Trickle down economics: how much prizemoney reaches ordinary owners?

Cover image courtesy of Victoria Racing Club

What every industry needs to flourish is investors, and in particular, investors willing to inject more than a little pocket change into a project. When you are putting seven-figure sums into a project, you are certainly hoping for a good return.

Australian racing has more prizemoney than ever, more million-dollar races than any other jurisdiction and fewer horses competing than it did a decade ago.

The money has grown. The number of participants sharing it has not.

If record prizemoney is supposed to retain owners, the figures suggest the industry has been measuring the size of the pool while paying too little attention to where it lands.

Olly Tait and Duncan Ramage’s entries into TTR's problems and solutions series highlighted a two-pronged solution; increasing the spectacle could attract more top end investors to racing, and improving the chance of a return with redistribution of prizemoney is what will keep them here.

In Part 1 of this followup, we focus on the most obvious lure.

Balancing the books

Horse racing is unique among all sports. Every sport has fans who watch games and cheer for their favourite players. Every sport has investors, whether it is into teams or into clubs or simply into the sport itself. But horse racing is unique in that you can own the athlete. You get more than a front row entry ticket to the event, you get the whole journey and all the ups and downs, the highs and the disappointments.

As Tait put it, “horseracing provides a person who can’t play professional sport the platform to experience the thrill of playing professional sport.”

In 2025’s Racing Australia Fact Book there were 19,053 races with an average field size of 9.46. In 2016’s Fact Book there were 19,393 races with an average field size of 9.6.

There were 27,589 individual horses who raced in 2025/26 for a total prize pool of just over $1 billion. Ten years ago, an additional 1100 individual horses joined the racing pool to compete for a total of $627 million.

This alone demonstrates that the totality of prizemoney on offer isn’t enough to keep owners invested in racing. Tait is not alone in the opinion that it is the distribution of this prizemoney that is the crux of the problem.

Figures in Racing Australia’s 2024 Fact Book show that only 5.9% of racehorses earn over $100,000 in one racing season. With metropolitan training fees alone averaging north of $70,000 a year, not including spelling and veterinary care, the chances of breaking even on training fees alone are on the slim side.

While not every horse is training and performing in this bracket, Ramage highlighted that the division of ownership tends to be amongst smaller groups in the country, leading to less people sharing the costs.

Further analysis suggests that only one in 10 horses break even across all tiers of racing, but if the needle could shift in the direction of one in five breaking even, the odds of the game obviously become much more favourable.

This is particularly relevant to a major investor who owns multiple horses outright. A broader spread of returns across a racing portfolio may be more valuable to that owner than one remote chance of winning a lottery-style race.

Whose incentive is it anyway?

NZTR announced last week that they would be reducing the expenditure on “innovation races” with two of the five races dropped from the calendar saying they “had not achieved their intended impact”.

Two of the three remaining innovation races will continue with reduced prizemoney, while the NZB Kiwi will see its prizemoney increased by NZ$500,000 to NZ$4.5 million for the 2026/27 season.

“The investment made by slot holders was based on the structure already agreed for The NZB Kiwi, and the Board considered it important that NZTR honour that commitment,” NZTR General Manager Racing Mitch Lamb said in a press release on Thursday.

“The race has delivered significant commercial and promotional value for New Zealand racing. However, beyond this season, NZTR will undertake a full review of its future structure and investment.”

The announcement signals a change in direction that underpins Tait’s point. Big prizemoney pop-up races - slot races included - are a lottery-style approach to ownership.

NZTR’s approach raises the possibility that a top heavy prizemoney system doesn’t work to benefit the industry as a whole and it asks questions that Australian principal racing authorities should also consider when evaluating the impact of their incentive races.

A million-dollar race should be required to show what the additional prizemoney buys: more wagering, new sponsorship, larger crowds, wider media attention or additional ownership investment. The Everest clearly attracts a crowd, but Racing NSW should also be able to show at what point the purse produces commercial returns that could have been achieved with less prizemoney.

Money where it matters

The Inglis Xtra Bonus series and Super Maiden races in New South Wales are more of a drawcard. There is the opportunity to win one at least once a week. They happen all over the state, and country. They do not require an elite horse to win, but they can provide a significant repayment towards an owner’s investment.

This is an idea that doesn’t need to stop here, either.

France has taken this principle much further. France Galop pays owners of eligible French-bred Flat horses a premium on top of ordinary prizemoney: 75 per cent for two- and three-year-olds and 45 per cent for older horses, compared with 33 per cent in Group 1 races.

The system still rewards elite performance, but gives the owner of an ordinary winner a better chance of meeting the next training bill. The additional incentive follows horses through the wider program instead of depending on them reaching a handful of major races.

Britain’s Great British Bonus applies the same broad principle to eligible fillies and mares. They can earn bonuses of up to £20,000 in an individual race and £100,000 over time. Sixty-five per cent goes to the racing owner, with breeders, trainers, jockeys and stable staff sharing the balance.

Australia already has versions of this through Inglis, Magic Millions and state breeding schemes. The next question is whether a similar incentive could reach horses outside sale-restricted and breeding-restricted programs.

How top-heavy has racing become?

According to Aushorse, Australia staged 109 races worth $1 million or more in the 2025/26 season. The country’s top 10 races were worth $75 million, with the Everest accounting for $20 million of that figure. Ten years ago, the G1 Melbourne Cup was our richest race at $6 million, and the top 10 races were collectively worth $28 million.

In the same time, prizemoney overall has doubled. On that measure, our top 10 races should be worth $56 million.

That $19 million could fund a $10,000 increase to 1900 races, a $20,000 increase to 950 races or a $30,000 increase to approximately 633 races. Racing authorities could model which option would produce the greatest improvement in owner cost recovery, field sizes and retention.

The concentration is clearest in New South Wales. 48 races worth $1 million or more absorbed 26.6 per cent of the state’s total prizemoney - almost double their share in 2018/19. Those races may generate headlines, crowds and wagering, but they offer a return to only a tiny fraction of the horses whose owners fund the industry each month.

That is the question administrators rarely answer when announcing another rich race: how many owners does the expenditure actually reach?

Ahead of the 2025/26 racing season, Racing Victoria announced a strategic restructuring of prizemoney that saw several top races sacrifice prizemoney that was instead allocated to a wider spread. A total of 1400 professional country maidens received a boost of $5000 each.

“To determine the cost of raising these maiden races should be easily calculable by the number of them run in the racing calendar and the added prizemoney needed,” he said. “I suspect the number may not be as high as one might think.”

The case for redistribution cannot rest on the assumption that owners will reinvest if more horses recover their costs. Racing authorities hold the data needed to test it: owner retention, returns by prizemoney band, field sizes and repeat yearling purchases.

Before another rich race is created, the industry should know whether one spectacular payday or hundreds of more attainable returns keeps more owners in the game.