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Start a Horse Racing Business

Horse racing is no business for the timid entrepreneur. It is a serious business that requires big capital investment and can give large payoffs if you can produce a champion.

If you have solid financial backing and a passion for horses, then you might be interested in starting your own horse racing business.

Arm yourself with more knowledge on how to breed, raise, train and race horses. You can even join schools with great equine programs like the University of Kentucky and University Arizona. Subscribe to magazines and newsletters, attend seminars, auctions and watch competitions, and even earn yourself a degree in horse racing.

Write your business plan. You have to lay out a plan on how you will get the funds or attract investors, your business goals and strategy to achieve them, the staff you need and their salaries.

When choosing your headquarters, you can either buy or lease a ranch for the horse stables, exercise area and practice racetrack. An adequate size for a start-up business is from 50 to 100 acres. Of course, a bigger space is much better if you can afford one.

When buying horses, you have two options. You can buy descendants of champion horses, hoping they will also become good racers. You can also choose a strong horse for breeding, hoping you can turn it to be a champion. If you choose one with a championship bloodline, it will cost you hundreds of thousands of dollars. On the other hand, a stock racing horse can sell up to several thousands of dollars.

Your business model will dictate the staff that you need and their corresponding salaries. You may need stable hands to feed your horses and clean the stalls, trainers to exercise and turn your horses into good racers and a veterinarian to make sure your horses are always in good condition.

It is good business sense to connect with other horse racing entrepreneurs by joining associations. Join the National Thoroughbred Racing Association (NTRA) and other state-level racing groups. Being part of the state-level associations can help you enter your horses into races much easier.

How to get a Horse Racing Business License

A license makes your business legitimate. You can apply for one at The Racing Commission of your state whose office can often be found at the local racetrack. You need to fill up a form, have your photograph and fingerprints taken, and pay a fee ranging from $10 to $200. You can also secure a copy of the racing rules and regulations there.

Take note your license is only valid in the state where you applied for. If you wish to race in different states, you must acquire licenses from those states. Moreover, determine if your state require a sales tax license when selling horses. Some states do not impose agricultural sales tax, wherein horse sales can be considered under agricultural sales.

Forms of Doing a Horse racing Business

If owning the entire operation of a horse racing business seems to be overwhelming for you, you can invest in a particular race horse from another ranch. Here is a look at your options in entering this industry.

Sole proprietorship – is the least complicated and least expensive form of business to maintain. A sole proprietor has to raise the capital by himself. Whatever income or losses that he incurs in the business will reflect in his personal financial statement for tax purposes. The good news is limitations on deductibility are present when the owner does not materially participate in the business operation. Seek advice from a tax consultant for more details regarding this.

Partnership (general or limited) – is a venture entered by two or more individuals. These partners share in the raising of capital, property, expertise and effort, as well as income and losses. Be very careful when you enter into a partnership and always have a formal written agreement before investing anything.

Corporation – is more complicated than the first two. Incorporating this separate legal entity must meet certain legal requirements. Raising capital is done through issuance of shares among its shareholders and fall under lower income tax rates. Shareholders also have limited personal liability.

Syndication – is being used for many years in the horse industry. The most common type of syndication is the stallion breeding syndicate. Here, owners buy shares that entitle them to a breeding every year during the stallion’s lifetime. They can sell onetime breeding rights or sell their share outright.

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7 Comments

  • Vuyo said on May 8, 2013
    we are interested on horse racing business, business plan & structure. we are in South Afric, Eastern Cape, Tsolo
  • JOHN E ROBERTS said on May 12, 2013
    Hello, I am interested in horse race business and I would like your expert advice on writing up a business plan to back it up. Can you help me? I equally would like to know if you can help me with writing a business plan for a Tablet pc, a new perfume and bottled water business?
  • fabian sultan said on October 15, 2013
    Hello I am interested in going in to a partnership in a horse racing business. And I need to write up a business plan to make it look professional to get investors. Can you help me?
  • peter said on October 4, 2014
    i would like a partner to venture into horse racing in kenya, currently there is only one racing station here and it would be a profitable venture here.
  • chipo shabani said on October 12, 2014
    i would like a partner to venture into horse race track business in BOTSWANA Currently there are no race courses operating for profit.
  • chipo shabani said on October 12, 2014
    i'm in a process of acquiring land at MAUN a place known for its reaches in world life tourism.
  • daniel said on February 21, 2017
    Hi @Peter, How you want to ho into a partnership with some one. Doing what

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