FREQUENTLY ASKED QUESTIONS
Whether your a first time owner or you've owned 100 horses before there are always situations where you might have a question or two. Here are some questions we find frequently pop up. If the answer you are looking for is not here feel free to give Nathan or Andrew a call and we'll answer any questions you may have.
Is Red Letter Racing legally able to sell shares in racehorse's?
Absolutely. Andrew and Nathan have worked extensively prior to the set up of Red Letter Racing to make sure that the company complies with ASIC's guidelines. Racehorse shares are defined as a Managed Investment Scheme under ASIC's Regulatory Guide. In order to comply with these guidelines a syndicator must be licenced under what is called an ASFL. Red Letter Racing operate under AFSL #288213.
What are the costs involved?
Red Letter Racing have made it as simple as possible for those who choose to buy a share in our horses. Included in the purchase or share price of any horse is the original purchase price + all costs that may incur from the time the hammer goes down to the time you receive confirmation that you own your share in the particular horse you chosen. Some costs that may occur post purchase include: All vet checks/certificates, PDS Compilation and Lodgement to Racing QLD, Transportation, Insurances and all fees inclusive until a set date. To ensure transparency, all costs involved in Red Letter Racing's horses are clearly published in the PDS assosciated with the particular horse you choose to take a share in.
Are there any risks involved?
Of course there are risks involved. What fun doesn't come with an element of risk? At the end of the day, we deal with animals and not machines and any horse that comes under our care will not be treated as a machine. Red Letter Racing can give no guarantee's as far as prizemoney your horse will earn or races your horse will win. However, RLR does guarantee that your horse will be given every opportunity to reach it's full potential and that you will have the opportunity to make new friends and have great fun in the process.
Can the value of my share increase?
Absolutely it can and we certainly hope that it does. Racehorse value can fluctuate during a horses racing and breeding career. This valuation swing is based around both the horses success on the track and the success of the family the horse is from. A share in a horse represents earning potential both on and off the racetrack. If your horse is a Filly/Mare or Colt/Entire and has had success on the track they can become quite valuable as breeding prospects and may attract interest from leading stud farms. If your horse is a gelding and therefore has no breeding future he can still increase in value as potential owners look to buy straight into a horse they know they will have fun with immediately. International owners actively seek geldings for racing longevity. Exposed form, breeding and age are all deciding factors in whether a horses value will increase or decrease.
What percentage of prizemoney will I get?
You will receive the percentage of "Net Prizemoney" equal to what percentage you own. It is Australian Standard that any horse that wins prizemoney is subject to the passing on of 10% to the Trainer and 5% to the jockey that rides your horse. What is left is the "Net Prizemoney". This is distributed to all owners according to their percentage share. It is the Racing Authorities (RacingQLD, RacingNSW, RacingVIC etc) responsibility to allocate prizemoney to all owners who own 5% and above. Payment is generally sent out at the end of every month. Red Letter Racing Pty Ltd do not take any prizemoney unless Red Letter Racing Pty Ltd own a percentage of the horse and therefore would receive prizemoney according to our percentage just as any other owner would.
What happens after the horse has been purchased from the sale?
Once the hammer goes down and the horse is secured by Red Letter Racing, the horse is either transported to the trainers stables or the chosen agistment property where they will be prepared to be "broken-in." How long until the breaking-in process begins is dependant on the horses mental/physical state and is left to the trainers discretion. Our aim is to get the horse up and running as soon as possible whilst being vigilant to the horses requirements. The horse will indicate to us when it is ready to begin it's education. In the meantime, Red Letter Racing will organise the appropriate insurance for the horse and prepare the PDS for public sale. Once, the horse is fully syndicated the horse will then be able to named. This is when the fun begins!
How do I know what is happening with my horse?
You pay for the horse therefore you own the horse and as such you have every right to know what is happening with your horse. It is the duty of Red Letter Racing to keep you informed as much as possible. You will be regularly updated via the website, email or in some instances via phone. When anything significant happens with your horse, you will know about it!
As an owner, What privileges do I get?
There is owning a horse and then there is owning a horse with Red Letter Racing. Like all owners your privileges would include: Your name in the racebook (maximum of 20 names), Free Course Entry, Free Racebook, RaceDay Tickets into the Members Stand, Passes to enter the saddling enclosure where you can listen in to jockey's instructions and jockey/trainers assessment post race, opportunity to lead the horse back to the winner's circle after a featured race win, Invitation from the Race Club hosting the days racing to enjoy the club's hospitality and watch race day replays in the Winner's Room with other owners, Prizemoney paid directly into your account from the Racing Authority. Owning a horse with Red Letter Racing grants you opportunity to be part of not only a racehorse syndication but also a chance to mingle with like minded people and participate is Red Letter Racing Functions and Events held throughout the year where you may be subject to more prizes!
Where does the horse spell when not in training?
Majority of racehorses spell in what are called agistment properties. Red Letter Racing makes use multiple agistment properties. The trainer may want to utilise the services of one agistment property over another throughout the racing career of a horse. If the horse requires only a short spell the trainer may want to send it to a local agistment property where the trainer can keep a closer eye on it or the trainer may want to send the horse to a spelling paddock who's services include pre-training of the horse. There is a variety of reasons to choose one agistment property over another and this is the reason Red Letter Racing utilise multiple agisters. Which property the horse is sent to is left to the judgement of the trainer and the agistment property your horse is residing in will be outlined to you in due course.
Do I have insurance for my horse?
It's important to note that Red Letter Racing are not insurance agents. However, when a share is offered by Red Letter Racing, it does include insurance for your horse. This insurance is time limited and generally runs for one year from the day the horse is purchased. On the date that the insurance is expired each shareholder may individually choose whether they want to insure their share of the horse at their own expense. It is not essential to insure, it is up to your personal preference, some owners choose to insure their share and some don't. It is always the preference of Red Letter Racing that owners insure their share however Red Letter Racing would recommend you consider your own personal position and make your own judgement.
As a general rule, it costs about 4% of your purchase price annually to insure a Racehorse. I.E - If your 5% share cost $5,000 your annual insurance bill will total approximately $200.00. Upon owners request Red Letter Racing will look after the necessary documentation with your chosen insurance provider on your behalf. Should you decide to insure your share, please feel free to contact Red Letter Racing and Nathan or Andrew will put you in contact with the right people.
How do I receive prizemoney?
If you own a share of 5% or greater, prizemoney will be direct deposited into your nominated bank account by the Racing Authorities at the end of every month. Should you own less than 5% share, the prizemoney will be deposited into a Red Letter Racing Trust Account and pushed through to your nominated bank account at the soonest possible time.
How do I get out if I can't afford it anymore?
There are many reason someone would look to sell their share in a racehorse.
1) You have come into financial hardship, change of marital status, re-locating oversea's
2) The horse is not showing enough promise as a racing prospect for your liking.
Your share in a racehorse is a trade able commodity. However, like a house or a car it is something that may take a bit of time to find a buyer. If you have unfortunately come to decide you need to trade or sell your share in your racehorse we would ask that you contact Red Letter Racing to discuss all possible options for you. Should there be no viable option for your situation we would organise an evaluation of your share via one of the numerous auction houses. The share would then be put up for sale firstly to other owners within the horse. While the horse is being proposed to the other owners the seller of the share is free to search for a buyer themselves however co-owners and Red Letter Racing reserve the right to have highest priority to the available share. It is important that any new owner into the horse agrees to the Red Letter Racing Product Disclosure Statement.
It's important to consider that if your horse is showing racing ability it will be alot easier to sell your share in the horse than if the horse is not yet showing ability. If through injury, illness or lack of ability the horse has not reached our expectations Red Letter Racing would make formal contact with everyone involved in the horse with a view to dissolving the syndicate. Should the majority vote in favour of dissolving the syndicate, the preferred method of sale would be a tried horse sale. Tried horse sales are held quarterly through both Magic Millions and Inglis Auction house. On some occasions the horse would be subject to a private sale.