Horse Racing Class System Basics for US & Canada

Daniel Collins

Written by: Daniel Collins

Last Updated:

Read Time: 11 minutes

Horse racing is of course one of the greatest and most interesting gambling opportunities for bettors, but it is also a real sport and fascinating industry for its participants.

At the root of horse racing is the breeder and the owner. These people invest time and money to breed horses in order to produce offspring that can hopefully compete at the highest levels of the sport.

The owner can be a party at the very beginning of the process, helping finance the breeding of high class females with the most successful studs, or he can purchase horses at auction, privately or in claiming races. More on those later.

The owner might invest and spend money for the love of the game or for the love of horses but generally he also has a financial motivation in mind. If he breeds or buys the right horses he will make a profit racing them.

How much money he makes will depend largely on the class in which the horse races.

A separate article gives some information about the breeding of racehorses and what it means for players but in the present article we concentrate on another fundamental element: the racehorse’s class and the racing levels.

As usual, we concentrate here on USA and Canada but most of the concepts explained here apply to any country where one can gamble on horse racing.

Why worry about “class” when betting on horse racing?

Put simply, paying attention to class allows you to separate likely contenders from posers.

Here is an analogy: every horse can run, just like every human can throw a ball.

This being said, some humans throw the ball well enough to play in Major League Baseball while those who are a bit less talented can throw the ball in Minor League Baseball. And at the lowest echelon, normal people can barely throw the ball well enough to play catch in the yard with their children…

Similarly, there is a vast difference of speed, and capacity to best opponents, among horses. Even some well-bred racehorses don’t have what it takes for “Major League Horse Racing”, they need to settle for the minors: minor class levels and minor racetracks.

In horse racing, and keeping with the analogy of baseball, there are actually dozens of “leagues”: the different levels of conditions and class.

The trainer needs to find the spot where his horse competes well enough to turn a profit for the owner or at least pay the hay and trainer… If the horse is outmatched at that level, the responsible trainer will make it go down one step and try to compete there, to win shares of the prize money.

If before a race you can estimate whether or not a horse has the class needed to perform at today’s level, you have done half the handicapping of the race. You can throw out the posers and concentrate on the contenders.

Who determines the horse’s class?

Nature and training determine the talent of the horse and economics do a wonderful job at putting the horse in the right class for its talent.

Basically, the trainer selects the races in which a horse competes, and because he is tasked by the owner to win races he should pick a spot where the horse has a chance. If he fails too much, the owner will likely switch trainers… Moreover, the trainer is motivated to find the winning class level for every horse because the majority of the trainer’s pay comes from a commission on every prizemoney earned by the horse. If the horse can’t win, the trainer can’t make money.

The trainer therefore wants to find the sweet spot where the horse has the capacity to win relatively often but for the most money possible every time, meaning, at the highest realistic class level for that horse.

For gamblers, the fact that all trainers are motivated to place the horse at the most economically interesting class level is great. It ensures that most races are relatively competitive, with a well-balanced group of horses. This in turns ensures that betting on the race is interesting. There might be a betting favorite but all the horses in the race have a chance of winning it, they are not completely outmatched.

In addition to the basic motivation for the trainer to place the horse where it can reasonably win money, in the USA and Canada, there is a system which contributes to making sure the horse runs in the best race category that it can compete in: the system of claiming races.

The claiming races are the base class and you will find them at every racetrack in America.

Claiming Races, the foundation class of horse racing

The claiming race is usually not the first race where a horse will first compete; meaning that it is not the first step in the natural class progression in the horse racing world.

It is however the foundation of American horse racing and the bread and butter of most trainers. This is therefore where we begin our exploration of the horse racing class system in the USA and Canada.

The claiming race is a race where every horse entered to compete is offered at a price to any registered trainer or owner who wants to buy it. Most claiming races are open to any horse,

without condition except that if you run, your horse can be “claimed” by someone else and be bought for a determined price.

Most often, all the horses in the race are offered for the exact same price. It means that for instance, in a $20 000 Claiming Race, every single horse competing in the race can be bought for the price of $20 000 by anyone who wants it. The person who wants to buy it needs to declare the claim before the start of the race and win or lose, he will be the new owner after the race.

Why are claiming races so fundamental in the horse racing world?

The answer to the question is simple: the claiming race keeps the owners honest.

It would be very easy for a horse worth $50 000 to win a claiming race of $10 000. The higher value horse would likely destroy the field of cheaper horses. That would be an easy payday for the owner as the claiming race comes of course with prize money (separate from horses’ sale price).

But why would the owner enter a horse worth $50 000 in a race where anyone can buy it for $10 000? He would lose the horse right away and the potential prize money would not be nearly enough to justify it.

The claiming price therefore ensures that the horses entered in the race are all of a reasonably similar caliber.

The trainers enter the horses at a level where it can win but also at a level where it would be relatively neutral economically to have to sell the horse. If you think your horse is worth $10 001, having it claimed at a price of $10 000 is a wash. No one gets hurt.

There are varying levels of claiming races and the both the prize money and the horses’ sale prices vary according to the racetrack where the race takes place and according to the race.

On the smaller tracks, you may have claiming races where all the horses are put for sale for $2000 to $20 000. On larger circuits, you could have a range of claiming classes from $10 000 to $50 000.

Usually, the more valuable horses do not compete in claiming races, they are privately bought and sold, and they race in higher class categories: the allowance races and stakes races.

But before we cover those, let’s discuss what is actually the first stepping stone for a horse.

The Maiden race, where is all begins for the racehorse

Horses who have never won a race are given the chance to do so every day at every racetrack in the country with a race reserved for them: the Maiden race.

In a Maiden race, only horses who have never won can compete. It could be their very first race attempt or maybe they lost a few times. It does not matter, as long as they never won in their career.

In a Maiden race, you will usually see a majority of horses who have not yet competed. This is their very first race. You will also find some horses with a couple of races under their belts, maybe some races at higher class levels and now they try an easier class level.

Maiden races come with a variety of prize money levels and the trainer can chose at what level he wants to enter the horse. But once again, his goal is for the horse to have a winning chance, so the trainer will pick the most realistic level if he is good at his job.

The standard format for Maiden races is the Maiden Special Weight. In that format, the horses are not for sale and the horses carry a different weight depending on their age.

Maiden races also come in the Claiming format and just as the regular claimers it means that the horses competing can be bought at a fixed prize.

Unless the horse is of terrible quality or breeding, it is pretty rare for a responsible trainer to enter the horse in a Maiden Claimer for his very first race. Usually the Maiden Claiming racers have proven to not being good enough for the Maiden Special Weight and horses go down to that class level after failing upstairs.

Of course, there is always a winner in a race, and therefore one horse will need to graduate out of the Maiden class after the race.

He can go straight to claiming if it becomes apparent to his trainer and owner that he is of lower class or he can go on to compete at the higher level of horse racing.

Usually in Allowance races.

Allowance races, the second step in class levels

The allowance races are basically the middle class of the horse racing world.

The prize money can be interesting but there is no real honor in competing in those. The horses which stay at these class levels do not become superstars. They are the proletariat of racing.

In an allowance race, the conditions of entry can be confusing even for experienced bettors. The most basic idea is that in these allowance races, not every horse can compete: they need to meet certain criteria and there might be different weights to carry depending on whether or not the horse meets all criteria.

The criteria could be that they should not have won more than one race. Or maybe not more than 2 races except if the races where claiming races.

The condition of racing could also be opening the door to other horses but with a weight penalty. For instance, it could be that the race is normally for horses who have not won a race for more than $10 000 since last month OR won a race for more than $15000 since the start of the year. But if the horse is in this second category, it needs to carry more weight.

The race organizers want a level playing field where every participant has a decent chance of winning. No one wants to bet if the winner is known before the race, so the organizers set these allowance rules to ensure that the horses racing are more or less of the same caliber.

As mentioned above, there are dozens of possible allowance conditions and a horse can navigate a whole career at these levels, but the most talented horses move on to better things and start competing at the highest echelons: Stakes races.

Stakes, the top levels of the horse racing world

These are the levels where every breeder and owner hope to see their horse compete.

Of course, they wish that it competes in the highest level of races: the Grade One races like the Kentucky Derby, Belmont Stakes, or the Breeder’s Cup to name a few.

But they will settle for the other echelons of Stakes races, From Grade II to state-bred stakes. These are still amongst the best races in the world and good money is to be won in these.

Stakes races are those where the owner needs to pony up (pun intended) some money to enter.

A good deal of the Prize Money will be provided by the racetrack and organizer, but the owners need to put their money where their mouth is and pay up something to participate.

In the Kentucky Derby for instance, the owner needs to pay at least $50 000 to see its horse compete in the race. (Note: the horse needs to qualify first too!)

There are multiple levels of stakes with various levels of prize money, from $50 000 to over a million dollar.

Some cheaper stakes are reserved for horses bred in a certain state, for instance it could be for New-York bred horses or Florida bred horses. These are the lowest level of stakes race as only local horses can participate.

Other stakes are open and in these the competition is usually more serious (and class level higher) because it may attract horses from other states or even from abroad.

The higher levels of stakes races are the graded stakes, the royal class of racing.

The best quality horses compete at the highest class levels: the Graded stakes.

These are the races where there is the most money to be won and where horses’ reputations are built.

There are three levels of Graded Stakes: Grade I, Grade II and Grade III.

The top level is the Grade I Stakes race and to be classified as such, the race must be approved by a national and international committee for race grading. This ensures that Grade I races in the USA, Canada, United Kingdom, France, Ireland, Italy and Germany are truly of the top caliber.

The need to classify these races is important for horse breeders and stud bragging rights.

A separate article touches on the basics of breeding but in short: it costs money to have your female horse get impregnated by the best studs. Sometimes a LOT of money. The amount of money that it costs depends largely on the success that previous offspring of that stud have had in graded stakes, what we call the black type in the breeding world.

Knowing which races are the real Grade I Stakes in the world, the true, undeniable best races in the world, is therefore crucial for breeders and this is why these committees exist. They analyze and classify stakes races to determine those that are of the highest caliber.

The most famous events of horse racing in the world are Grade I stakes races.

These include these famous races in the USA:

  • Kentucky Derby
  • Kentucky Oaks
  • Belmont Stakes
  • Preakness Stakes
  • Breeders’ Cup Classic
  • Breeders’ Cup Distaff
  • Breeders’ Cup Futurity
  • Gold Cup at Santa Anita Stakes
  • Santa Anita Derby
  • Gulfstream Park Turf Handicap
  • Pegasus World Cup
  • Travers Stakes

Winning a Grade I race means a lot of prize money for the owner but also a great increase in his horse’s value, both resale value and potential stud value.

This is why the Graded Stakes, especially Grade I stakes, are the ultimate goal of any racehorse owner.

To win a Grade I, the horse must be one of the best in the world and there is a steep climb from even the class level of Grade II. Not every horse can make it… Similarly, not every Grade III winner can manage to hold its place in a Grade II. At such a high level of racing, the class of the horse must be top notch for it to have any chance of winning.

The true class of a racehorse is elusive, for trainers and owners but even more for bettors.

Those well versed on the conditions of eligibility, natural progression of horses and overall knowledge of the racing categories and class structure will have an edge…

In another article we give some basic pointers on what to look at when trying to use class to find winners.

But we encourage those who want to find success betting on horse racing to keep researching the fascinating question of class and racing categories. It is an endless but fascinating pursuit and players who master this question will cash in their bets a lot more than others!