Evolving prize money helps drive horse racing’s economics

March 8th, 2024

One dollar today doesn’t have the same spending power as one dollar a hundred years ago, and purse money in horse racing has risen steadily to keep pace.

Purse money—the prize money awarded to the top finishers in any given race—helps power the economics of horse racing. While infusions of capital from wealthy owners and breeders have long played a part, purses fuel horse racing’s economic engine in many ways.

Consider how purse money can be spent within the industry. Owners can use the funds to buy and/or breed more horses, handle entry fees, and pay trainers a day rate for each horse the trainer conditions. A trainer might take that day-rate money (along with a percentage of purse money won) and use it to purchase feed and bedding, hire grooms to care for horses, and pay exercise riders to guide horses during morning training. A jockey can earn a percentage of purse money as well as a fee for every horse ridden; this money then pays the jockey’s valet (who prepares the jockey’s equipment and silks) and the jockey’s agent (who helps the jockey secure riding assignments), in addition to purchasing riding gear like saddles, boots, and more.

If purse money in horse racing didn’t increase over time, inflation would quickly make the sport unsustainable. Consider the coveted Kentucky Derby (G1). The inaugural running in 1875 featured a purse of just $3,050—$2,850 to the winner and $200 to the runner-up. Nowadays, $2,850 doesn’t go very far in powering the economics of racing—it’s barely enough to buy even an inexpensive horse.

To keep up with the times, the Kentucky Derby purse has risen steadily. It crossed the $10,000 mark in 1914, conquered $100,000 in 1946, then reached $1 million in 1996, $2 million in 2005, $3 million in 2019, and $5 million in 2024. The Kentucky Derby is now the second-richest race in North America behind the $6 million Breeders’ Cup Classic (G1).

Purses in horse racing have risen across the board. In the United States, the average purse per race has risen from $1,131 in 1922 to $39,155 in 2022. The first million-dollar race took place in 1981, when the aptly named Arlington Million arrived on the scene; now million-dollar races are practically commonplace.

Increases (or decreases) in purse money can change the landscape of horse racing. Tracks able to offer high purses attract more and better horses, which can then fuel an increase in the pari-mutuel wagering that helps fund purses. The Santa Anita H. (G1) once ranked among the richest and most competitive winter races in the U.S., carrying a purse of $1 million from 1986 through 2009. But the purse has slipped in recent years (to $400,000 in 2024), and now the best horses in the U.S. tend to travel abroad to compete in newer and richer prizes like the Saudi Cup (G1)—the richest race in the world with a purse of $20 million—and the Dubai World Cup (G1), which carries a $12 million purse.

The winner’s share of the Saudi Cup purse is $10 million. Suffice to say, a rich purse like that keeps horse racing’s economics working smoothly for any owner, trainer, or jockey fortunate enough to earn a piece.