State Incentives 2025 - The different state incentives for owners and breeders across North America

Words - Ken Snyder

There’s an old saying, “the more things change, the more they are the same.”  “Same,” in the case of Thoroughbred breeding, might actually be desirable, as in a leveling off of declining foal crops and short fields not getting any shorter. 

“Change” is borderline cataclysmic. To wit, the possibility of decoupling racing at Gulfstream Park from the casino poses an existential threat to the racetrack, and dark clouds are beginning to loom over Santa Anita that’s not coming from the recent fires.

Still, the industry soldiers on. 

It’s ironic that Kentucky, the hub of the Thoroughbred industry in North America, prospers with record-high purses and full to overflowing fields. 

On the positive side for breeders and the industry as a whole, sale prices increased over 2023 in the weanling, yearling and broodmare divisions. 

Keeneland’s September Yearling Sale, one major barometer of industry health, broke a cumulative sales record on the 10-day mark with sales topping $405 million, beating the prior record set in 2022. 

Total yearling sales receipts across North America increased by just over 4% year on year with an average price also increasing just over 6% above ’23 averages. With an inflation rate of 2.89% at time of writing (down from the astronomical 9.06% in 2022) breeders could actually spend some of their sales revenues.

Naysayers, however, might snidely ask horse purchasers, “Where ya’ gonna’ race ‘em?”

The answer is states where racing venues operate with breeding incentives, thank you very much. For that matter, one of the states —New York– will boost state-bred incentives by 15% in 2027 in time for renovated Belmont Park. That would be 15% of $42.8 million (the total for 2024 New York-bred races) or a cool $6.4 million in 2027. 

It seems, by the way, New York breeders are ahead of NYRA. The state actually experienced a foal crop increase from 1,446 to 1,524 at time of writing with full results not yet in… one of the few states with a plus number last year.

Also in the plus column is Pennsylvania. Foals numbers are projected to remain the same through 2023 to 2024. But with ten new stallions to hit the breeding sheds this year, including 2022 Kentucky Derby-winner Rich Strike, that number will likely increase in years to come. Rich Strike is one of approximately 45 stallions standing in Pennsylvania, according to Brian Sanfrantello, executive secretary of the Pennsylvania Horse Breeders Association.

The Keystone State might be the best place for breeding awards east of Kentucky. Last year, Warriors Reward topped stallion standings with $199,664. Add breeder totals to that and you have $927,518. 

Speaking of Kentucky, there was $58.1 million last year in Owners’ Awards, but no stallion owners’ awards. But Kentucky has the Kentucky Thoroughbred Breeders’ Incentive Fund (KBIF). Awards since the fund’s inception in 2005 total over $200 million for winning eligible races. 

The KBIF also solves a mystery for most racegoers in the Commonwealth in racing programs. It is common to see purse money added to by the “Kentucky Thoroughbred Development Fund.” That money comes from a 6% sales tax on breeding to a Kentucky stallion.

Peripheral but important to many small breeders in Kentucky for the coming season has been both Spendthrift Farm and Taylor Made Stallions cutting fees for six stallions and seven stallions respectively. 

In total, fee reductions for thirteen damn good stallions went from a total of $205,000 last year to $124,750 in 2025. The cuts enable a wider market of breeders to pass through Spendthrift’s gates and might generate new blood in the sport.

In Florida the absence of a state income tax carries over to horse breeding. Unlike Kentucky, there is no tax on stallion seasons spending; horses purchased from an original breeder are sales-tax exempt; there is no personal state income or individual capital gains tax; and feed/animal health items are tax exempt. 

The incentives require a journey into the proverbial weeds with different awards for Gulfstream and Tampa Bay Downs--some bonuses for a maiden special weight and allowance races but not handicap races; a percentage of a gross purse for winning a Black-Type stakes race; and bonuses on open overnight races. 

The incentives vary between Gulfstream and Tampa. Suffice to say, according to the FTOBA’s website, Florida breeds - "Registered Florida Stallions”-- are eligible for “purse and race incentives plus the $1.2 million 2-year-old stakes series at Gulfstream Park.”

My guess is the trainer, jockey, and maybe even some owners just wait till they get their check from a track’s payroll clerk to know what they won.

Louisiana is much simpler. A horse sired by a Louisiana stallion and foaled in the state who finishes first, second or third at a Louisiana track earns a 25% award. (Purses with this award structure are capped at $200,000.) A horse sired out of state but foaled in Louisiana earns 20% for first, second, and third if the race is within the state. A “non-resident” filly or mare, can earn an award of 10% if sired by a Louisiana stallion and racing in the state. It’s win, place, and show for these horses, too. The smallest award is 9% to resident and non-resident mares sired by out-of-state stallions. This includes mares bred back to an out-of-state stallion.

Arkansas might be the easiest incentive program to understand. Stallion awards are to an owner of an Arkansas-bred stallion for first through fourth place for any race in North America. Awards are “calculated on the earnings of 1st through 4th place finishes.” 

California’s breeding awards are not complicated but vary by race condition and purse size. It’s pretty straightforward (unlike the Kentucky Thoroughbred Breeders’ Incentive Fund) and is available in the state-by-state breakdown of incentives.

State Incentives 2022

by Annie Lambert

North American Thoroughbred market breeders saw record sales in 2021, while breeding to race looks equally enticing in 2022. Even a pandemic has not stopped the racing industry from rewarding breeders and owners from producing, purchasing and racing quality horses.

Farm Futures

Spendthrift Farm, Lexington, Kentucky, are continuing with their trendsetting programs – Share The Upside and Safe Bet – following the death of Spendthrift founder and owner B. Wayne Hughes last August. Both programs have been directly copied or modified by other farms due to their obvious significance to breeders.

The Spendthrift Farm 2022 Stallion Roster consists of 25 sires, including newly added Basin (Liam’s Map), Known Agenda (Curlin), Yaupon (Uncle Mo) and By My Standards (Goldencents).

Safe Bet minimizes risk for mare owners by ensuring that the stallion they chose from the program will sire at least one graded/group stakes winner by December 31, 2022 from its first two-year-old crop, or the mare owner will owe no breeding fee. If the stallion does produce at least one black-type winner, the listed stallion fee would be due.

Spendthrift stallions in the program for 2022 include Cloud Computing, Free Drop Billy and Mor Spirit, all standing for a $5,000 fee.

“Safe Bet will continue this year with Free Drop Bill, Mor Spirit and Cloud Computing,” verified Spendthrift Stallion Sales Manager Mark Toothaker. “If they do not have a graded stakes winner in North America in 2022, then all of those contracts done under the program will be free. If they have a graded stakes winner, [breeders] are thrilled to death to pay $5,000. If it doesn’t work out, at least it doesn’t cost them anything, as far as a stud fee.”

Share The Upside has proved stunningly successful for breeders, while remaining a simple concept. Breed a mare to a program stallion, have a live foal and pay the stallion fee when due. That foal entitles the mare owner to a lifetime breeding to the stallion, an annual breeding share, with no added costs.

Program stallions for 2022 include: Basin, By My Standards, Known Agenda and Rock Your World (Candy Ride (ARG)), the latter two being already sold out.

“We have two different forms of Share the Upside,” Toothaker said. “Rock Your World and Known Agenda are both on two year programs with fees of $12,500 this and next year. Basin and By My Standards are both on one-year deals with a second year breed back for free. They are both standing at $8,500 one time and then in 2023 you breed a mare for free and you will have filled your commitment to have a lifetime breeding right.”

According to Toothaker, some stallions offer a pay-out-of-sale proceeds type offer this year. It is not a forgiveness of the stud fee, but it is a deferment arrangement.

“There are certain stallions that we will allow a breeder to defer paying the stallion fee, temporarily,” Toothaker said. “They can sell the mare in foal or sell the resulting weanling or yearling. We don’t usually want to carry it past a yearling season.”

Because the quality stallions can be very expensive to acquire, farms must try and turn each season into monetary income if at all possible. Various programs enable stallions to be marketed for the benefit of the stallion business and mare owners.

The Kentucky Thoroughbred Development Fund (KTDF) has increased purses within the state and has shown significant growth. Keeneland Race Course, for example, will award a record $7.7 million for 19 stakes to be run during their April 2022 spring meet. 

Spendthrift’s 2022 ‘Share the upside’ program stallions include Rock your world, known agenda, Basin & By my standards (pictured)

The KTDF will contribute $1.5 million to the stakes purses, pending approval from the Kentucky Horse Racing Commission. KTDF funds come from one-percent of money wagered on live Kentucky Thoroughbred and historical racing. In addition, two-percent of all money wagered on Thoroughbred races via inter-track wagering and whole card simulcasting.

Only Kentucky-sired and Kentucky-foaled horses that are registered with the KTDF are eligible for these purse supplements. Each racetrack, pending approval by the KTDF advisory board, decides the purse payment structure. Payment is distributed to the owner of record.

State Lures

The California Breeder’s Association continues to have one of the most respected, and often copied, programs in North America. According to Mary Ellen Locke, Registrar and Incentive Program Manager, there have been no structural changes to their lucrative program from recent years.

California mare owners can breed to out-of-state stallions and still have a Cal-bred, providing the mare foals in the Golden State and is bred back to a California stallion. 

“We have no new changes for 2022,” Locke confirmed of the CTBA incentives. “There have not been as many inquiries from other states regarding our program recently. When most were starting out, they’d ask how our program worked. I think a lot of the states that want an incentive program have one.” 

Little Red Feather Racing Club is an established racing partnership group, which purchases prospects to race across North America. Founder and managing partner, Billy Koch, made it clear they are not in the breeding business, but definitely keep owner incentives in mind for his runners.

“We race everywhere in the country, so we look at the horses [bred in any state],” Koch explained. “Whatever racing jurisdiction you are running in, the incentives should be noted. When it comes to California, as they say, ‘It pays to own a Cal-bred.’”

Texas has been making big improvements for breeders to take advantage of in recent years, according to Mary Ruyle, Texas Thoroughbred Association Executive Director. Texas state legislatures passed a bill in 2019, which provides for $25 million annually to help the equine industry – seventy percent is set aside for purses. The monies are collected via a tax on equine goods and products. 

The TTA is actively promoting the Texas-bred Thoroughbred in 2022.

“What we are doing is going to each of the Texas Class One tracks and inviting new people to learn more about the process of becoming a breeder or a racehorse owner,” Ruyle said. “We’re also having an event in connection with our two-year-old training sale.”

Berdette Felipe, Arizona Thoroughbred Breeders Association, reported there were no major changes to their program, but that business was going well for breeders and owners.

“Turf Paradise has added money into the purses, the purses are bigger,” she said. “And, Turf Paradise does pay a breeder and owner award at the end of the meet.”

Mare owners in Arizona are able to breed to out-of-state stallions, similar to California, and still have an Arizona-bred foal. “As long as the mare foals here and the baby stays in Arizona for six months of its first year,” Felipe explained.

When Virginia passed their Historical Horse Racing legislation in 2019 Debbie Easter, Executive Director of the Virginia Thoroughbred Association (VTA), predicted good things for Colonial Downs. Last year, Easter began to see the numbers climbing in spite of no year around racing in Virginia.

Colonial Downs enjoyed a record setting Thoroughbred season in 2021 with purse monies of $522,000. That number is expected to grow to $600,000 this year. The Virginia Racing Commission also granted the 2022 meet an additional nine days of racing.

The VTA continues to provide incentives to their breeders, encouraging them to set up shop and grow in their state.

Even though the state of Minnesota has challenges for breeders and owners, those directly involved continue to stride forward with help from the Minnesota Thoroughbred Association and the Minnesota Breeders’ Fund [MBF].

The MBF, which is overseen by the Minnesota Racing Commission (MRC), awarded over $600,000 to breeders last year. Monetary awards are paid to Minnesota-bred horses that are registered with the MRC. There are ongoing attempts to promote state-bred horses.

 “Members of the commission have agreed recently to support an incentive whereby anyone who buys a share in a Minnesota Thoroughbred Association stallion auction will be rewarded,” Bob Schiewe, Deputy Director of the MBF, explained. “If you bring your mare to use the breeding and bring the mare back to Minnesota to foal, the Breeders’ Fund will pay a $1,000 incentive.

“It’s not a lot in the bigger picture, but it is something. We are hoping that it might result in 15 to 30 mares foaling in Minnesota that otherwise may not have.”

Minnesota not only suffers from severe winter weather. Lower purses at Canterbury Park, the only Thoroughbred track, are stressing the racing structure. 

“Canterbury Park, where we have had Thoroughbred and Quarter Horse racing since the 1980s, has a marketing agreement with the nearby Shakopee Mdewakanton Sioux community, which owns/operates the Mystic Ways Casino,” Schiewe said. “The casino is very successful and has supplemented purses at Canterbury Park by about $7.5 million annually for 10 years. It basically doubled our purse account.”

But, much to Schiewe’s dismay, the decade long agreement with the casino to provide the added funding is expiring and the Native American community seems prepared not to negotiate a new contract.

“Unfortunately for horse racing in Minnesota,” Schiewe acknowledged, “it seems to be in very serious jeopardy of going away.” “You can do the math; we’ll be losing half of our purse account in this day and age.” 

Mr Monomoy

Independent Initiatives

Sean Feld is Managing Director of Climax Stallions, which he runs from Lexington, Kentucky. Sean’s father, Bob Feld of Bobfeld Bloodstock is the company’s Director of Stallion Acquisitions.

Climax Stallions now offer seven sires, most of which reside in varied regions of the United States, with one currently standing in Ireland. The concept of treating each stallion separately allows the company to find proper exposure for each horse.

“When we acquire a stallion we’ll make phone calls to various farms in various locations where we think the horse fits best and where we think he will get the best reception,” Sean explained. “Curlin To Mischief [a half-brother to Into Mischief and Beholder by Curlin] is in California because it was helpful that Into Mischief and Beholder did their running out there. That familiarity definitely helps.”

Son Of Thunder, a full-brother to the late Laoban, stands in New York, St Patrick’s Day, by Pioneerof The Nile, resides in Florida and Mr. Monomoy, by Palace Malice, is in New York. Editorial, a half-brother to Uncle Mo by War Front, and Fortune Ticket, a full-brother to Gun Runner, are both in Maryland. The only stallion standing outside of North America is Bullet Train by Sadler’s Wells.

“We have Bullet Train leased to a national hunt farm in Ireland,” Sean said. “He’s going to be a steeplechase stallion. His first foals in Ireland are three, so they’ll start running soon.”

Climax Stallions are placed with consideration of breeder and owner awards offered as well. Mr. Monomoy, with his dirt pedigree fit well in New York considering the amount of money in the Stallion Stakes races as well as winter races in Aqueduct being run solely on dirt.

State-bred programs like California, Florida, New York and Maryland all have outstanding incentive programs overall, according to Sean. And, Sean appreciates mare owner programs like those offered by Spendthrift.

“We offer a Share the Upside type program for all our freshman sires,” he pointed out. “In the regional market it is a lot harder to compete than the Kentucky market. You have to be creative to get as many good mares as you can. There are leading breeders in every state and you try to get as many mares from leading breeders as possible.” 

“Our tagline is, ‘We bring Kentucky to you,’” he added. “We have Kentucky quality pedigrees in the regional market; we try to help the regional-bred horses as much as possible in the pedigree department.”

Ontario, Canada’s province most entwined in Thoroughbred racing, sports a range of incentives to promote Thoroughbred breeding in the province. 

There are monetary bonuses allotted through the Mare Purchase Program that applies to in-foal mares with progeny of 2022 when purchased at an Ontario Racing recognized public auction. Through the Mare Recruitment Program, a breeder who brings an in-foal mare to Ontario to foal in 2022 is eligible for incentive funds, with some stipulations.

A breeder of record is eligible for several bonuses through the Thoroughbred Improvement Program, including out-of-province breeders awards. Ontario sired purse bonuses are also paid out. There are many angles to beef up breeder awards in Canada.

It would quite possibly take the entire magazine to explain each and every North American opportunity for mare owners to enhance their bottom lines. The more you dig, the more opportunities are found. And, with competition growing, there are certainly deals to be made. You won’t know until you ask.