

Horse Racing Syndicates

Horse racing syndicates involve the purchase of a racehorse which is then entered into events. It can be a substantial investment to do so, yet many people partake of such a scheme.

Many people are familiar with syndicates in the context of playing the national lottery or other gambling activities, but racehorse syndicates are a fast-growing trend in the UK. Simply put, a number of individuals will put money into the syndicate to pay for the purchase of a racehorse which is then entered into prize events. If any prizes are won, these are divided between the members of the syndicate.

Lottery syndicates can usually be operated with a minimum of formality (although at the very least a written syndicate agreement is necessary) but this is largely due to the fact that there are usually not more than a few dozen syndicate members. However, in the case of a racehorse syndicate, the large capital outlay which is necessary to purchase the horse means that in many cases there may be a great many contributors to the purchase price.

In addition, unlike a lottery syndicate, a racehorse syndicate will have continual ongoing costs which may vary from month to month. For example, the racehorse will need to be hosted at a livery stable, and there is also the cost of food, training fees, veterinarian bills and also any charges or fees for race entry.

A professionally drafted syndicate agreement is necessary in order to avoid disputes at a later stage. It is also important to remember that unless there is a valid written syndicate agreement in place, it may be difficult to prove the existence of a racehorse syndicate to the satisfaction of Her Majesty’s Revenue and Customs and this means that there will be tax complications when it comes to dividing up prize monies amongst the syndicate members.

The members of a racehorse syndicate will also have ongoing decision making responsibilities. For example, they will need to agree where the horse should be stabled, how it should be trained and what races it should be entered into, as well as arranging transport and dealing with other logistical matters. The syndicate agreement should specify how these decisions will be made, and may provide for the selection of a single member to manage the horse on behalf of the group.

When a racing syndicate dissolves it is often necessary to involve a solicitor who specialises in this field. There may be outstanding invoices to pay in respect of the racehorses stabling expenses, and then there is the question of what should happen to the racehorse, and ho the members leaving the syndicate may realise their equity in the horse. This is an easier question to resolve when one or more members of the syndicate are willing to buy out the other members’ shares in the racehorse, otherwise the solicitor may need to arrange a buyer for the racehorse.

Other legal topics that may interest you