A Numbers Game

Fractional ownership presents unique opportunities to grow the sport

story by James Witherite

“When your horse is in front, coming down the stretch, it is as big of a thrill as you can imagine.”

In the 20 years since Aberdasher first gave him the thrill of victory in 2000, Ed O’Connor has shared the winning experience with hundreds of owners through his VIP Stable. In recent years, ownership syndicates like his have spread the thrill of victory to thousands of North American harness racing participants, but the landscape hasn’t always been so rosy for those who don’t have the means or desire to shoulder the entire risk and reward of a given horse.

“It kind of came out of necessity,” said O’Connor, who grew up an avid racing fan near Saratoga Springs, N.Y., and admittedly spent way too many college nights at the harness track.

A few years after graduating from Siena College in Loudonville, N.Y., in 1989 with a degree in business and accounting, O’Connor contemplated dabbling in Standardbred ownership, but saw a comparative lack of opportunity in harness racing as compared to Thoroughbred racing.

“When I got a little bit older and had a few dollars and was looking around I thought, ‘Hey, I’d like to own a little bit of a Standardbred’; at that point in time there really were not any options,” O’Connor said. “I could have gone to any of a dozen Thoroughbred syndicates at that time—there are probably a hundred now. The Thoroughbred side was pretty well-established. On the harness side, I think there were a couple that were kind of regional, but it was just not something that was really available. So, I said, ‘Let me see if I can do something like that.’ I ended up putting a small ad somewhere on the internet, found a couple guys, we each put in a few dollars and we bought a quarter of one horse, and it started there.”

From those modest beginnings, the VIP Stable has blossomed into a 150-member syndicate with around 60 horses in training—including Trillions Hanover, who won the Lady Maud Pace at Yonkers Raceway on Aug. 31. The syndicate won a Dan Patch Award in 2017 with Keystone Velocity and not only continues to open the door for many to own elite horses, but also has paved the way for other syndicates to pop up across North America.

Plenty of Options

The VIP Stable provides its members with a taste of stakes competition, but the offerings across the growing landscape of fractional ownership have become extremely diverse.

“Over the last several years, the idea of fractional ownership has really exploded,” O’Connor said. “There have been some groups who focus on yearlings, some groups who have been kind of regional and focused on bringing people to a particular track. There’ve been some other guys who started things that are kind of akin to what we do—general-type partnerships—and I think it’s really great.”

One such general partnership is Winners Circle Racing, which started in 2015 with one horse and 10 owners. Since Fox Valley Leo first raced under the Winners Circle banner, it has grown into a nine-horse stable—primarily claimers and raceway stock—with 48 investors spread throughout 12 states and overseas.

“It’s evolved,” said Matt Zuccarello, who founded Winners Circle Racing with Charlie Longo. “Our model is definitely cost-effective for someone looking to get involved in the industry.”

With its focus on more established horses who campaign in the claiming ranks—and thus yielding the probability of a prompt return on investment—Winners Circle’s success stories may not crack the same headlines as the likes of Trillions Hanover and Keystone Velocity. But the graduation of horses from the claiming ranks into upper-level conditioned company and Open-class events—especially given the large purses at their home base of Yonkers Raceway—is worth celebrating just the same.

“We had Aston Hill Dave, who we claimed as a 4-year-old last year,” Zuccarello said. “He won for us pretty quickly. He stepped up from 30 claimers to the 40s to the Open, and he finished in the money in the Open.”

Additionally, Winners Circle Racing is in the midst of its best year to date, with its nine-horse stable having earned more than $250,000 and keeping the partnership in the black each month so far in 2019.

On the other hand, the LandMark Racing Stables of Ontario is a group focused on young stakes-bound horses, and has only occasionally deviated from that model in its 12 years of existence.

“We average about 100 shares each year,” said Howard Pearce, managing partner of LandMark. “I’m hoping for more this year, because the more shares we sell, the more horses we can buy.” Shares are priced at C$2,000 each, and the reduction of that initial outlay from C$5,000 contributed to an increased number of participants.

In 2018, the 57 shareholders in the LandMark 12 partnership—led by Pearce and trainer Mark Steacy—joined forces to buy into five yearlings last fall. Already, two of them—Cute Accountant and Remember Titans—have finished in the money in Ontario Sires Stakes Grassroots events as 2-year-olds.

“We focus on the Ontario-breds, and that way we are supporting the Ontario Sires Stakes program and the Ontario breeders,” said Pearce, noting that the majority of LandMark’s partners are themselves based in Ontario. “We may divert from that once in a while, but basically we’re looking at Ontario-breds.”

And while the business model differs from both VIP and Winners Circle—LandMark sells off most of its horses at the end of their 3-year-old season before dispersing the proceeds back to shareholders—the potential for success on the grand stage isn’t lacking. In 2014, LandMark 6 owned 25 percent of Harper Blue Chip, who finished third to Trixton in the Hambletonian before capturing the $222,500 Ontario Sires Stakes Super final in October.

“He became our signature horse,” Pearce said. “That year, the shares were $5,000, and that is the year everybody did make a profit. When we dispersed the stable, we sent out checks for like $8,400. Harper won a lot of money; he was fun to own.”

Cutting the Cost

Regardless of business model or geographical reach, the major commonality across fractional ownership syndicates is a simple one: making the thrill of victory a more affordable proposition for people who are already invested in harness racing as fans and bettors.

“The most common (shareholders) are people who have always wanted to dip into ownership—longtime fans, longtime bettors, longtime going-to-the-races people—who could never afford ownership,” said Pearce. “Here’s a way to get involved for a very modest investment.”

O’Connor has had similar experiences in terms of where new VIP partners surface.

“It’s probably 90 percent people who are at least casual fans of horse racing,” he said. “We haven’t brought a lot of new people into the game, but the people who have been casual fans or went to the track with their dad when they were younger and they’re reconnecting with it—we have really expanded their interest in the game.

“A big part of the return in this game is the enjoyment you get. There’s a fraction of the horses we’ve had that have made a lot of money. A lot more of them are break-even horses, and the enjoyment owners get is going to watch them, following them every week, understanding how they’re going to do, maybe cashing a ticket on them.

“At the end of the day, we have partners who have just as much fun racing a $4,000 claimer at Monticello when they win compared to guys who race Open-type horses when they’re not doing well.”

Pearce cautions there is no guarantee of making a profit, but simultaneously stresses that the experience of ownership does not diminish.

“We compare it to buying a golf membership—you’re going to enjoy the ride and enjoy the fun of watching these horses develop,” he said. “We sell the idea of experiencing the fun of going to the races and owning a small piece of those horses. People forget that they own 1 percent; those winner’s circle photos are just a treasure.”

Zuccarello echoes that sentiment.

“We try to give the total experience without having to buy 100 percent of a horse; we try to do our due diligence to keep everyone excited and informed,” he said. “One of the investors on our trotter drives up (to Yonkers) from Toms River, N.J., every time he races. Rain, snow or shine, we usually have multiple investors who watch the race live on the apron.”

As is evident across the scope of fractional ownership, fans and bettors are slowly but steadily turning into owners, and O’Connor is optimistic that the trend will continue—not just for the good of VIP, but for the good of the game.

“I honestly think it really is the way harness racing can continue to grow,” he said. “I think a little of the misconception of fractional ownership is that it’s people with two nickels and they don’t have the financial means to do something on their own. I look at it as the exact opposite. I think it’s a great way for folks who otherwise can do this on their own to lean on our experience, to use our ability to bring in a number of like-minded folks to go after some really exciting horses. I think that’s the biggest opportunity—not just to dip your toe in the water, but to look at throwing the ball far downfield. Maybe you own three or four horses on your own, but you go in with a couple guys and buy a really nice stakes horse.

“The more of that happening, the better it is for everybody.”

James Witherite is a freelance writer living in Delaware. To comment on this story, email us at readerforum@ustrotting.com.


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