S K Sagar’s insightful analysis continues with a look at two crucial ratios defining the economic health of Indian racing — the ratio of average stakes to maintenance costs (R2) and the ratio of stakes to the selling price of an average horse (R3). His calculations expose the harsh reality that these ratios are alarmingly low in India, making racehorse ownership increasingly unattractive compared to international standards.

Ratio ( R2) of The Average Stakes Offered to The Average Monthly Cost of Maintenance of a horse.

a) Consider that on average there are 8 runners in each race.
b) Consider that such an average horse who runs twenty races, wins 2.5 races, runs second 2.5 times, third 2.5 times, fourth 2.5 times, and so on, coming last 2.5 times.
c) Consider the Total stakes offered for an average class four race is 'S'.
d) Consider that only about 70 % of winning stakes goes to the owners.
e) The owner’s total income is likely to be 2.5*S*0.7
f) For the total income to be equal to the total expenditure, 2.5*S*0.7 must equal 34,38, 000

Hence S = about Rs 19.64 Lakhs.

Hence, The ratio of Average total stakes to Average monthly maintenance cost should in no case be less than 19,64, 000/45,000, ie about 43.5, if it has to be attractive for Owners.

As per current trend at RWITC (assuming S as likely to be about 700000 for an Average category race in the year 2027) and average cost of maintenance as Rs 45000, The Ratio R2 is is just about 15.5, which is very low indeed.

I was at the Chantilly racetrack (France) some years back (November 2015), the most beautiful racecourse I have ever seen anywhere in the World. I looked at the race card and made an approximate calculation that the average total stakes per race was about 25000 Euros. Now I am not very sure what was the average monthly cost of maintenance of a horse over there, but I doubt very much if it was more than 800 Euros per month, which gives a healthy ratio of 30 Plus.

I don't think anywhere else in the World (other than India), this ratio is less than 25.

3. The Ratio (R3) of The Average Stakes Offered to the Price at which The Breeders can sell an Average category Race Horse.

As worked out above this ratio needs to be greater than 19,64,000/18,00,00 , ie greater than 1.09
Currently this ratio is just about 0.40 which is very poor indeed.
It cannot go on like this for long

To be continued