costs of training runs about $90 a day and we are only $60 ( a 33% difference) he also shows that open Maiden Special Weight purses are north of $50,000 while we were at $27,000 (a 46% difference). And while purses here have increased wonderfully (Thank you Canterbury Park/Shakopee Mdewakanton Sioux Community partnership), he states that the average claiming purse in NY is about $35 – $40,000 which is a far cry from what our average claiming purse is – maybe $20,000. However you slice it, it’s VERY hard to make money as an owner in this business.

Here is the link:

http://businessofracing.blogspot.com/2012/03/update-cost-of-thoroughbred-ownership.html

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12 thoughts on “Making Money Racing

  1. Very interesting article. I think our Club has done amazingly well this year to have as much as we still do with the limitations we have. We didn’t even start racing until the last day of May and have had our 2nd horse only since July. Nice job Ted and all!

    New question re: Claiming Crown. I believe the concept started at Canterbury? Did any Canterbury horses participate then? Now it seems that it’s always held the end of the year someplace warm. Would a Canterbury horse ever be competitive in it? Or are the claiming levels different from track to track – are $7500 claiming horses the same ability across the country for example?

    • Good question. Though Canterbury didn’t found the Claiming Crown, it was seemingly its permanent host for a very long time – 10 of its first 14 years. From the Claiming Crown website, here is the genesis of the Crown:

      “A partnership between the National Horsemen’s Benevolent and Protective Association and the Thoroughbred Owners and Breeders Association, the Claiming Crown was envisioned to be the claiming horse owner’s Breeders’ Cup; a special racing event, created for the sometime-forgotten “average owner,” and featuring some of the most competitive horses in the country. Every horse owner, regardless of the level at which their stable competes, has an equal chance to participate, as the Claiming Crown is open to all claiming horses irrespective of where they were foaled or race.”

      I do recall that there were several local participants over the years with Derek Bell riding a few winners and Canterbury regulars Percy Schebenske, Tammy Domenosky and Ruth Cook saddling winners as well. One Canterbury Claiming Crown runner in 2009, 4th place finisher Furthest Land, went on to win the Breeders’ Cup Dirt Mile! I do think that each year there are local horses who could possibly compete effectively in the Crown (and have).

      Now, the question of whether or not claimers are the same everywhere… In theory, yes they are. In practice, though, they tend not to be. In general, a $20,000 claiming horse at a major oval will outperform a $20,000 horses at a lesser track. I think it has less to do with the quality than the depth. In other words, Santa Anita will have a plethora of $20,000 – and many more higher making it difficult to climb the ladder while, here at Canterbury, we have considerably less $20,000 horses meaning that it may take less to rise to the top of that heap.

      • Therefore, would it make sense for the Club to claim a horse at Churchill for example or in New York to run at Canterbury?

      • Perhaps, but we’d need to get licensed in that jurisdiction first, find a trainer who is as well and is also willing to claim for us knowing that he or she gets none of the benefit of training the claimed horse. The logistics become a bit more difficult as does the cost (shipping, perhaps a fee for the claiming trainer, licenses) and I would go back to the Club being a not for profit educational experience not a for-profit organization: keeping it simple seems to make the most sense for the Club to fulfil its mission.

  2. Thanks for the post. Interesting article. Would be curious to know how it is decided how many horses the Club ultimately claims? Since we already had 2 low level claimers, it seems to me that we had $$ to buy a third one? While true that there are fewer races for higher level horses, we also found out that it is also sometimes difficult to find races with certain conditions at the lower levels as well. Would be interesting to see the Club simply buy one horse at a higher price tag. With any luck, it could involve moving up to the allowance ranks.

    • I judge that based upon the money collected and the expenses involved. I am VERY conservative when it comes to buying horses for the Club. I always try and assume that we won’t win a single race, factor in the expenses over the year and make sure that much money is in the bank. If our recent streak took place early in the season, I could see perhaps claiming a third horse. As the season moves on, given our charter, it doesn’t make sense to possibly take a chance claiming a horse that we won’t be able to sell off by the end of the season.

      The thought has been kicked around about claiming or buying one horse at a higher level but you may recall the uproar when we didn’t race for nearly a month so we try and balance the education with entertainment.

      If there was enough interest, maybe we could kick around a group with a higher buy in but add the possibility of carrying over horses year to year and being a “for profit” (or try) group. Of course that would also remove the downside protection Club members have since the track ensures that only a one time payment is required.

      • It is true that there was some concern that we didn’t race for a month, and that we didn’t claim Terice until July. However, that was sort of my point about possibly claiming a horse with a higher tag. There aren’t any guarantees that we can consistently find suitable races at the lower levels either. If we have to wait a month between races, at least there is the added incentive that we could be chasing a much higher purse. Thanks again.

      • I can see your point and I don’t necessarily disagree, either. Since the Club isn’t allowed to make a profit I think we made the conscious decision to race at a lower level and more often (eventually!). That said, we did go the higher claiming option with Mundy last season and we swung and missed with her. Ultimately there are no guarantees and I don’t think either approach is wrong. We’ll get with Clay after the first of year, monitor sign ups and maybe shift strategy again next season.

  3. Thank you for the insight. Looks like I’ll stick to the stock market for my investments and horses as a hobby (with the slight chance of a financial return). Still fun though.

    • That’s really the way to look at it, Pete. I know I’ve said this before, but I always tell people that want to join one of my groups: you need to want to enjoy the entire experience; the carrots, the morning works, the strategy, the banter (my groups have closed Yahoo! groups where we kick things around – kind of like this blog but without the world watching!). And, by all means, don’t wrote me a check with you last $2000 hoping to make a huge score!! It should be money that you can treat as disposable and for entertainment. The primary objective needs to be to have fun since, as we’ve seen, it is so hard to make money.

  4. Do we have anybody in minnesota in mind that may be interested in terice if not claimed… I feel like with the extra purse money for minnesota Breds that there would be a line for the horse of the year at canterbury. Your thoughts ted?

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