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Ravens Pass - Frankie Dettori - Breeders' Cup - Santa Anita

Ravens Pass after winning last year's Breeders' Cup Classic; the Breeders' Cup programme set the precedent of funding races through nominations made by breeders and owners.

  PICTURE: EDWARD WHITAKER  

 

Incentives the
name of the game

THE financial incentive is one of the most compelling in any human endeavour - think lottery tickets, sports gambling and employment. How do you get people to work? Offer them money to do it. How do you tempt them to go racing? Convince them they can make money at it.

So it follows that if you want people to own racehorses, offering them the prospect of gaining money back will sweeten the deal. The greater the chance the prospective buyer has of getting his or her money back - or even making a profit - the more likely they are to fork out in the first place.

It is a simple concept that ideally would be met by sufficient pots of prize-money from day-to-day racing. But with that falling short in many jurisdictions, various bodies have taken it upon themselves to pump up the available jackpot, the Racing Post Yearling Bonus being only the most recent of such undertakings. This bonus is unusual, however, in that it was dreamed up on a grass-roots level bybreeders and consignors, following the generally lauded introduction of the Breeze-up Bonus Scheme earlier in the year.

The most obvious precedent for the industry supporting itself is the Breeders' Cup; introduced in 1992, with the first races run two years later, the megalith race series is funded largely through nominations made by breeders and stallion owners. The two days of championship races are worth $25.5 million this autumn, with another $5m enhancing the prize-money of around 100 black-type races throughout the year.

Most previous incentive schemes were launched, though, either by a private concern such as an auction house seeking to boost its competitive edge through the creation of sales races, or by agovernment body intent on bolstering its agricultural sector.

The US, where each of the 50 states has an autonomous budget and regulatory structure, offers several examples of the government-sponsored direct incentive scheme, some of which have been very successful. California and New York have two of the most established and lucrative schemes, and there is evidence that horses eligible for these programmes are worth more to prospective buyers because of their increased earnings potential.

"It brings people from New York to bid, if you're [selling] in Kentucky or Florida," says Howard Zucker, a native New Yorker who now trains a stable based at California's Santa Anita Park. "We sold a New York-bred for probably twice what he'd be worth otherwise in Kentucky two years ago."

New York's valuable incentive scheme is ministered by the New York State Thoroughbred Breeding and Development Fund, a public benefit corporation belonging to the state that was set up in 1973. Financing comes from what the fund's literature describes as "a small percentage" of pari-mutuel wagers in the state, as well as a percentage of Video Lottery Terminal (VLT) takings. The programme offers more than 1,000 races restricted to New York-breds as well as awards paid to breeders, stallion owners and racehorse owners.

Breeders can receive up to an additional 20 per cent of prize-money for first place and an additional ten per cent for second or third, while stallion owners can earn up to seven per cent of prize-money for first through third place. Both breeders' and stallion owners' awards are capped at $10,000.

New York-breds who finish first through third in open company also earn additional prize-money for their owners, capped at $20,000 per race. In 2008, the New York fund paid out $6.8 million in awards to breeders, $2.1m in awards to stallion owners and $1.4m to owners of New York-breds, as well as staging 45 black-type races worth more than $4m.

Although horses bred in California do not often make the trip to Kentucky as yearlings, the California-bred programme can also enhance sales value, according to Zucker. "If they show up at Keeneland, especially if they are by a Kentucky sire, you might pay a little more for them there," he says.

Similarly to New York's programme, benefits include a percentage of prize-money to owners and breeders of winners, as well as to stallion owners. The premiums are generous, with owners able to receive a minimum 20 per cent bonus for first through fifth places in higher-level races not restricted to state-breds.

Additionally, racecourses in California are required by law to offer one race per day which is restricted to California-breds - 327 of them, worth more than $15m, in 2008. Earlier this year, in response to declining fields, the rules were relaxed to allow horses sired by a California-based stallion, whether or not they met the requirements of a California-bred, into the restricted races. The awards are funded through a percentage of state gambling income.

As a further incentive, a flat bonus will be introduced this autumn through temporary funding, awarding $20,000 to owners of registered California-breds for winning a maiden allowance (non-claiming race) at the prestigious southern tracks, and $10,000 for a similar win at the smaller northern tracks.

The effect? Zucker, who has a degree in economics, says: "I always thought it was beneficial to the whole agricultural sector. The end-all is not the racing, it's the agricultural effect. Really the point of the state allowing you to have those funds is this: the incentive to breed is the incentive to have a farm, which creates all kinds of trickle-down opportunities."

Barry Abrams, another Santa Anita-based trainer, is more blunt. Abrams is the co-owner of leading California sire Unusual Heat, who earned more than $470,000 in stallion awards from the programme last year. "As you know we are an island in California," he says, alluding to the difficulty of attracting new owners. "Luckily I have all Cal-breds, or I would be out of business in California."

Canada also has an extensive awards plan for horses meeting Canadian-bred requirements, as well as stakes race programmes for horses in the provinces of Alberta, British Columbia, Manitoba, Ontario and Saskatchewan. Ontario runs one of the best-known of these, a lucrative stakes scheme for horses by Ontario-based sires.

On the other side of the globe, auction house William Inglis & Son - in which Tattersalls owns equity - operates a race series worth A$2.6m in prizes and bonuses for two- and three-year-olds offered through its ring. There are eight black-type races, worth A$100,000 to A$250,000 each, and Inglis also designates a number of non-black-type races for which nominated sales graduates can earn bonuses of either A$50,000 or A$100,000. In addition, the company offers a bonus of A$50,000 to the trainer with the most wins in the series.

Japan has also jumped on the incentive concept, introducing a bonus this year for graduates of its July Select Sale worth 10m yen (£64,205/€74,238) to two-year-old winners of Group 1 races and a lesser amount to juvenile winners of other Group races. Bonuses of 100,000 yen (£642/€742) are available to juvenile winners of races in Hokkaido.

 

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