Home » Breeder incentives working for Kentucky, subcommittee told

Breeder incentives working for Kentucky, subcommittee told

KBIF-registered horses eligible for cash awards

FRANKFORT, Ky. (Nov. 13, 2014) — When it comes to breeding of Thoroughbred horses, industry statistics show Kentucky bred nearly six times the number of mares in 2014 as its top competitor of Florida – and is offering breeder incentives to help make that possible.

LexHorseFarmJamie Eads, the director of the Kentucky Horse Racing Commission’s Division of Incentives and Development, told the Kentucky General Assembly’s Subcommittee on Horse Farming the Kentucky Breeders’ Incentive Fund created by statute in 2005 has provided millions of dollars of incentives for Thoroughbred, Standardbred and non-racing horses bred in Kentucky over the past eight or nine years.

Breeders who register their horse with the KBIF are eligible to win cash awards for winning eligible races throughout the world, according to a description of the program on the Kentucky Thoroughbred Association website.

“The most unique aspect of this program is we award money all over the world, so regardless of whether you’re racing in Kentucky or California, you’re going to get a breeder award for the same amount if you win the eligible race,” said Eads at a Nov. 12 meeting.

The incentives through KBIF are funded by sales taxes on fees paid for breeding a stallion to a mare in Kentucky. More than $97 million—or about 80 percent of total KBIF revenues—have been awarded for winning eligible Thoroughbred races since 2006, with $10.4 million awarded for races won in 2013, according to Commission statistics.

Early registration or “nominations” for the Kentucky Thoroughbred Breeders Incentive Fund ended with a total of 8,644 mares on Aug. 15, said Eads. That number will continue to grow through the end of the yearling year on Dec. 31, she said.

Eads added that 1,313 pregnant Thoroughbred mares in the current Keeneland sale are nominated to the KBIF and another 500 could be added. Forty mares were nominated from the state’s other major public sale at Fasig-Tipton on Nov. 3, she said.

As for Standardbred horses, Eads said the state Standardbred Breeders Incentive Fund receives 13 percent of all sales tax collected, with over $17 million allocated to standardbred breeders since the fund’s inception.

The KBIF also funds the Kentucky Horse Breeders Incentive Fund, which has provided about $9 million—or 7 percent of KBIF revenues—for non-racing breeds, including quarter horses, since the mid-2000s, said Eads.

The Commission’s Executive Director John T. Ward Jr. explained the KBIF as a jobs bill for the commonwealth.

“As we build these programs and as these programs come into the state, jobs come with them, and I think that’s the disconnect we’ve had in the past…” said Ward. “We lost horses for four or five years, but now we’re starting to gain them back.”

Senate Majority Leader Damon Thayer, said the incentive funds are drawn from moneys that were funneled to the state General Fund until the KBIF was established.

“We’re the only state in the Union that charges a sales tax for breeding a mare to a stallion, and so ever since (the KBIF was created), that money has been diverted from the General Fund to put it to much better use: incentivizing mare owners to breed their horses to Kentucky stallions and have that mare boarded here throughout the year,” said Thayer.

He said he’s glad the program is working, including language added allowing Kentucky-bred horses to earn rewards for races won outside of the U.S. “Seventy percent of the horses bred here and sold either privately or at one of our two public sales (at Keeneland or Fasig-Tipton) never race here,” said Thayer. “I think this is the appropriate step.”

The subcommittee’s House Co-Chair Rep. Susan Westrom, who chaired the Nov. 12 subcommittee meeting, delivered the subcommittee’s report to the full Interim Joint Committee on Agriculture later in the day.

“The good news is Kentucky is continuing to increase the market share and our Breeder Incentive Funds have had a positive outcome for increasing racing purses, which is certainly the incentive to keep our horses racing in the state of Kentucky,” said Westrom.