• Platforms allow investors to own a small share of a Thoroughbred.
• Delays in the SEC registration process make it challenging to price horses that are actively racing.
• Investors can get perks with their shares that help generate interest in the sport.

Kevin Richardson grew up in West Baltimore and credits horse racing with keeping him out of trouble. He started out cleaning stalls and worked his way up to be an assistant trainer. His love of the sport made him want to be an owner and today he brags of owning shares in 25 horses.

"To start on the bottom and end up becoming an owner or part-owner of a great racehorse, it's everybody's dream," said Richardson as he stood in front of the horse stalls at the Pimlico Race Course in Baltimore.

Businesses such as SportBLX and Myracehorse.com are offering shares of racehorses to investors. For less than $100 a share, people can own a fraction of race winnings, stud fees and other revenue. It also opens doors to opportunities to attend events.

The offerings are regulated by the Securities and Exchange Commission, which requires investors to hold shares for at least one year. Currently, there isn't enough of a market for investors to sell these shares. Instead, the holding company is liquidated when the horse is finished and investors are paid any remaining returns.

Richardson has invested through both SportBLX and MyRaceHorse.com.

"I want to make money like anybody else. But, you know, you can't come on in for that reason," he said.

SportBLX co-founder Joe De Perio acknowledged that it's tough to make money investing in racehorses.

"You shouldn't go in thinking that you're going to make a lot of money because the numbers ... don't bear that out," said De Perio.

When a horse is racing, there can be a lot of volatility. A win can increase the value of prizes, along with stud fees and leasing opportunities, but an injury can wipe out value. That makes pricing racehorses risky and adds to the challenge of what's known as a Regulation A offering. Under that security, each horse offering has to be approved and the timeline for getting that done can take several months.

"What's happened is we've just had to stay away from horses of racing age. And we've kind of gone into buy babies, yearlings, two year olds, and they don't have that kind of volatility," said Michael Behrens, CEO MyRaceHorse.com.

Rep. Andy Barr, a Republican whose Lexington, Kentucky district is located in what's known as the "Horse Capital of the World," is pushing the SEC to make it easier for retail investors to own a stake in a racehorse.

"Innovative companies are democratizing the exciting business of horse ownership by selling securities of these horses, allowing retail investors to own part of the racehorses they see in the Kentucky Derby, Belmont Stakes and other races nationwide. Unfortunately, regulatory red tape is slowing the growth of this innovation," said Barr.

Owners get the most excitement from horses that are actively racing. The platforms cater to investors' desire for the perks of ownership. Along with shares, ownership provides opportunities to meet with trainers, visit stables and even have a photo taken in the winner's circle.

"A lot of our investors have been very desirous of being participatory in horse racing," said Behrens, who added that it's a "fun part of the game."

MyRaceHorse.com sold shares in Authentic before it won the Kentucky Derby in 2020. Investors got to be a part of the excitement of owning a winner, but the prize money for that race wasn't a big payoff for investors. Performance bonuses to the original owners and expenses got the bulk of that upfront cash, even as the horse gained value in stud fees.

Investor Elliot Levine said he might break even on the four shares in Authentic that he bought off of MyRaceHorse.com.

"Boy, it was the biggest thrill just being part owner of a horse in the Derby," said Levine.

The disclosures required by the SEC make it clear the risk is high for these investments.

"These risks include holding your investment for periods of months or years with limited or no ability to resell and losing your entire investment; you must have the ability to bear a total loss of your investment without a change in your lifestyle," the MyRaceHorse.com prospectus reads.

"People are really doing it for this idea of joining a community getting access to a world, getting to go to physical events that allow you to kind of get closer to this, you know, the horse and the asset you've invested in," said Behrens.

Risks could turn into rewards if investment in racehorses generates enthusiasm in the sport, which has seen a sharp decline in popularity over the last 20 years.

Barr, who sponsored the Horseracing Integrity and Safety Act, which was signed into law last year, said he hopes that investment interest combined with a drug safety program and standards of competition "can strengthen the sport's future for generations to come."

That's a bet horse racing fans hope will pay off.