In horse racing where do purses come from and how are they established?

Question

In horse racing where do purses come from and how are they established?

Answer 1

In the UK a "basic daily rate" is paid to each racecourse from the British Horseracing Authority, according to how many fixtures they hold.

The remainder of the money for purses is raised from entry fees, corporate sponsorship (The Vodafone Derby, The John Smith's Grand National, etc), selling tv rights and the money they make from selling tickets.  Many racecourses over here also hire out their facilities, when they are not racing, for corporate events, weddings, etc.  The money they make from this in invested back into the racecourse facilities and prize money.

Before each season starts the BHA set out a list of guidelines stating the minimum amount a certain type of race must be run for.  Our races are graded by Class 1 - 6, Class 1 includes all the Group/Graded Races and Listed races and the remainder are made up of handicaps, classified races, conditions races, maidens, sellers and claimers, with Class 6 being the worst and offering the least amount of money.

Answer 2

Purses are paid by the individual tracks.  Tracks recieve revenue primarily from their take of the wagering pools, simulcasting fees and to a much lesser extent souveniers, refreshments, parking, etc.  The bread & butter races (claimers, MSWs, allowances) will have a set purse that the track determines based on how much they need to pay to attract competitive fields.  Stakes purses tend to be more flexible and can fluctuate if the track wants to draw more 'name' horses to create an event to gain publicity and attendance.