State Incentives 2021
/By Annie Lambert
Breeding Thoroughbred racehorses takes a passion for the animals and the racing industry as a whole. State incentive programs can enhance horsemen’s intense feelings toward their livestock and the efforts to direct and improve their individual breeding programs. Many states and Canadian provinces in North America have helped horsemen reap rewards for breeding better bloodstock.
In some cases, incentives have helped save or resuscitate state racing programs and bolstered racing toward increasing rewards to those supporting their state programs. It becomes a win-win for states/provinces, racetracks, breeders and owners—success for a joint venture, if you will.
Not everyone can agree with the Rules of Engagement within each state’s program, but that is human nature. As a whole, most breeders are ultimately looking to protect the value of their livestock and preserve racing in North America.
The Kentucky Brand
For all its legendary history in the Thoroughbred racing industry, Kentucky is not known to have the strongest incentive program. It does, however, still provide a home to some of the best stallions and breeding farms in the world. According to Duncan Taylor, President of Taylor Made Farm in Nicholasville, Ky., by having the best horses, his home state also has the best infrastructure.
“Kentucky is blessed with the best stallions, therefore we have the best infrastructure—veterinary care, nutrition, blacksmith—all the ancillary businesses that support the Thoroughbred business,” Taylor opined. “We have a weaker program when it comes to breeder incentives. The breeding program we do have is basically paid for by the tax on stallion seasons. There’s a six-percent sales tax on stallion fees, and that money goes into the Kentucky Breeders’ Incentive Fund.”
Taylor pointed out that over time Kentucky, as most business does, has developed a brand. If a breeder aspires to be the best, it pays to go to Kentucky.
“You can breed to horses in your own state,” Taylor said, “but if you’re trying to sell the most expensive horse at the Keeneland Sale, it’s going to be a Kentucky-bred.” “Wealthy people that are buying horses think the best horses come from Kentucky.”
Taylor Made participates in several programs outside of Kentucky. They have bred and raced New York breds, for example, to “cover the downside.”
“Let’s say my horse is just an allowance-winning horse versus a graded stakes-winning horse,” he explained. “If that [New York-bred] horse is an allowance winner at Churchill Downs or even Santa Anita or Gulfstream, but they can’t win a stake or graded stake, that same horse, with the same ability, could probably win a New York-bred stake. You would probably get a $100,000 to $150,000 purse. That’s what I’m talking about—protecting the downside. You can have less horse and still earn purse money.
“I’ve bred and foaled horses in New York to get a New York-bred. If it does run good, I’m going to get some large breeder’s awards. Let’s say I have a New York-bred by our stallion Not This Time (half-brother to Liam’s Map and by Giant’s Causeway) that could win a Gr2 in New York. If you win a $300,000 purse, the winning share is $180,000. I’m going to get $18,000 for being the breeder—10 percent for being a New York-bred.”
Taylor is not planning on moving out of Kentucky, but the government in his state, in his words, “keeps opting to take the horse business for granted.” With the best stallions, Taylor feels he could cut a good deal, load the vans and move out of Kentucky tomorrow, which would not be his first choice.
His frustration comes mostly from the problems Kentucky is having with their slot machine-like Historical Horse Racing gambling machines. The Historical Horse Racing machines have been a huge moneymaker for Kentucky racing as well as where used in other states. The problem comes from other states legalizing the usage of those machines through their state legislatures, where Kentucky approved them through the Kentucky Horse Racing Commission. Now, Kentucky is facing opposition for their use from opposing groups and is in the process of having legislative approval to continue their cash flow to racing.
Fortunately, Kentucky legislators did vote to approve Senate Bill 120, after clarification of what constitutes pari-mutuel wagering. The bill now goes to Governor Andy Beshear, who has expressed his support for it.
B. Wayne Hughes, owner of Spendthrift Farm, in Lexington, Ky, has said, “The breeders are the backbone of our industry.” It is hard to argue that point. Most horses bred by Spendthrift Farm go to auction, although they do keep some to race, according to General Manager Ned Toffey.
“These breeders’ incentives are very good programs,” Toffey offered. “Into Mischief had a number of Louisiana-breds when he was getting started, which was useful. We’ve also used the Pennsylvania and New York programs. Normally, if we’re going to use one of those programs, it’s because we have a stallion standing in those states. We may drop a foal by one of our first-year stallions standing here in Kentucky, then breed the mare back to our stallion standing in that state.”
Toffey mentioned they have found it tough to find the types and numbers of mares they look for in the regional programs. Current Spendthrift stallions are able to get a good, solid book of mares at home.
“If we have just the right horse for a regional program, we’re happy to utilize them, but with the horses we’ve brought in, in recent years, we’ve been able to get the numbers we felt they needed here for the most part.”
Change Concerns & Improvements
Louisiana has changed their state-bred rules beginning with foals of 2021. Babies out of resident mares, sired by Louisiana-domiciled stallions will receive full breeder awards per the schedule established by the Louisiana Thoroughbred Breeders Association Board of Directors.
Foals out of resident mares, sired by out-of-state stallions and bred back to Louisiana stallions will collect 90 percent. Foals out of Louisiana-residing mares, sired by out-of-state stallions and bred back to out-of-state stallions will receive 50 percent of full breeder awards.
Previously, breeders could send a mare to an out-of-state stallion, but that foal could not be an accredited Louisiana-bred unless the mare was bred back to a Louisiana-based stallion.
Not all Louisiana stallion owners are happy with the new schedule. Jay Adcock, owner of Red River Farm in Coushatta, La., stands multiple stallions and feels the new rules will send the better mares out of state, causing a drop in the annual foal crop in his state.
“In my opinion, the better mares in Louisiana will be going out of state now,” said Adcock, who sits on the LTBA Board. “Someone like myself and others standing stallions in the state had thought they at least had a chance at someone’s better mares every other year. I keep mares for myself and for other commercial breeders. They have already told me I have no chance of breeding those mares. It’s really going to penalize somebody with a young stallion. This is my opinion, but there’s a bunch of us that actually think that.”
“I’m a mare proponent,” Adcock added. “Yes, I want a nice stallion, but I do believe it is the mares that prove a horse.”
Adcock has concerns about the Louisiana foal crop shrinking due to the new rules. Commercial breeders sending a mare to Kentucky will most likely return that baby to the larger Kentucky market to sell. It doesn’t seem a reach to assume those auctions would bring a better price than in Louisiana.
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