Home » Entrepreneur | Making Yet Another Big Bet

Entrepreneur | Making Yet Another Big Bet

Ken Ramsey, leading horse owner and breeder, is betting on hemp as next bonanza

By Jeff Lowe

Successful multicareer entrepreneur Ken Ramsey leads filly Stephanie’s Kitten to the winner’s circle after the 2015 Breeders’ Cup Filly and Mare Turf race.

Though turning 84 years old Nov. 3, Ken Ramsey is hungry for a new challenge and believes he is on to a winner. He certainly knows what one looks like.

Kenneth L. Ramsey has been one of American horse racing’s most successful owners and breeders, having built Ramsey Farm in north Jessamine County into a powerhouse with money he made through a major gamble on the emerging cell phone industry in the 1980s, and later with the success of a champion horse, Kitten’s Joy, bred with and named after his wife, Sarah Kathern “Kitten” Ramsey. Kitten’s Joy has been the leading sire in North America the last two years.

By Ramsey’s count, he has made at least $1 million in five different business pursuits: cell phone franchises, real estate, radio stations, the stock market, and in the Thoroughbred game.

In the last couple of years, Ramsey has substantially pared back the racing and breeding operations. Both had grown unwieldy, he says, and there is a desire to focus more on quality than quantity. He also may be close to reaching his fill after amassing a vast collection of leading Thoroughbred owner titles, fueled by a sharp, hands-on operator, demanding standards (a win clip of at least 20 percent has been the expectation) and heavy volume.

Ken and Sarah Ramsey, hometown sweethearts from tiny Artemus, Ky., are the all-time leading owners by wins at Churchill Downs and Keeneland and have also piled up owner titles at Turfway Park, Kentucky Downs, Ellis Park and various other tracks. Equibase records since 2000, several years after the Ramseys got serious about racing, show their horses have just short of $95 million in winnings.

  • IT’S FREE | Sign up for The Lane Report email business newsletter. Receive breaking Kentucky business news and updates daily. Click here to sign up

Lately, though, Ramsey has been directing some of his attention and capital to a different form of agriculture. After betting big on the concept of cell phones, to the point that he nearly ran out of liquid funds while trying to enter as many government lotteries as he could for cellular franchise rights – he now sees the marijuana and hemp industries as a sure winner.

In 2015, Ramsey spent $1.86 million to buy Chaumiere du Prairie, a historic, 175-acre property adjacent to Ramsey Farm on Catnip Hill Road in Nicholasville. With his background in real estate, he saw it as a sage investment, but the property turned out to offer more than he expected.

“Back in 1804 or 1805, David Meade sent a scouting party from his plantation in Virginia to scout where they could find the most fertile land they could find, and it’s this property that I have now,” Ramsey said of his estate, where Meade reportedly hosted several presidents as well as Kentucky’s famous U.S. Sen. Henry Clay, whom Ramsey notes was a titan in the hemp industry.

“We have dug down (into the ground) there burying tree stumps and all that and gone down 6 feet and it’s still black. There is no rock in it, no limestone in it at all. My (horse) farm has got a limestone base but not this property; it’s very fertile. So I have raised one acre of hemp over there. Everything went well. This year I’m growing 20 acres out there,” Ramsey said.

“I didn’t grow (much) last year because I didn’t have a market like I was told to expect. They changed (federal law and regulations) now, so I am selling a bunch of the horses that I’ve got. We’re downsizing for a reason. We got too big to start with, but also I am putting money in marijuana stock and I am growing hemp out there.

“I’ll probably start my own hemp oil factory, processing the oil and start buying hemp from other people. This is the next big deal: the hemp revolution. We won’t call it marijuana in Kentucky – that is its first cousin – we will call it hemp and then they are going to legalize it and we will be ready to grow it. Mark my words; that is a prediction.  It’s a foregone conclusion. The guy that succeeds is the guy that is on the cutting edge.”

An eye for entrepreneurship

Ramsey believes he can spot an entrepreneur at a young age, based on their initiative and ingenuity. He knows from personal experience, from his Knox County youth in Artemus, where he honed his work ethic with a shoeshine operation (he later named a horse Ten Cents a Shine that competed in the Kentucky Derby), delivered newspapers, mowed and raked yards, sold seeds and carried the town mail from a daily railroad stop to the post office.

While serving in the Navy, Ramsey saw a Thoroughbred in person for the first time when he and a buddy attended the races at Golden Gate Fields in Albany, Calif. That experience left an impression, and Ramsey started owning horses and even serving as a trainer himself for a short while after he had attended the University of Kentucky under the G.I. bill and settled into the real estate business.

His first job out of college was as an executive in training with a trucking company out of Winston-Salem, N.C. He later worked at Kentucky Motor Freight in Danville, Ky., and had a memorable encounter with Jimmy Hoffa, who was representing the Teamsters Union in a labor dispute. Ramsey, as personnel safety director, was prepared to present the company’s case in a grievance hearing, but Hoffa beat him to the punch, playing hardball as soon as he walked through the door, threatening to have a picket line in place the next day. Ramsey’s boss backed down.

Ramsey decided soon thereafter to seek out another opportunity. He opted for real estate in Lexington, opening his own brokerage with a broad scope of services, from auctions (Ramsey graduated from the auctioneer’s school in Decatur, Ill.) to insurance to rental properties.

“I always wanted to own my own business,” he said. “At the peak, I had 29 sales people working for me and was the No. 1 selling office in Lexington. And at one point I had 101 pieces of property that I owned. We sold everything: houses, farms, commercial property and got into loan assumptions. We made a lot of money doing that. I would spend $1,000 or $2,000 fixing the place up a little bit and then immediately put it on the market. I would make three, four or five thousand dollars on it and a lot of times turn it over in a couple weeks.”

As he grew his business, Ramsey relied on another Eastern Kentucky native who was just starting to make his way in Central Kentucky: attorney Dudley Webb, who would later change the face of downtown Lexington as a real estate developer, along with his brother, Donald. For Ramsey’s loan assumptions, Dudley Webb was a big asset, able to quickly provide short title reports, often within 24 hours.

“Ken was one of my first clients,” Webb said. “He was very successful then and very successful ever since. He is a dynamic personality and savvy business person.”

Along the way, Ramsey caught the bug for horse racing. He immediately loved handicapping, absorbing information and drawing conclusions that he could implement at the betting windows. Becoming a horse owner, and even a trainer of his own horses for a short time, seemed like a natural outgrowth of that passion.

Betting it all on cell phones’ potential

By the late 1980s, Ramsey again was ready for something new and focused on the potential for cell phones, deducing that they would eventually become as common as the home landline. By 1988, the federal government had already awarded cell service licenses in 305 metropolitan areas. Ramsey decided to target the lottery process that would determine the rights to provide cell service in more than 400 rural areas.

“I thought, ‘Man this is a better mouse trap,’ ” he said. “I went up to Washington, D.C., and had appointments with five different law firms to find out what was going on and how you could get in the cellular telephone business. I found out it was a lottery process, and so I engaged a law firm to file the applications for 305 rural service areas, filing for me, my wife, my children and my sister.

“I didn’t have enough money to do all that myself, so I sold applications to get enough money for myself and later on, for my wife, and on the tail end, I put my children in. People did not believe in it. I had a difficult time selling the (cell service lottery) applications. I couldn’t see how far it has advanced (today) with the smart phones and all that, but I did see that the voice part of it was going to be the future.”

Ramsey filed lottery applications for so many rural areas that he had to mortgage his Lexington farm and strategically stop making mortgage payments on his rental properties for 60 days while he “played the lottery.”

Small lottery wins, big payoff

“It was a stressful time, gambling on this and not knowing if we would win any of them,” Ramsey said. “I finally got a couple of investors where they got free applications for loaning me some money. I borrowed from Peter to pay Paul and played the entire lottery out. I didn’t win one myself, but my wife won one in Gainesville, Ga., and my sister won one in Connecticut and my children ended up winning minority pieces in several of them. That has made all of them worth $1 million apiece. In the end it worked out well – it changed my life and the lives of a whole bunch of others. I think I had seven people win a market.”

After the lottery results, firmly believing in the potential he saw, Ramsey sought to get into markets that others had won. He networked hard to meet other winners.

“I also joined in with partners to receive minority shares in 53 different markets. I really hustled to get in on those. I went to about 15 of the first cellular telephone meetings they had in the United States and got put on committees and was able to buy into other markets from getting acquainted with those people. I still have some of them today.

“Business being what it is, corporations are involved and they can do what they call a ‘Delaware squeeze’ where the majority stockholder can squeeze the minority stockholders out, figuring out how much the corporation is worth and paying the fair market value. We are still engaged in lawsuits on that after getting the ‘Delaware squeeze’ done on me in 10 or 15 markets that were very lucrative after paying all the capital costs to build the system (to provide cellular signals). I’m about all sold out of all them except retaining some towers in Kentucky and Oregon.”

Winning at Thoroughbred breeding

Ramsey diversified by buying radio stations (he owns six in Wisconsin today) and got serious in the horse game in 1994 by purchasing Almahurst Stud in north Jessamine County, alongside Harrodsburg Road/U.S. 68.

Almahurst was a successful Standardbred operation at that point, but it had a rich history as a past Thoroughbred nursery going back 100 years ago when Kentucky Derby winner Exterminator was born there. Rechristened as Ramsey Farm, it has been expanded to more than 2,000 acres over the past 25 years.

Kitten’s Joy, the star sire, has been a driving force but only after his owner and breeder made another calculated gamble, similar to his hunch with cell phones. Ramsey had two stallion prospects in 2005: Kitten’s Joy, who was the previous year’s champion turf male, and Roses In May, who had just won the $6 million Dubai World Cup. Ramsey did plenty of homework and decided to sell Roses in May to a farm in Japan and use the proceeds to acquire broodmares to breed to Kitten’s Joy, who stood his first season at Ramsey Farm in 2006.

“It was a tough choice because Roses In May was going to be a dirt sire and Kitten’s Joy was going to be a turf sire,” Ramsey said. “Turf racing wasn’t as popular then as it is today, and of course I have always wanted to breed a dirt horse who could get us into the Kentucky Derby winner’s circle, but I did research it and decided Kitten’s Joy had the better gene pool.”

Taking titles as a couple

For the first few years, Ramsey was just about the only breeder in Kentucky betting on Kitten’s Joy, and when he proved to be a sire sensation, it was a huge boon to the Ramseys’ racing stable. Ken and Sarah Ramsey captured three Breeders’ Cup races with sons and daughters of Kitten’s Joy and garnered the Eclipse Award as the nation’s leading owner three times in four years between 2011 and 2014, and they doubled up with the Eclipse Award for leading breeder also in 2013 and 2014.

Many of the sire’s best runners, like two-time Breeders’ Cup winner Stephanie’s Kitten and Dean’s Kitten, have carried the names of the Ramseys’ children and grandchildren.

For years, the Ramseys were seemingly inseparable at the racetrack, side by side to watch their horses and often to lead them into the winner’s circle. At one time, they each had their own horses – among them, Kitten’s Joy’s dam, Kitten’s First, whom Sarah Ramsey acquired for $41,000 at a 2-year-old sale in 1993. They combined forces again to strengthen their pursuit of leading owner titles.

In 2007, Sarah Ramsey suffered a debilitating stroke. Unable to speak, she still attends races close to home, watching from a wheelchair, with the family alongside at ground level rather than in the grandstand – to ease her route to the winner’s circle.

Ken Ramsey is quick to point out that Kitten’s Joy came from her mare.

“She named him, too,” he said of his wife of 61 years. “We are thankful for what we still have rather than what we lost.”

Handicapping as a business

Of all the different business interests, Ramsey singled out horse racing as a true passion.

“It has really brought a lot of memories and bonding to the family,” he said. “It is also educational. Learning how to handicap a race is a lesson in business. You sit down and figure out what horse is most likely to win, and then you have to make a decision on whether the value is there to make a bet or what your percentage chance of winning is. You get a quick return: You find out pretty quick what you did right or wrong and what you need to do to correct it. Horses have been a long-range love affair. It’s been a joy for our family and taken us all over the world.”

Besides winning the Kentucky Derby, the big remaining entry on Ramsey’s horse racing bucket list is to win a stakes race at Royal Ascot, the ultra-elite annual race meet outside London, England. He has met Queen Elizabeth II there, though, giddily accepting an invitation to join her for a visit in her suite in 2010.

“Growing up I was certainly never around any Thoroughbreds,” he marvels today. “My uncle had two mules he used for farming. That was the closest thing I came to being around a horse. I have come a long way.”

Jeff Lowe is a correspondent for The Lane ReportHe can be reached at [email protected]