How a Trump Tax Break Rescued Horse Racing
•February 16, 2026
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Why It Matters
The tax break dramatically improves owners’ liquidity, accelerating spending and stabilizing a historically volatile industry. It signals how fiscal policy can revive niche sports facing cultural and economic headwinds.
Key Takeaways
- •Owners spent $1.5B on horses, up 21% YoY
- •Yearling sales hit $531.5M, 24% increase
- •Bonus depreciation lets owners deduct full purchase cost
- •Safety authority and track upgrades invested over $1B
- •Improved cash flow spurs renewed investment in racing
Pulse Analysis
The horse‑racing sector, long plagued by safety concerns and dwindling public interest, is experiencing an unexpected surge. In 2025 owners collectively invested $1.5 billion in new thoroughbreds, and premier auctions like Keeneland’s September Yearling Sale shattered previous records with $531.5 million in transactions. Parallel to this spending, the Horseracing Integrity and Safety Authority and state‑backed track renovations have poured more than a billion dollars into safer, modern facilities, helping to restore confidence among bettors and sponsors.
At the heart of the financial upswing is a provision from the 2024 Tax Cuts known as bonus depreciation. Unlike standard depreciation schedules that spread expense over several years, this rule permits businesses to write off the entire cost of qualifying assets—such as racehorses—immediately. The result is a substantial cash‑flow boost, allowing owners to reinvest earnings faster and reduce taxable income in the short term. This mechanism mirrors incentives used in manufacturing and technology sectors, where rapid capital turnover is essential for growth, and it has now become a pivotal lever for the equine market.
While the tax incentive provides a powerful catalyst, reliance on legislative benefits raises questions about long‑term sustainability. Should future administrations roll back or modify the depreciation rules, owners could face tighter financing constraints, potentially slowing the momentum built over the past two years. Nonetheless, the current environment offers ancillary benefits: increased demand for veterinary services, feed suppliers, and ancillary tourism in racing hubs. Stakeholders are watching closely, balancing the immediate gains from the tax break against the need for structural reforms that ensure the sport’s resilience beyond any single fiscal policy.
How a Trump Tax Break Rescued Horse Racing
Owners spent nearly $1.5 billion last year on racehorses, a big increase over 2024. A new tax provision allows them to immediately deduct the full cost of the purchase.
By Joe Drape
Reporting from the bluegrass in central Kentucky
Published February 16, 2026
Credit…Video by Jon Cherry For The New York Times
Horse racing, one of America’s oldest sports, has repeatedly been left for dead. Worries over animal safety, cheating scandals and competition from online gambling have undermined racing’s appeal.
But lately, horse racing is seeing a renaissance. Last year, owners spent nearly $1.5 billion in pursuit of fast racehorses in North America, a nearly 21 percent increase from 2024. The Keeneland September Yearling Sale, one of the premier horse auctions, set a global record with $531.5 million in total sales, up nearly 24 percent from the year before.
Bid spotters and handlers working the auction floor during the October Yearling Sale at Fasig‑Tipton in Lexington, Ky., in 2025.
Credit…Jon Cherry for The New York Times
The sport has been helped by a series of aggressive safety measures for the animals. The Horseracing Integrity and Safety Authority was created in 2022 to root out and punish cheaters, and more than a billion dollars have been invested in new racetracks in New York and Maryland and upgrades to tracks in Kentucky.
But a big impetus of the recent cash infusion into the Sport of Kings has come from a tax break tucked away in President Trump’s One Big Beautiful Bill, which he signed into law last summer.
The tax provision — called a bonus depreciation — means businesses can immediately deduct the full cost of certain assets, like machinery and equipment, and enhance their cash flow.
Joe Drape is a Times reporter writing about how the intersection of money, power and sports impacts our culture.
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