652. Inside the Horse-Industrial Complex

Summary

Freakonomics Radio Episode 652: "Inside the Horse-Industrial Complex"

Release Date: November 7, 2025
Host: Stephen J. Dubner

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Episode Overview

In this second installment of the "The Horse Is Us" series, Stephen J. Dubner explores the rarely-seen mechanics, economics, and personalities of the modern thoroughbred horse industry. The episode journeys from elite Kentucky breeding sheds to backstretch immigrant labor, examining how the "horse-industrial complex" sustains itself as a business, a subculture, and a piece of Americana. We meet a Triple Crown winner, dissect the jockey’s craft and compensation, unravel the aggressive economics of breeding, and learn why Kentucky has kept its dominance in the industry — and why, uniquely, artificial insemination is forbidden in the world of thoroughbred racing.

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Key Discussion Points and Insights

1. The Stud Farm and Live Breeding

• [01:46 - 05:36] Dubner is introduced to American Pharoah (Triple Crown winner and current stud), guided by Emily Plant, horse lover and equine statistician.
  • Bloodline is everything: American Pharoah commands a $45,000 stud fee, once as high as $200,000. His owner, Ashford Stud (Coolmore America), paid $23 million for him.
  • Live cover only: Despite risks and costs, all thoroughbred breeding is done via natural mating, never artificial insemination, for both tradition and regulatory reasons.
  • Danger: Breeding involves padded walls, handlers in safety gear; “these are horses worth $50, $100 million” (Emily Plant, [04:27]).

2. What Is a Jockey — And What Makes a Great One?

• [07:36 - 26:21] Interview with Richard Migliori: former champion jockey, now racing analyst.
  • Horse-jockey relationship: "Horses are very much like people... The difference is a horse will never hide their true identity from you." (Migliori, [07:36])
  • Physical and mental demands:
    • Life “looking through a keyhole” ([14:09]): extreme calorie restriction, physical risks (multiple neck breaks, concussions), and constant pressure.
    • Early talent is about “raw physicality and exuberance”; experience adds mental edge.
  • Career economics:
    • 10% of winner’s purse, 5% for second/third, plus a per-mount fee ([20:15]–[20:46]).
    • Typical riding day: 8–10 races ([20:49]).
  • Risks and safety:
    • Serious injuries common; fatalities rare but present ([22:42]).
    • "Father time is undefeated.” (Migliori, reflecting on aging out after injury, [21:25])

3. The “Horse-Industrial Complex” in Kentucky

• [30:24 - 34:22]
  • Kentucky's role: “About 60% of all thoroughbred foals born in North America are born here in Central Kentucky." (Jill Stowe, [30:24])
  • The cluster effect:
    • Massive secondary industries (vets, farriers, transportation, muck removal, specialty laundromats).
    • Kentucky Equine Program: no riding, but rigorous scientific and business coursework ([31:45]).
  • Industry size: 31,000 equine operations; $6.5 billion annual impact; one star above all others: the horse ([33:09]).

4. Thoroughbred Auctions and the Economics of Racing

• [34:28 - 41:28] Interview with Mark Taylor, president of TaylorMade Farm.
  • Yearling sales: Premier auction is Keeneland. $400M in gross sales last year ([36:43]).
  • TaylorMade’s scale: Manages 120+ employees; ~10–12% of Keeneland market ([37:24]).
  • Profitability and uncertainty:
    • Breeding has “more predictability” than racing ([37:58]).
    • "Less than 1% become grade one winners," but healthy purses mean non-superstars can still succeed ([38:42]).

5. Genetics, Breeding Practices, and “Live Cover” Rule

• [41:32 - 46:10]
  • Genetics:
    • All thoroughbred sires are good, only some are great (Curlin, Not This Time).
    • “His genetic switch is flipped on. I’m not a geneticist, but some of these horses...pass on their talent and others don’t. It’s a great mystery.” (Mark Taylor, [42:36])
  • Stud management:
    • Stallions now breed 200+ mares/year thanks to medical advances.
    • Psychological care is crucial: redesign of stallion housing reduces aggression ([46:10]).
    • “Between breedings…it’s their version of smoking a cigarette.” ([47:54])

6. Transparency, Opportunity, and Social Mobility

• [49:08 - 51:11]
  • Public auctions (vs. private sales for other horse sports) foster access and transparency.
  • “Everybody rubs shoulders, from the grooms to the billionaires. The starting gate is the great equalizer.” ([50:36])

7. Backstretch Labor and Immigration

• [54:18 - 58:42] Oscar Gonzalez, vice chair of California Horse Racing Board, and Mark Taylor on labor realities.
  • Most horse care workers are immigrants, many on H2B or H2A visas.
  • Immigration system is vital and needs reform (better opportunities, portability, community integration).
  • "They're a big part of our industry, and they're vital to our ability to function." (Mark Taylor, [57:36])

8. Why Kentucky Still Reigns Supreme

• [58:51 - 62:25]
  • Soil, climate, proximity to expertise — and the critical stallion concentration.
  • “The number one reason is location of the stallions…If all the stallions moved to Nome, Alaska tomorrow, the new epicenter would be Nome.” (Mark Taylor, [60:38])
  • Artificial insemination is forbidden to limit overbreeding and keep the stallion market geographically tight; it also protects Kentucky’s dominance ([61:30]–[62:25]).

9. The Market Outlook

• [62:52 - 64:39]
  • Mark Taylor forecasts optimism for the upcoming Keeneland sale, with tax laws and strong interest buoying demand and record prices anticipated.

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Notable Quotes & Memorable Moments

• Emily Plant, on live cover and value of stallions:
  "[T]hese are horses that are worth 50, $100 million." ([04:27])
• Richard Migliori, on horse personalities:
  "Horses are very much like people...The difference is a horse will never hide their true identity from you." ([07:36])
• On the physical cost of being a jockey:
  "You're living life looking through a keyhole...I was living on 7 to 800 calories a day." (Migliori, [14:09])
• On breeding innovation:
  "Some of these stallions can breed over 200 mares per year." (Mark Taylor, [45:27])
• On Kentucky’s dominance:
  "If all the stallions moved to Nome, Alaska tomorrow, the new epicenter would be Nome, Alaska." (Mark Taylor, [60:38])
• On the open tent of the business:
  "Everybody rubs shoulders, from the grooms to the billionaires. The starting gate is the great equalizer." (Mark Taylor, [50:36])
• On artificial insemination and Kentucky’s motives:
  "I've never really heard anybody else talk about that, but to me, that's just a fact." (Mark Taylor on banning AI to protect Kentucky, [62:25])

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Timestamps for Important Segments

| Segment Topic | Speaker(s) | Timestamp | |---|---|---| | American Pharoah and Stud Fees | Emily Plant, Dubner | 01:46 – 05:36 | | The Life of a Jockey | Richard Migliori, Dubner | 07:36 – 26:21 | | Kentucky as Equine Capital, Economic Impact | Jill Stowe, Dubner | 30:24 – 34:22 | | The Auction Economy | Mark Taylor, Dubner | 34:28 – 41:28 | | Breeding, Genetics, and Live Cover | Mark Taylor, Dubner | 41:32 – 46:10 | | Transparency & Mobility | Mark Taylor, Dubner | 49:08 – 51:11 | | Labor Force & Immigration | Oscar Gonzalez, Mark Taylor, Dubner | 54:18 – 58:42 | | Kentucky's Ongoing Dominance | Mark Taylor, Dubner | 58:51 – 62:25 | | The Outlook for Keeneland Sales | Mark Taylor, Dubner | 62:52 – 64:39 |

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Language and Tone

The episode carries Freakonomics’ signature blend of curiosity, data-driven inquiry, and personal storytelling. Dubner leads with approachable but probing questions, and the guests — ranging from statistical experts to lifelong horsemen to policy-minded regulators — answer with candor, wonder, and, at times, wry humor (e.g., horse “smoking a cigarette” after breeding, [47:54]).

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Conclusion

"Inside the Horse-Industrial Complex" spotlights thoroughbred racing’s multifaceted business: a blend of biology and tradition, elite wealth and immigrant labor, chance and calculated risk. Kentucky’s undimmed dominance hinges on a cocktail of geology, expertise, and regulatory quirks, all wrapped around the irreplaceable value of the horse itself. The episode sets the table for part three, promising a deeper look into the sport’s future, its challenges, and the “canary in the coal mine” role of the sales ring.

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For listeners curious about sports, economics, animal welfare, or hidden industries sustaining American traditions, this episode is a deep and illuminating ride.

Transcript

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[Stephen Dubner]

Freakonomics Radio is sponsored by Mint Mobile. At Mint Mobile, their favorite word is no. No contracts, no monthly bills, no overages, no hidden fees, no BS. Plans start at $15 a month at Mint Mobile. Ready to say yes to saying no? Make the [e-mail] freak that's mintmobile.com freak Upfront payment of $45 required, equivalent to $15 per month limited time. New customer offer for first three months only. Speeds above 35 gigabytes on unlimited plan taxes and fees extra. See Mint Mobile for details. Hey there, it's Stephen Dubner. Before today's episode, a quick announcement. On Thursday, November 13, I will be live on stage in New York City in conversation with the journalist bud Mishkin, celebrating 20 years of Freakonomics and and talking about what's next. We will be at the 92nd Street Y on the Upper east side. I hope you can make it. For tickets, go to Freakonomics.com liveshows and now, here is today's episode.

[Emily Plant]

May I give him a pat on the shoulder? Oh my gosh. I'm about to feed American Pharaoh a carrot, which is kind of highlight of.

[Stephen Dubner]

My life so far. That's Emily Plant. She is a lifelong horse lover who makes her living today as a thoroughbred researcher and statistician. And American Pharaoh, he is one of the most famous and most sought after horses in the world. His fame comes from winning the 2015 Triple Crown, that's the Kentucky Derby, the Preakness Stakes and the Belmont Stakes. He was the first horse to win the Triple Crown in nearly four decades.

[Emily Plant]

It was a huge deal for the industry because people said, oh, maybe it can't be done anymore. Maybe it's too hard. Maybe the modern Thoroughbred can't handle this. And then he won.

[Stephen Dubner]

And he is sought after because in horse racing, bloodline is extremely important. If you own a mare that is deemed worthy of American Pharaoh, he will be happy to mate with her for a stud fee of $45,000. Back when he first retired from racing at three years, his fee was $200,000. He is owned by a firm called Ashford Stud, which paid a reported $23 million for him in 2015 Ashford is a 2000 acre farm in Kentucky bluegrass country and that's where we are today. This is the American outpost of Coolmore Stud, the biggest Thoroughbred breeder in the world with headquarters in Ireland. This Kentucky location is sometimes called Coolmore America. Emily Plant calls it equine paradise.

[Emily Plant]

If you look at the barns, there's works of art in terms of the limestone craftsmanship, the roof, the cupola.

[Stephen Dubner]

There are 15 champion stallions in residence in these barns. Nearby there is a modern building with high ceilings, paned windows and big sliding doors. It looks like a really nice eight car garage.

[Emily Plant]

This is the breeding shed. The boys come in this way and they'll only bring the boys in when the mares are ready. The mares will come in from that side.

[Stephen Dubner]

Unfortunately, there's no actual mating happening during our visit. The stallions are back in their barns, relaxing, eating hay. Meanwhile, Emily Plant shows us around the breeding shed.

[Emily Plant]

You notice also the walls are padded. That's for a reason. The guys are going to be wearing helmets. They're probably going to be wearing safety vests.

[Stephen Dubner]

Typically, there will be four people in here to supervise the breeding. One person prepares the mare and holds her tail to keep it out of the way. Another person controls the stallion. There's also a veterinarian on hand in case there's a problem.

[Emily Plant]

You have two giant really charged up horses and we're basically trying to have them mate in a controlled environment. It's a very dangerous moment in time because thoroughbreds are bred with live cover. So it has to be the actual natural act. The guys that handle the stallions are the best in the world. The people that do this have done it their whole life and are very trusted because these are horses that are worth 50, $100 million.

[Stephen Dubner]

With all the risk and expense of what Emily Plant calls live cover. That's another way of saying old fashioned animal sex. You may wonder why thoroughbred breeders don't use artificial insemination. That is certainly common among cattle, pigs, poultry, also humans. But here it is forbidden. Why? That's what I got to wondering along with many other questions about the thoroughbred market. So today on Freakonomics Radio, we cover the economics of breeding and the economics of being a jockey.

[Richard Migliori]

Minimums $100 up to $500amount. The percentages where you make any real money.

[Stephen Dubner]

Also the feel of being a jockey.

[Richard Migliori]

There's probably a hundred different versions of my hands.

[Stephen Dubner]

We ask how Kentucky has maintained its dominance over the thoroughbred economy.

[Mark Taylor]

I've never really heard anybody else talk about that, but to me that's just a fact.

[Stephen Dubner]

And we look at some other parts of the horse world.

[Jill Stowe]

I couldn't believe that they would actually pay somebody to do that.

[Stephen Dubner]

Part two of our three part series, the Horse Is Us, starts now.

[Pacific Life Announcer]

This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.

[Stephen Dubner]

Imagine for a second that you are the racehorse. Feel free to imagine yourself as a great one American Pharaoh, or maybe his stablemate Justify, who also won the Triple Crown and now earns $250,000 per date. Or maybe you picture yourself as Secretariat, one of the greatest ever. Or Seabiscuit, the ugly duckling who became one of the most beloved horses in history. Okay, so pick the horse you want to be. You got it. Now I have to tell you something. No matter how great a horse you are, you will never win a single race officially, unless there is a person on your back when you cross the finish line. A jockey. I know, I'm sorry. Those are just the rules. And did you ever wonder what the jockey thinks about you?

[Richard Migliori]

Horses are very much like people. They have their own personalities. You know, if a horse is generous, he's generous. If he's kind, he's kind. If he's lazy, he's lazy. The difference between horses and people is a horse will never hide their true identity from you.

[Stephen Dubner]

That is Richard Migliori. These days he is head racing analyst for Fox Sports and for the New York Racing Association. Before that, he had a long and successful career, career as a jockey on the New York circuit. He was one of the best ever.

[Richard Migliori]

When you first start out as a young jockey, your biggest strength is your physicality, your lack of fear and your enthusiasm. Horses feed on energy. You're giving them this positive energy. And what you have going for you is that raw physicality and exuberance.

[Stephen Dubner]

So, Richard, if I sat next to you on a plane and I told you what I do, and I ask what you do and have done, give me your thumbnail biography.

[Richard Migliori]

I was a jockey for nearly 30 years. I started professionally when I was 16 years old, rode till I was just short of 45 years old and retired because of injuries, and then was offered the opportunity to start doing broadcasting. And now I've been doing that for nearly 15 years. And I'm very, very blessed to be able to do something within an industry that I love.

[Stephen Dubner]

How important is it to understand horses well, to be a good jockey?

[Richard Migliori]

For me, it was very important to understand a horse's personality, their psyche, their strengths, their weaknesses. Some riders maybe rely More on their physicality. Because being a jockey, even though it's hard for people to relate to a smaller than average person as a premier athlete, you are a premier athlete. Some guys can overcome their lack of understanding of a horse's personality with their physicality. But for me, it was a blend. And honestly, I always loved horses more than I loved racing. Racing became an extension of my love of the horses.

[Stephen Dubner]

How did you first spend time around horses?

[Richard Migliori]

Growing up in Brooklyn, New York, I didn't really have access to horses per se. My Little League coach actually had the pony ride concession at the Nellie Bly amusement park. I saw an entree into getting close to at least ponies at that time and started working for him at 9.

[Stephen Dubner]

How did you go from a 9 year old working in a pony concession to going pro as a jockey at 16?

[Richard Migliori]

When I was 12 years old, went out to live in my grandfather's house on Long island. And there were a lot of horse farms. It was much more rural at that time. I would tell my grandfather about a farm that I had found in Dix Hills, Long Island, Hunting Hollow Farm. He spoke with the guy there and he got me a job. I got $1 for every stall I mucked out. And at the end of the week, I could either take money or I could take riding lessons. I never took the money. I always took riding lessons. By the time I was 13, I had gotten involved with pony racing and people started to notice me that I looked like I belonged on the back of a horse. And then I wound up going to a farm and trainer at that farm saw me galloping racehorses. And by the time I was 14, I was at Belmont park working for a man named Steve Demoro. He had been the Eclipse Award winning trainer, meaning he was the champion trainer of his day. 15 years old, I signed a five year contract when I was 17 and a half. I actually bought my way out of the contract because it was starting to inhibit the progress of my career. But it gave me an incredible start. Steve Demoro, really, I have him to thank for everything that I was able to accomplish in this industry.

[Stephen Dubner]

What'd your parents think about your career choice?

[Richard Migliori]

I think there was some trepidation early on. I didn't grow up as conventionally as a lot of other kids. And me leaving home at such a young age was probably more of a savior than anything else. I found my place where I belonged, where I wanted to be. Growing up in the neighborhood I grew up in, it wasn't cool to be reading horse books or you know, I had other interests too. I always thought I was going to be an archaeologist. And I would read all these different things and I would dig up things. I found a bone once. My grandfather took me to the Museum of Natural History and we showed them the bone and they did like a test on it. And it was a deer bone that I found in the courtyard of an apartment building, the little dirt patch in Brooklyn. It was 400 years old.

[Stephen Dubner]

They told me, wow, wow.

[Richard Migliori]

And we were walking out of this office on one of the upper floors of the museum. And I was, you know, I'm a kid, a little embarrassed. And I said to my grandfather, do you think they need it? So I went back and I told him, man, if you need it. And he opened a drawer and there were like a hundred of the same bones in the drawer. But those were things that, like, as a kid, I had to hide that part of my personality because in my neighborhood, you got beat up if you were different.

[Stephen Dubner]

Let's go back to that first contract. A five year contract must have seemed in the beginning like a dream. But you said you bought your way out of it. Tell me about that contract. What were the terms of it? Why did you need to buy your way out, et cetera?

[Richard Migliori]

It was a dream. I was in a position that any other kid my age that aspired to be a jockey would be envied. And it was great. I made $100 a week the first year. Lived in a tack room at the end of the barn. It actually was $91 after taxes. As I became successful as a jockey, my first call was always for my contract holder. So if I had an opportunity to ride a big horse in a big race someplace and he had a horse someplace else, I had to ride for him.

[Stephen Dubner]

What about share of winnings or was that included? Were you like a contract player and you didn't get a share of winnings or you did get some?

[Richard Migliori]

Well, the first year I wasn't actually riding races. I was still training to ride races. The second year, I would get 10% of the winning shares of purses, except if my boss owned the horses and then I didn't get paid.

[Stephen Dubner]

It reminds me of the old Hollywood studio system. It's like we're gonna write you a check every month, but you kind of do everything we say.

[Richard Migliori]

Oh, absolutely. I was supposed to ride a horse getting ready for the Belmont Stakes. I was only 16 years old, and my boss said, no, no, no, you're going to New Jersey to ride that day. And the horse won The Belmont Stakes. I did win the race in New Jersey, but it wasn't the Belmont Stakes. So it was a blessing to be under contract. But it got to a point where it started to inhibit my career.

[Stephen Dubner]

Tell me what it takes physically and mentally to be a good jockey.

[Richard Migliori]

It's very difficult life. You're living life looking through a keyhole. You learn early on. You don't eat for enjoyment or for socializing. You eat for energy, for fuel. I was living on 7 to 800 calories a day. I struggled with it mightily. As a young rider, I would obsess about food. I might fight you for a Snickers bar if I could have one. And one day, a jockey who was a great role model for me, a great mentor, Eddie Maple, he's a Hall of Fame rider. He said to me, food's always going to be there. It sounds like a very simple idea. It just struck a chord in me, like, yeah, you know what? One day I'll be able to eat what I want. So I was able to kind of refocus how I looked at food and my career. And it gave me more longevity than I would have had because it was a struggle. I'm taller than the average jockey. I'm five seven. I make a joke. I was the center on the jockey basketball team.

[Stephen Dubner]

What was your racing weight?

[Richard Migliori]

I weighed 112 pounds. With my equipment, what they call tack, I could weigh out at 115.

[Stephen Dubner]

So I don't even understand then how you can have the physical energy to do that job. Weighing that much and eating only 7, 800 calories a day, how does that work?

[Richard Migliori]

A lot of it's willpower, just sheer determination, tenacity. Also, the calories you're putting in really mean something. I would eat raw beans, raw lentils, greens with just a little bit of olive oil and lemon, 4 or 5 ounces of grilled chicken or fish. That would be basically about what I would have a day besides, besides a vitamin drink in the morning and electrolytes through the day. My dessert would be 10m and Ms. In a Dixie cup and watch TV and make those 10m and Ms. Last for an hour.

[Stephen Dubner]

So let's talk about your career and your record. When I look at your performance over the years, I don't really know how to read these numbers very well. But if I compare it to baseball stats or football stats, it looks like you were crazy good to me.

[Richard Migliori]

Thank you for that.

[Stephen Dubner]

In your best years, you were winning between 17 and 19% of your mounts. Your win place show Percentage was in the mid to high 40s. And you did this for many years. Just describe what a career like that is like, because when you're that good in any competitive endeavor, whether it's sports or business or the arts, your life is very different from someone who's either not that good or just trying to break in.

[Richard Migliori]

In a way, it's a little bit difficult because I was very fortunate. I got amazing opportunities very young. I worked very hard for it. But not everybody gets the opportunities that I got. I think there are a lot of great riders that never realized their potential. Not because they did the wrong things. They just didn't get the right opportunities at the right time.

[Stephen Dubner]

They didn't get the horses that you got right.

[Richard Migliori]

As a jockey, you have a dance partner. You're only as good as your dance partner in a lot of respects. I've never seen a jockey get off and carry the horse.

[Stephen Dubner]

Talk about how you communicate with the horse. How much is verbal, non verbal. What are all the different things that you're doing to make that bond with the horse?

[Richard Migliori]

The majority of communication with horses is feel, touch. We talk about good hands with a rider. What is good hands? It's the extension from your hands through the reins to the bit to that horse's mouth so that I have this connection with the horse that's my brakes and my steering. And I know just how much hold I can take, how much I have to give back. How sensitive or light a horse's mouth is, it's much more an inherent feel than it is any kind of verbal communication.

[Stephen Dubner]

What about your legs? How do you use your legs?

[Richard Migliori]

Well, as a jockey, you ride different than an average equestrian, right? Somebody goes out and rides English or Western, their legs are around the horse's sides. A jockey, to be aerodynamic, has to ride with basically just their calves on the horse's sides, not their thighs. A horse carries weight more efficiently when that weight is centered on their withers. So if you're kind of crunched up in a ball, up on your knees, you can put the majority of weight right on their withers.

[Stephen Dubner]

Talk a little bit more just about having good hands. I mean, every sport, you need to have good hands, but it's different in every sport. If I'm thinking baseball or golf or tennis, you have a style that you've practiced for years and it works for you. But with you as a jockey, every horse is going to be a little bit different. So describe like your repertoire of your hands, because I assume that you have to be really different from Horse to.

[Richard Migliori]

Horse, there's probably a hundred different versions of my hands. You get horses that are very tough mouthed, we call them heavy heads where you could basically pull as hard as you want and you're never going to reach that break point where they're going to throw their head in your face. They're just hard to handle. And you've got to be physically very, very strong. So you lose a lot of the nuance the next race. After riding a big heavy headed horse like that, I might ride a little tiny filly that's very sensitive and I've got a rider on a very light, loose line. I've got to be very aware of where that break point is. I can't get too far into this horse's mouth because I'm going to throw off their stride, their rhythm, even their breathing.

[Stephen Dubner]

Tell me about the relationship between jockey, owner and trainer. That triangle there.

[Richard Migliori]

The owner's the boss, he owns the horses, he pays the bills. At the end of the day, what he says is gonna go. Now, if it's a good owner, they hire a trainer they believe in and they allow them to do their job. Now, the jockey is usually hired by the trainer and hopefully the trainer allows the jockey to do their job and not micromanage and have the trust. You hired me to do something, allow me to do it. I don't think Tom Brady would walk up to the line of scrimmage and read the defense blitz and not feel like he could call an audible. Right.

[Stephen Dubner]

How much money did you make during your career? I'm looking at the career earnings on Equibase, but those are what the horses made. It's $160 million in earnings.

[Richard Migliori]

Right. That's what the horses earned. The way it works with riders is you get 10% of the winner's share of a purse, 5% of seconds and thirds. A fair assessment is you make about 8 1/2% of what your total purse earnings were. And then there's a flat rate just.

[Stephen Dubner]

To ride, which is like a hundred couple hundred dollars.

[Richard Migliori]

Right now in New York, it's an escalating scale depending on the purse minimums, $100 up to $500amount. The percentage is where you make any real money.

[Stephen Dubner]

How many mounts would you typically have in a racing day?

[Richard Migliori]

Early in my career, eight or nine at Aqueduct, nine or 10 at Meadowlands. Every day.

[Stephen Dubner]

We just did a series on air traffic controllers and they have a mandatory retirement at 56. And I asked this guy, recently retired, you know, like, why is that? What do you Lose as you get a little bit older. And he talked about how his sweet spot was in his mid-30s, maybe to early 40s, where he was just in the flow. And then you start to notice that you don't have the picture in your head as well. You don't respond quite the same way. So when you were in your flow, can you just talk about what it's like to be showing up to work when you are that good?

[Richard Migliori]

When you first start out as a young jockey, you are so thrilled to be out there that you'll win on horses that other jockeys might not win on, because you give that horse every opportunity to be his best. I walked into a jockey's room with Angel Cordero, George Velasquez, Eddie Maple, and I was young enough and dumb enough to believe I belonged there, Right? And then as you go on, you gain this experience, and there's a window where you're at your perfect blend of physicality and mentality. As you go on a little further, your physicality starts to ebb a little bit. You rely more and more on the mental aspect of it, your experience, to smooth out what you're not doing as well physically. I never got to a point where my mental reaction or the way I saw a race started to ebb. I'm sure it would have. You know, I was at an age where it was probably getting to that point where I was struggling more was with my body, and I wouldn't have retired at that point. But I got injured very badly, and I could never get medical clearance again. Although I did exhaust a lot of leads to different doctors that I thought I could get medical clearance. You know, father times undefeated.

[Stephen Dubner]

That last injury was in 2010 at Aqueduct Racetrack in New York when Migliori broke his neck. When he and his horse both fell. That wasn't even Migliori's first broken neck. That One was in 1988.

[Richard Migliori]

They actually did a Rescue 911 episode about it, which is on YouTube. If you put iron jockey in the search engine.

[Stephen Dubner]

By his own count, Migliori had six or seven concussions, along with a broken ankle, a broken fibula, a partially ruptured Achilles tendon, and quite a bit more. Riding a horse, especially at 40 miles an hour, comes with significant risk for jockeys and horses. Jockey deaths are rare, but not unheard of. Horse deaths occur at a rate of around 1 per 1000 starts. That is a historic low, less than half of what it was in 2009. Still, some critics have been arguing for a long time that Horse racing should be banned on the grounds that it is exploitive or cruel. I asked Richard Migliori what he thinks of that argument.

[Richard Migliori]

I do think that people have the wrong idea about racing and about how the horses are cared for. These horses really do actually love to run and listen. Horses get injured and they injure themselves. If a horse injures themselves in the wild, they're going to have an agonizing slow death. A horse injures himself in a controlled environment, we're going to do our level best to save that horse, to make that horse comfortable. And the advancements in veterinarian medicine have really up the odds for a horse with a fracture to survive. But I do think we have to be more proactive to show people just how well the horses are taken care of. The majority of them love their job, and the ones that don't, they don't stay racehorses long because they're not going to be successful at it. They'll go transition to a second career as a riding horse, a horse for therapy, a show horse, a hunter jumper. There's so many other outlets for these athletes.

[Stephen Dubner]

When you look back at your career and then you look at racing today from the jockey side, what are the primary differences?

[Richard Migliori]

The size of the purses. The purses are so much bigger now. Another major change is most riders don't come up under contracts anymore. I was probably the last high profile rider to come up under a contract. Now riders get prepared on farms or jockey schools. The most famous one is probably the jockey school in Puerto Rico and the one in Panama. They turn out incredible talent.

[Stephen Dubner]

Name a very favorite horse of yours, or maybe a few and say why.

[Richard Migliori]

The first horse that comes to mind was not a famous horse. He was a lower level claiming type horse named Creme de Lafitte. Started riding him as a seven pound apprentice, which means you haven't even ridden 35 winners yet in your career. And rode him for, you know, on and off over the next four years, won 15 races on him. He was so honest. I like my horses the way I like my people. Honest and hardworking. He just always gave you an effort. If he wasn't good enough, he wasn't good enough. But he always tried. Hidden Lake was a champion mare. She was the easiest horse to ride. A lot of good horses have a particular style. They're a closer, they're a speed horse. They don't like it inside, they don't like it outside. Anything you wanted to do, she would do it. If there was no speed in the race. She could make the running if there was a lot of speed. She can come from last. If there was a tiny spot on the inside, she was brave. She'd bully her way through. If she got floated wide, she wouldn't lose interest or hang on the outside. You could go to the gate with such a clear mind with her. She was a jockey's dream.

[Stephen Dubner]

And where does a jockey's dream come from? That question brings us back to breeding and back to Kentucky.

[Mark Taylor]

We know that less than 1% become grade one winners.

[Stephen Dubner]

That's coming up after the break. I'm Stephen Dubner and this is Freakonomics Radio. Freakonomics Radio is sponsored by the new all electric Toyota BZ. With up to an EPA estimated 314 mile range rating for front wheel drive drive models and available all wheel drive models with 338 horsepower, the Toyota BZ is built for confidence. Conveniently charge at home or on the go with access to a wide range of compatible public charging networks including Tesla superchargers. Inside, enjoy a 14 inch touchscreen and an available panoramic view moonroof. Learn [e-mail] BZ the new all electric BZ Toyota lets go places Freakonomics Radio is sponsored by Dell Introducing your new Dell PC. Powered by the Intel Core Ultra processor, it helps you handle a lot even when your holiday to do list gets to be a lot because it's built with all day battery plus powerful AI features that help you do it all with ease. From editing images to drafting emails to summarizing large documents to multitasking so you can organize your holiday shopping and make custom holiday decor and search for great holiday deals and respond to holiday requests and customer questions and customers requesting custom things and plan the perfect holiday dinner for vegans, vegetarians, pescatarians and Uncle Mike's carnivore diet. Luckily you can get a PC that helps you do it all faster so you can get it all done. That's the power of a Dell PC with Intel inside backed by Dell's price match guaranteed. Get yours [e-mail] holiday terms and conditions apply. See Dell.com for details. Freakonomics Radio is sponsored by Claude the most interesting questions don't always have the most obvious answers. Why do people behave in seemingly irrational ways? What hidden forces shape our decisions? Claude is built for minds that ask these deeper questions. When you're exploring patterns or connecting dots across disciplines, Claude goes beyond easy answers and matches your curiosity about the world's unexpected connections. Try Claude for free at Claude AI Freakonomics and see why the world's best problem solvers choose Claude as their thinking partner. The most famous horse of the past 50 years, the horse that a lot of people have heard of, even if they know nothing of about horse racing, is Secretariat, or Big Red, as he was known to friends, fans and admirers. He won the triple crown in 1973, and he seemed to run at a pace that was all his own.

[Richard Migliori]

They're on the turn. Its Secretariat is blazing along the first.

[Mark Taylor]

Three quarters of a mile and 109 and 4/5.

[Richard Migliori]

Secretariat is widening now.

[Mark Taylor]

He is moving like a tremendous machine.

[Stephen Dubner]

Secretariat is considered one of the best athletes of the 20th century, including humans. There have been books, films, There are still fan clubs and a strong market for Secretariat collectibles. But the best evidence of Secretariat's legacy is his bloodline. He retired after that Triple Crown season and went straight to stud. And he was kept busy for the next 15 years. American Pharaoh, the Triple Crown winner we met earlier, is a Descendant of Secretariat. Nineteen horses ran in this year's Kentucky Derby. All 19 of them could claim Secretariat as an ancestor. He spent his stud years at Claiborne Farm in Central Kentucky. That area was the epicenter of Thoroughbred breeding back then and still is today.

[Jill Stowe]

About 60% of all thoroughbred foals born in North America are born here in Central Kentucky.

[Stephen Dubner]

That's Jill Stowe. She is an economics professor at the University of Kentucky and she's been a horse person for a long time.

[Jill Stowe]

I started riding when I was four years old. When we moved to New Mexico, I was very fortunate to be able to ride horses across the desert. We showed quarter horses, Hunter jumper and 4H eventing, and ultimately I settled on dressage. I have competed some, a little bit at the regional level, mostly locally. I still do. Today I've got two horses. One is a retired racehorse. These thoroughbreds are such athletic animals, when they are done with their racing career, they could be three, four, five or six years old. They have a lot of life left and they love to have a job.

[Stephen Dubner]

After getting her PhD, Stowe taught for six years at Duke. And then she saw that the University of Kentucky wanted to bring on an economist to study the equine markets.

[Jill Stowe]

I couldn't believe that they would actually pay somebody to do that. It marries a passion that I've had since I was a very little kid, with tools I was trained with in grad school.

[Stephen Dubner]

I see your school has an interdisciplinary equine program for undergrads, one of the biggest in the country. Can you describe that for Me.

[Jill Stowe]

It's a rigorous scientific based degree program. There's no riding, there's some horse handling. But we really want students to learn both the bench science and the social science behind horses and the equine industry.

[Stephen Dubner]

Your students describe what kind of occupations they may be headed for.

[Jill Stowe]

You might be surprised at the breadth of careers in the equine industry. One of my colleagues, Dr. Laurie Garcovich, characterized Kentucky's equine industry as an economic cluster. So if you think of the horse farms and the racetracks as the nucleus of that cluster, you think about all the different types of professions that support the horses. You have professional services like accounting and marketing and insurance. You have veterinarians, farriers, equine dentists, rehab facilities, transportation companies that specialize year round in transporting horses across the United States. I don't know how many miles of fencing there are out here, but there's a lot of landscaping involved, muck removal. There are professional organizations that help manage the different breed and discipline organizations. We have laundromats that have special washing machines for horse blankets.

[Stephen Dubner]

Jill Stowe and her colleagues recently conducted a study which found that Kentucky has 31,000 equine operations on 3 1/2 million acres. An earlier study by the American Horse Council foundation found that the industry supports 60,000 jobs in Kentucky and generates six and a half billion. So, yes, that's a lot of jobs and a lot of money for one industry in one state. And there is one star of this industry, one star that shines way brighter than everything else. I am, of course, referring to the horse.

[Jill Stowe]

Yeah. You need to come out here sometime for one of the September yearling sales. They've got 4,000 yearlings over the course of two weeks. They bring the horses out one by one. They look at their confirmation and they watch them walk, and they look at their demeanor. And they can also go to the veterinary repository and look at radiographs.

[Stephen Dubner]

So even with all that information, I'm guessing it's still really hard to predict the value of a thoroughbred at one year old.

[Jill Stowe]

It's a big gamble.

[Stephen Dubner]

It's a little bit like buying a house, except you can't go inside.

[Jill Stowe]

Yeah, but you want this house to run around the block really fast.

[Stephen Dubner]

Okay, so let's go to someone now who doesn't just study the thoroughbred business, but is a high level practitioner.

[Mark Taylor]

My name is Mark Taylor, and I'm the president of TaylorMade Farm in Nicholasville, Kentucky. I'm glad to be here because the thoroughbred horse world is freakonomics. What makes you say that, well, it's very volatile. There's not many industries or economies that it's a living, breathing creature.

[Stephen Dubner]

So your firm, TaylorMade, just give me a sense of what it is.

[Mark Taylor]

We have approximately 125 employees full time, and we cover almost all aspects of the thoroughbred industry. The backbone of our operation is we're a service company. We manage other people's horses. We board them on our farm, we care for them. We also are focused on marketing and promotion for horses that do not live on our farm. We still provide services to help bring them to market, either privately or publicly, and help them maximize their return. We do racing partnerships, which is our outreach to bring new people into the racing and breeding game. And then we have a stallion operation. We're the largest farm and marketer of horses in North America. On the stallion side, we're more of a boutique operation.

[Stephen Dubner]

As you speak, my mind is starting to understand just how many facets there are to this industry, how many different players, how much nuance there is. I'm also starting to understand, Mark, how it is that the horse industry, which is not super visible to many people who don't care about racing or equestrian events, why it's still a pretty big industry. How would you describe the size and scope of the thoroughbred industry?

[Mark Taylor]

So at TaylorMade, we roughly sell, on average, $150 million worth of bloodstock a year. I would say 120 million is going to be public auction transactions. 30 million is going to be private. Now, this has nothing to do with stallion breeding sales. That's just a different category. This is physically selling a horse.

[Stephen Dubner]

And I understand that a lot of that physical selling for you and for many others happens at the famous Keeneland auction house in Lexington. What does Keeneland represent for a company like yours?

[Mark Taylor]

So Keeneland is, I would say, the heartbeat of the whole horse industry in North America. They have two primary sales, their September sale and their November sale. September is focused on yearling horses who have never been to the racetrack, never raced, totally unproven. As athletes, they accumulate the best of the best. There at Keeneland, I think their gross in that sale was over 400 million last year. So, I mean, if the market's good, Keeneland September's gotta be good. If it's down, it hurts everybody.

[Stephen Dubner]

You don't sound like a person who likes to brag, but I know that TaylorMade is a major player in the Keeneland sales.

[Mark Taylor]

Yes, we like to consider ourselves a microcosm of Keeneland. We range between 10 and 12% of their market. Share. It's basically quality in quantity is what we aim for.

[Stephen Dubner]

Let's say you have a new client or just a friend that you're advising or whatnot, how do you advise them to think about the roi, the return on investment of a horse? It strikes me as though every horse is a long shot when you haven't seen them run yet. But I don't know, maybe you'll tell me that there's more predictability than we think.

[Mark Taylor]

So if I can just to differentiate the breeding side to the racing side, the breeding side has more of a component of predictability to it. It's still unpredictable, but we've got a lot of experience in saying, hey, if we go buy this broodmare and she's carrying a foal, she's pregnant when we buy her and we look at her pedigree, we look at her confirmation, we look at the stallion who her foal she's carrying is by. We can create a pro forma that says we want to try to get this mare paid off, threw breeding foals out of her in, let's say, three years. So three babies. It doesn't always work out. Sometimes that first baby might pay for the mare. Sometimes the first baby is small and it doesn't bring a lot. And so you're kind of behind on your projections, but you catch up on the second one. It's definitely not 100% predictable, but it is more so when you're buying a potential racehorse that's completely unproven. We know that less than 1% become grade one winners, so your chances of that happening are slim. But you can still put yourself in a position to get lucky. Purses in Kentucky are so healthy right now that you don't have to get a superstar. You don't have to be sovereignty, who is the best 3 year old colt in the country right now to have success.

[Stephen Dubner]

When you look around the world at all the different markets, like real estate is one that almost everybody has interacted with at least a little bit, you recognize that the incentives between the different players can be at cross purposes sometimes, right? A broker who's representing a seller may have an incentive to encourage the seller to take the first decent offer rather than hold out for a higher one because the broker's share of that sale is relatively small. What about in your business? What are some incentives that may be at cross purposes or things that you have to look out for?

[Mark Taylor]

Your analogy about the real estate market is the exact same one that exists in what we do. We're Incented to get horses sold for our customers. Now sometimes when you're trying to determine your reserve price, the minimum you will take when you put the horse through the auction, you turn that number in with the auctioneer. It would be easy sometimes for us to always recommend a very conservative reserve number and to push for that because it does us more good if we just get the horse sold, right? But we give our customers three numbers. We give them a green light number. If you want to be conservative, you're going to get your horse sold. If you put it in at this, we give you a yellow light number. We can't guarantee it, but it's above 50, 50. And then we have a red zone that we're like, hey, you might get this, chances are that you won't. But you could get it. If you don't mind retaining that horse and you want to push for maximum return, you could set it here. There's a lot of other things in the business, honestly that are, there's room for people to be self serving. One of our mottos at TaylorMade is to always be more interested in the relationship than the transaction. Walk away from the short term profit. If you can help this customer have long term success because new customers are very hard to find. If you can keep the one you have, you're much better off.

[Stephen Dubner]

Mark, I'm just wondering, are you a big sports fan outside of horses?

[Mark Taylor]

Yeah. College football and college basketball, I would say mainly.

[Stephen Dubner]

So especially if you follow college sports, you're well aware of second generation, even third generation athletes coming along. Right. Their dads or moms were players. If you look at the NFL and the NBA, of course you see that there as well. Where do you think genes matter more, human athletes or horses?

[Mark Taylor]

That's a very interesting question. I think that they probably matter more in humans because all these horses are bred to run, right? Not all humans are bred to be athletes at all. People don't get together and say, hey, how fast was your 40 time before they start dating. So I think that if you get a really prolific athlete, they've probably got a bigger edge over the general population. If you take the thoroughbred industry, every single stallion was a very good racehorse. Now, some were better than others and every mare was bred to run. What's fascinating is on the stallion side, all these stallions were good racehorses, but some of them were great racehorses and they command the best mares when they go to stud. If you take a horse like Curlin, Curlin was horse of the Year. He was a champion he was just amazing. He was well bred. The population of mares that were bred to him, they weren't going to accept anything but really, really quality, Right? So he's done great. He has turned into one of the best stallions we've seen in the last 30, 40 years in America. He. But then you look at other stallions. We have a horse at our farm named not this time. He's 11. He started off with a modest stud fee. It was only 15,000. We couldn't be picky. He got bred to just whatever mares people would send in. I mean, we had some preferences on what they looked like and bloodlines and stuff. But he's risen from 15,000 to 175,000 in stud fee. His genetic switch is flipped on. I'm not a geneticist, but some of these horses, they have the ability to pass on their talent and other horses don't. For whatever reason. It's a great mystery what is the.

[Stephen Dubner]

Lifespan of a stud then?

[Mark Taylor]

Most of the time they get over 20, their fertility starts to wane, and usually their popularity is going down by that time as well. The prime for a horse is in that 10 to 17 range.

[Stephen Dubner]

And for a horse like not this time or the others that you've had that were successful, how many dates can they have in a year? Year, let's say.

[Mark Taylor]

I'll give you a little bit of history. Back when my dad was working at Gainesway Farm, they were really pioneers in breeding mares. They were the first breeding shed to actually breed mares on Sunday. Everybody else used to take a day off and they were like, hey, if you're putting up your money and your mare needs to be bred, we're going to breed them on Sunday. I remember my dad would drag us to 6am Mass before he headed to the breeding shed. Their heyday was the 70s and the 80s. Back then, horses could breed a max of maybe 60 mares. They did not have the tools, ultrasound, to predict exactly when the mare was going to ovulate. Now they've come up with hormone therapies that can trigger ovulation if the mare is close in her cycle, maybe she wasn't going to ovulate for three more days. But her window of availability for the stallion, she needs to be bred today. They can give her this shot and it will trigger ovulation. The number of breedings per conception has really gone down. It used to be maybe three and a half or four, and now it's like 1.2. One stallion can breed a lot more mares with the same amount of physical breeding. It's really staggering. Some of these stallions can breed over 200 mares.

[Stephen Dubner]

Lifetime or year?

[Mark Taylor]

No, per year.

[Stephen Dubner]

Wow. That's a busy social calendar.

[Mark Taylor]

Yeah, they've gone from 60 to 200 plus. So if each of the popular stallions can breed three and a half times what they used to breed, it's pushing out some of the next tier down prospects. So fewer stallions breeding more mares, each is what we're dealing with, which then puts pressure. When you take those babies to market, you've got maybe 120 or 140 in the September sale, all by the same stallion. You better hope that you're one of the best ones or you're going to get picked over.

[Stephen Dubner]

When you've got a stud who's working with 200 mares a year, what does that horse's state of mind? Is it enjoyable? Is it exhausting? What do they do to relax afterwards?

[Mark Taylor]

Okay, so my dad had no formal education, but he was this constant learner. The intellectual curiosity, I mean, beyond belief. So he put a lot of thought at this. How do you keep a stallion's psychological state where you want it to be? If you go back to when these horses were wild, stallions are violent with one another in the wild. They're protecting their herd of mares. So this is hardwired into their DNA that I don't want any other males around my mares and I'm going to be very aggressive and drive them away. So at Gainesway, one of the flaws when they first started was they had one big barn that would house like 30 stallions. And these horses get smart, right? Okay. I just heard a trailer pull in. I heard a mare knicker, and there's my buddy across the hallway and he's heading out. The other 29 are thinking, that's supposed to be my mare. And they're showing their teeth and pinning their ears and they're getting all worked up. So that was not good for the psychology. These horses would become more aggressive towards humans, aggressive towards other horses. They were unhappy. So my dad redesigned that stallion complex. He made the barn smaller and more accessible to turnout. My dad's thing was horses are meant to be outside unless they absolutely have to be in because of their breeding schedule or because the weather is so bad that we just need to give them some shelter. So we put a lot of thought to that. In Taylormade, each stallion just has one roommate and each horse has a small little holding pin. You don't Even have to hook a lead shank onto them. You can just open their back door and they walk outside. They can eat grass, get sunshine, roll around. So that's what they do between breedings. You know, it's their version of smoking a cigarette. They go out there, they roll around, eat grass, sunbathe.

[Stephen Dubner]

And where does the breeding happen?

[Mark Taylor]

We have one breeding shed that's designed for safety. We've got cameras in there. We've got a lab that has a microscope for checking semen count and all those kind of things. It's about a 50 yard walk from each of the barns. Now, each horse is different. Our horse, not this time. He's got a great libido, he likes his job, and he's very fertile. The joke is, all he has to do is look in a mirror and she gets pregnant. I mean, it's just amazing how fertile he is. So it's not as burdensome for him. When horses get older and their fertility goes down, they just get tired of it and they don't want to do it. Not this time. Can breed three, possibly even four mares in a day if he absolutely has to. Whereas some horses, it's one a day at max, and a lot of times they need a day off.

[Stephen Dubner]

So we spent some time with an economist who imports and sells dressage horses, not racehorses. And in that realm, most of the transactions are private, whereas in your business, there are these big public auctions and there's much more information available. Why do you think there's so much transparency in your market and so little in his?

[Mark Taylor]

I can't speak for why there's not in their realm. In our world, it's about efficiency of the marketplace. Keeneland will sell 4,000 yearlings. It's kind of like the NFL draft. And the show days leading up to the auction is kind of like the combine. Everybody's looking at it. They're studying the metrics, they're watching videos, they're doing DNA testing, heart scans, veterinary checks. It's very efficient on the thoroughbred side, and maybe it's our volume that requires that. But, you know, if we were charged with going out and selling these horses ourselves and we didn't have that marketplace to take them to, it would be impossible. There's just no way. The beautiful thing, from my perspective about the thoroughbred industry, it's a big tent. There's room for all demographics and socioeconomic levels. There's people who are working for TaylorMade as Grooms. For the first 75% of the Keeneland September sale, they Tell us, hey, my last day is on this day and I'm going to be gone. And then the next day after they leave, you go up to the ring and they're back there using the money that they just earned to try to buy a horse that they're going to resell the next spring. So what I love about our industry is everybody rubs shoulders, from the grooms to the billionaires. The starting gate is the great equalizer. It doesn't care if you spent 5 million on the horse or 5,000 on the horse. A lot of times the little guy can upset the apple cart. I don't think that happens in the show jumping world. I don't think some guy comes in with a $2,000 show jumper and wins one of these things.

[Stephen Dubner]

It is a nice romantic notion to think of grooms and billionaires united by their love of fast horses. But grooms usually make minimum wage and a lot of them are immigrants. Ice, the US Immigration and Customs Enforce Agency, recently raided a Louisiana racetrack, arresting 80 people who were said to be in the country illegally and four more on additional charges. Coming up after the break. What's it like to be a backstretch worker today? And how does one old breeding rule keep Kentucky on top of the thoroughbred industry?

[Mark Taylor]

I'm sure there's other states that would love to have these stallions.

[Stephen Dubner]

I'm Stephen Dubner. This is Freakonomics Radio. We'll be right back. Freakonomics Radio is sponsored by NetSuite. Every business is asking the same question. How do we make AI work? For us, the possibilities are endless and guessing is too risky. But sitting on the sidelines is not an option because one thing is almost certain. Your competitors are already making their move. No more waiting with NetSuite. By Oracle. You can put AI to work. Today with NetSuite, you get a unified suite that brings your financials, inventory, commerce, HR and CRM into a single source of truth. That connected data is what makes your AI smarter. So it doesn't just guess. It knows intelligently automate routine tasks, deliver actionable insights and make fast AI powered decisions with confidence. NetSuite isn't another bolted on tool. It's AI built into the system that runs your business right now. Get the business guide demystifying AI free at netsuite.com freak the guide is free to you at netsuite.com freak that's netsuite.com freak Freakonomics radio is sponsored by Schwab. Trading at Schwab is powered by Ameritrade. Unlocking the power of thinkorswim, the award winning trading platforms loaded with features that let you dive deeper into the market. You can visualize your trades in a new light on thinkorswim Deck desktop with robust charting and analysis tools all while you uncover new opportunities with up to the minute market news and insights. Think or Swim is available on desktop, web and mobile to meet you where you are so you never miss a thing. It's built by the trading obsessed to help you trade brilliantly. Learn [e-mail] trading freakonomics radio is sponsored by Claude the most interesting questions don't always have the most obvious answers. Why do people behave in seemingly irrational ways? What hidden forces shape our decisions? Claude is built for minds that ask these deeper questions. When you're exploring patterns or connecting dots across disciplines, Claude goes beyond easy answers and matches your curiosity about the world's unexpected connections. Try Claude for free at Claude AI Freakonomics and see why the world's best problem problem solvers choose Claude as their thinking partner. Oscar Gonzalez is Vice Chair of the California Horse Racing Board.

[Oscar Gonzalez]

The California Horse Racing Board is a regulatory agency charged with ensuring that our equine athletes and jockeys and other personnel are safe.

[Stephen Dubner]

Before that he held senior positions in the U.S. department of Agriculture, and before that Gonzalez worked at Del Mar Racetrack in California alongside his grandfather, an immigrant from Mexico.

[Oscar Gonzalez]

A hard working individual who really loved horses.

[Stephen Dubner]

Oscar started young at Del Mar before he was even a teenager.

[Oscar Gonzalez]

I distinguished myself as a really good groom, taking care of four or five horses and then from there you really learn about other ways to fill other roles, whether it's night watchmen or holding horses for the shoe or the farrier or the veterinarians. So there's always a way to make an honest dollar around the racetrack.

[Stephen Dubner]

A lot of track workers today are immigrants, most of them from Central America. The trainers who employ them have to apply for visas.

[Oscar Gonzalez]

The primary type of visa that is being used on the back stretch are H2B visas. H2B visas are subject to a cap and there is a definite need for an expansion of that cap or a certain allocation. For industries like horse racing, a trainer can sometimes have different parts of their operation in multiple states, each state requiring different things from pay to housing to transportation. The standard visa program, unfortunately almost is like a one size fits all.

[Stephen Dubner]

To get an H2B visa, an employer has to show that no American workers want the jobs they're hiring for, and an H2B is only good for a maximum of three years, at which time a worker has to leave the US For a few months before they can be readmitted. Oscar Gonzalez, like many people in the racing industry, is eager for immigration reform. In fact, he sees the racing industry as a potential model for reform.

[Oscar Gonzalez]

I really believe that if we were to tackle the immigration challenge for horse racing today, that within five years, measures of success would be a well trained workforce that allows his or her employer to expand. It would also provide workers the opportunity to engage in their community, to start businesses, to go back to their home country when an emergency happened. But it would also allow for these workers to be able to train the next generation of racetrack workers coming from places like East Los Angeles, where I grew up, or Baltimore or Brooklyn or Queens, because we have seen moments in horse racing where Americans do not want to do these jobs. But it is also going to require the industry to step up its game in how much we pay workers. I believe we could very well come up with a model program to show other industries how it can be done.

[Stephen Dubner]

I went back to Mark Taylor of taylormade Farm in Kentucky to ask him about the horse industry workforce and about President Trump's immigration policy.

[Mark Taylor]

It's definitely put a lot of fear out there for people that are undocumented. Those people are a big part of our industry, and they're vital to our ability to function. During Trump's first administration, we actually started participating in the H2A visa. These individuals are screened in advance. Most of the people that we bring into the program have a referral from somebody who has worked for TaylorMade in the past. And so they're from usually Guatemala or Mexico. And we bring up a huge portion of our labor force, and they stay for 10 months and they go home for two months. Now the government sets their hourly rate, and they've been bumping it up every year, I think, as a disincentive to hire foreign workers. But in our case, we can't find enough domestic workers to fill these spots. So it's costing us more. But we're getting a better job done because we have very reliable workers who are happy to be here and they have legal status while they're here. So it's been a big win for us.

[Stephen Dubner]

And there's no annual cap on H2A visas, I believe. Is that right?

[Mark Taylor]

Not that we've ever encountered. We've increased our amount annually.

[Stephen Dubner]

Let's pull back for a second. Can you explain how Kentucky has been able to retain its hold as the epicenter of thoroughbred breeding? I know there are other places around the country and around the world that do it. But Kentucky, especially the Lexington area, seems to still be the place that either sets a standard or maintains a great deal of momentum. And it's a market that people can trust, even new entrants to the market can trust. But beyond that, can you talk about why Kentucky remains the epicenter?

[Mark Taylor]

There's a lot of people who will say it's the land, right? We've got this limestone soil and it is a lot easier to raise a good horse in central Kentucky than it is most other places. Now, modern nutrition that you can get out of a feed bag has helped, but there is just something about it. The bone is better, the horses are stronger. Other states, you know, Florida, I have a lot of respect for Florida horsemen, a lot of good horsemen down in Ocala. And that's the epicenter for the two year old sales, the people that buy our yearlings and go down there and resell them in sales where the horse has to do a workout. I think it's a more difficult place to raise a good horse. So you have to be a better horseman down there.

[Stephen Dubner]

Difficult, why?

[Mark Taylor]

Heat? Yeah, the heat. I just don't think the soil is as good. The other thing that springs up in central Kentucky, we've got the best vet clinics, we've got the best blacksmiths, we've got every modality of horse care you could imagine. We've got acupuncturists and masseuses and chiropractors. If your horse has any problem, you're just a phone call away. And services can be provided that day. The number one reason is location of the stallions. My dad worked for John Gaines out at Gainesway. And Mr. Gaines, for anybody who wants to Google him, he invented the Breeders cup, he started the Kentucky Horse park, he started an organization that's now a lobbying group called the ntra, National Thoroughbred Racing Association. My dad was the horseman, he was the business guy. They made a good team. But he was a visionary, just brilliant, brilliant guy. And he said stallions are the reason Kentucky is the epicenter of the business. If all the stallions moved to Nome, Alaska tomorrow, the new epicenter would be Nome, Alaska. The mayors would have to follow.

[Stephen Dubner]

So, Mark, I understand that artificial insemination is forbidden in thoroughbred breeding, even though it's common in many forms of animal husbandry, including most forms of horse breeding. So. So why is it forbidden in thoroughbreds?

[Mark Taylor]

I don't know exactly why it is, but my father, he was in the standard bred business as a young man before he converted over to Thoroughbreds and they have artificial insemination. When I was a kid, I can remember my dad saying, after I'm gone, never let them do artificial insemination and thoroughbreds. It'll ruin the breed. And I was like, why? And he said, well, they'll be able to overbreed these stallions. And it shoves out all the little stallions. You know, one horse can breed an infinite number, basically. Ironically, even though we don't have artificial insemination, technology has allowed us to breed 200. He couldn't even imagine that at that point. So we've gotten there naturally.

[Stephen Dubner]

It sounds as though Kentucky breeders have had a big incentive to forbid artificial insemination because that could destroy the concentration of stallions in Kentucky. Is that the case?

[Mark Taylor]

Yes, I would say. I've never really heard anybody else talk about that, but to me, that's just a fact. And the tax revenue that comes from that. I'm sure there's other states that would love to have these stallions and they might cut favorable tax deals if they could relocate these things and bring the business to another state. So, yeah, I think that that's a big part of why it's here is because the mayor's got to stay with the stallions.

[Stephen Dubner]

Can you give me a preview of this year's Keeneland sales from your perspective? What are you anticipating? What are some things you know and some things you don't know? What's a total dollar amount you're hoping.

[Mark Taylor]

To come away with this time? Last year there was tons of uncertainty because we're in a presidential election year and we also had the depreciation laws at this point. Last year was you could write off 60% of a yearling purchase in the year you bought the horse, and it was on a 20% annual decline. That's the way the schedule was going to go. So in 2025, it went down to 40%. Now, the so called big beautiful bill actually had language in there that boosted the bonus depreciation on equine purchases and equine assets investment. So I think that's a really good just driver of more investment. And there just seems to be a lot of energy in the business right now. I have a really good feel about the September sale. I think last year they set a record 400 million and change. I'm hopeful that they can get there again. Here's an interesting statistic. There's 1,400 yearlings by sires who this is their first crop of babies. Last year, there was only 800 so in that crop, you've got Flight Line, you've got Life Is Good, which are the two highest priced superstars. But you've got a lot of other good horses. Cyberknife, Jack Christopher, and then a horse like not this Time, who's coming up through the ranks. So I feel good. I'm always nervous, but I'm pretty optimistic going into this year's edition of the Keelan September. September sale.

[Stephen Dubner]

Coming up next time, in the third and final part of our horse series.

[Mark Taylor]

Signed by a TaylorMade sales agency by.

[Richard Migliori]

Not this Dime, whose sire resume we.

[Stephen Dubner]

Go to the Keeneland September sale.

[Emily Plant]

If you make the right decision, you can end up with essentially a living unlimited ATM machine.

[Oscar Gonzalez]

Cheers.

[Mark Taylor]

Cheers. Cheers.

[Richard Migliori]

Yeah.

[Mark Taylor]

Cheers. And to Keen.

[Jill Stowe]

Cheers, guys.

[Stephen Dubner]

But does a strong sales market mean that the sport is strong?

[Richard Migliori]

The racetracks in the industry themselves spend as much time lobbying politicians as they do worrying about their fan base.

[Stephen Dubner]

That's next time on the show. Until then, take care of yourself and if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app. [e-mail] where we publish transcripts and show notes. This episode was produced by Augusta Chapman and edited by Ellen Frankman. It was mixed by Eleanor Osborne with help from Jeremy Johnston and Jasmine Klinger. Special thanks to Nick Nevis for Field recording in Kentucky. Thanks also to Kevin Crosby and the whole Coolmore at Ashford Stud team. The Freakonomics Radio Network staff also includes Alina Coleman, Dalvin Abawagi, Elsa Hernandez, Gabriel Roth, Greg Rippin, Hilaria Montenacourt, Morgan Levy, Sarah Lilly, Teo Jacobs and Zach Lipinski. Our theme song is Mr. Fortune by the Hitchhikers and our composer is Luis Guerra.

[Jill Stowe]

Beer for my horses.

[Stephen Dubner]

Is that a country song?

[Jill Stowe]

Whiskey for my men and beer for my horses.

[Stephen Dubner]

Can you sing a little bit of it?

[Jill Stowe]

No.

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[Richard Migliori]

If you could hear love, what would it sound?

[Family Member]

Son, can we talk about your drinking?

[Stephen Dubner]

Yeah, Dad, I think we should helping those closest to you think about their excessive drinking. Maybe that's what love sounds like. More@rethink the drink.com An OHA initiative in.

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