Maximum-Likelihood Estimates of Racehorse Earnings and Profitability
J. Shannon Neibergs and Patrick L. Vinzant

Journal of Agribusiness, Spring 1999, pages 37-48

Abstract
Thoroughbred racehorses are commonly characterized as unprofitable investments. Previous studies, grouping all racehorses together, estimate that over 80% of all racehorses in training fail to earn enough to recover the variable costs of training. However, these studies are not truly representative, because they fail to account for a number of factors affecting profitability. This study estimates expected purse earnings and profitability of claiming horses in Kentucky. Maximum-likelihood estimates of probability distribution parameters show that expected purse earnings follow an exponential distribution with a mean of $25,267. Profitability is best described by a Gamma distribution with a mean of $4,824. Of the 305 claims analyzed for profitability,

 

61% were profitable. The results indicate substantial financial risk associated with claiming race horses, but conclude that there are positive economic returns on average.



Truxton has had 10 horses - 7 claims and 3 private purchases. Of the seven claims, one was profitable, four lost money, and two are in progress. 1 for 5 is a far cry from 61%. Perhaps Truxton needs to fire their racing manager.

 

... you have an edge in the Firecracker (10th at Churchill Downs), unless of course you are dumb enough to bet on Mine That Bird - he' got no shot. At 4 to1 Mine That Bird would take in more than 16% of the betting pool. Since he has no shot, all that money is essentially seeding the pool and effectively eliminating the takeout. The problem is figuring out which of the other 13 horses to bet. There is lots of speed in the race, but I don't have any bright ideas. Maybe I'll take a flier on the 1 Driving Snow off a long layoff.

In a few hours I'm going to hit the road to take in racing at Churchill Downs. Night racing on Friday is enticing not so much because of all the festivities at the track but that it allows me to take in two race cards despite being able to spend only a little more than a day in Louisville.

Three good reasons to be at the track on Saturday -

Truxton Stables' Big Striker makes his career debut in the second race going 6 1/2 furlongs against $10,000 maiden claimers. Former meth addict Greta Kuntzweiler is in the irons.

Aunt Dot Dot's half sister Global Gala (by Distorted Humor) runs in the 8th race, an N1X allowance race over a mile.

Sting James, a Giacomo 2yo, runs in the 7th race, a 6f Md Sp Wt. Giacomo has two stakes horses, but very few other runners. He has fallen to 3rd on the first crop sire list. Sting James will be a longshot but is worht a flyer.

Bettors only put $320,707 into tonight's Churchill Downs Pick Six which was seeded with $114,650 of carryover money. Hopefully you got some money down because it is a solid positive expectations play. Players will get back $374k on $320k wagered for an expected return of $1.17 per dollar bet. That is better than both the post-Derby ($1.11) and post-Belmont ($1.02) Pick Six carryovers. I need three singles (2-8-3) to get home to hit the thing.  

With $930,495 carried over from Belmont Stakes day, the Pick 6 will receive heavy action on Wednesday despite a lousy sequence of races - three turf sprints, three statebred races, a five horse optional claimer (not seven races -- the 6th race is a turf sprint for statebred maiden claimers).

Wednesday's Pick 6 will be a positive expectations play if less than $3,578,827 is wagered. Belmont's takeout on the Pick 6 is 26%. 

The less that is wagered, the bigger the edge for players. If $3 million is bet, players will have a 5.0% edge, If $2 million is bet, players will have a 20.5% edge.  

How does this compare to some other big carryovers this year?
Beulah Park Fortune 6 carryover on May 1st 
$445,139 carryover
Takeout 22.5%
Amount bet into pool $704,691 
Amount returned to bettors $991,274 

Edge 40.7%
 
Churchill Downs Pick 6 carryover on May 6th

Giacomo!

with $94,193 in total earnings. Yesterday Lady Giacomo become a stakes winner, earning $39,654 for her win in the TTA Sales Futurity. Blushing Sis finished third in the same race to pick up $6,609. The additional $46k from these two fillies vaulted Giacomo temporarily into 1st place among first crop sires, $9k ahead of Bluegrass Cat. We'll see how long it lasts, Hopefully until the end of the year.

Pictures taken May 19 by Jill Stowe. The Giacomo foal was born March 18. Aunt Dot Dot is in foal to Successful Appeal. Both mare and foal are currently residing at Walmac Farm.

Giacomo's two winners are now multiple winners. Blushing Sis and Lady Giacomo won their respective trials in the TTA Futurity and will compete in the finals on June 5th. Each filly won ~$10k to push up Giacomo's winnings to $47k and second among first crop sires behind Bluegrass Cat. Lady Giacomo should be prohibitive favorite in the final based on her dominate 5 1/2 length win in the faster of the two heats. Let's hope that on June 5th Giacomo gets his first stakes winner.  

The value of Aunt Dot Dot's foal (born March 18th) is highly dependent on how well his sire Giacomo's first crop performs. Giacomo is off to a promising start with two winners and is currently ranked #7 among first crop sires. He has three starters in the next two days. Today Negra Tomasa (out of an Alydeed mare) makes her debut in the 2nd race at Hollywood Park against seven other $40k claimers. She is morning line 15/1. Giacomo's two winners, Blushing Sis (Carson City mare) and Lady Giacomo (Gallapiat mare), run in separate trials for the TTA Futurity at Lone Star Park on Thursday (2nd and 4th race). The top four finishers in each trial advance to the estimated $80k Futurity Final on June 5th.    

Big Striker (picture above), a Pennsylvania-bred three year old by Valid Expectations, is working steadily toward his first start. He is currently with trainer Randy Matthews at Churchill Downs training track but he'll do his running at Penn National or Philadelphia Park.

Aunt Dot Dot (8yo Gulch mare) is in foal to Successful Appeal on an April 17th cover. She is currently at Walmac Farm with her Giacomo foal by her side.

Cornell (3yo gelding by Malibu Moon) is 0 for 7 for Truxton, losing races at Turfway, Oaklawn, and Penn National. Next stop is Presque Isle Downs. We'll see if he likes the synthetic. He broke his maiden over the poly at Turfway last fall. If he doesn't his racing days are over.

Coach Hawley (3yo Tale of the Cat gelding) is back at the track after a month of R&R at the farm. Expect him in a maiden race sometime toward the end of the Churchill Downs meet.