Most people don’t know that horse racing, is in fact one of the oldest sports on the planet that dates back to Ancient Greece. Throughout the years, horse racing has developed into a widely popular sport reserved for the elite.
When you think about horse racing, money is the first thing that comes to mind, especially when you consider the types of horse racing bets that exist.
It is considered a prestigious sport with huge prize purses, and horse values that go up to $70 million dollars.
Since we talk about a sport where even small races can bring hundreds of thousands of dollars to the winners, we start to wonder, how much money is actually involved in horse racing.
Let’s find out.
Money in Horse Racing
The multi-billion-dollar horse racing industry makes money in a number of ways, including through race purses, breeding, and wagering. This article will examine the various ways that the horse racing industry makes money, as well as how the industry affects local economies and the global economy.
Race Purses and Prize Money
Race purses and prize money are one of the major sources of income in the horse racing sector. The money given to the winning horse and its owner at the conclusion of a race is known as the race purse. The top finishers in a race receive prizes in cash.
Depending on the race, different amounts are given as purses and prizes. For instance, the Kentucky Derby, one of the world’s most prominent horse races, offers a $3 million prize pool, with $1.86 million going to the victor. On the other hand, a local race at a lesser track might only have a few thousand dollars in prize money.
The National Thoroughbred Racing Association (NTRA) estimates that more than $1 billion in race purses and prize money were distributed by the American horse racing industry in 2020 and this number continues to grow as horse racing becomes more popular.
Breeding horses is a key additional revenue generator in the horse racing sector. Horse breeding is the process of mating two horses to create foals (baby horses). Producing foals with the ability to excel in the sport of horse racing is the aim of breeding.
Horse breeders can make money by selling their offspring to other horse racing organizations and by charging other breeders stud fees to use their stallions to breed mares. Depending on the stallion’s racing history and pedigree, stud fees can range from a few thousand dollars to hundreds of thousands of dollars.
The American Horse Council estimates that the horse breeding sector in the US alone brings in more than $3 billion annually.
There is no doubt that horse racing is heavily tied to wagering. In fact, the horse racing scene wouldn’t be the same if we take away the ability of people to place wagers on horse races.
Horse racing enthusiasts have the option of betting on a race’s outcome at the track or online. The track, the horse racing industry, and the government all receive a portion of the money wagered.
According to some sources, the US horse racing betting market is increasing every year. In 2021, the wagering revenue in the US was estimated to be $12.2 billion, and this number continues to grow as more people choose to bet on horse races instead of other sports.
Economic Impact of Horse Racing
The horse racing industry not only makes money, but it also significantly affects regional economies as well as the global economy. The American Horse Council estimates that over 1.8 million jobs and over $102 billion in economic activity are supported by the horse racing business in the United States.
The horse racing industry has a favorable effect on the tourism industry in addition to its direct economic effects. Horse racing venues and equestrian competitions draw tourists from all over the world, boosting sales for nearby establishments including hotels, restaurants, and retail stores.