Racing Industry definition:
When horses are prematurely withdrawn from racing.
When horses are no longer financially viable and are mostly sent to the knackery to be killed.
Owning a racehorse is promoted as an easy way to amass fame and fortune, but very few win any money at all let alone return their training costs and/or purchase price.
When a thoroughbred destined for racing is born in Australia, its chances of being a successful racehorse are slim. It is estimated that only 300 out of every 1000 foals produced will ever start in a race.  That means of the 18000 thoroughbred foals born each year in Australia alone, an average of 12600 will be ruthlessly discarded and mostly end up at “the doggers.”
Of the horses that do race, one Australian Study found that approximately 40% earned no money at all and only 13% earned enough money to cover costs.  These figures did not include the initial purchase price. Dr Paul O’Callahan, Chief Veterinary Steward of the Victorian Racing Club states that approximately less than 2% of horses actually earn their keep. 
What happens to ex-racehorses?
While the racing industry argues that many ex-racehorses are sent to stud for breeding, the number of horses involved in breeding has been in steady decline for many years. Since 2000, the number of breeding mares has declined by 12% while stallions have decreased by 30% That means that for every horse that is sent to stud, at least one leaves. Nearly all the horses that leave the stud will be killed for meat.
Riding Schools, Private ownership
Unfortunately, saving ex-racehorses from euthanasia often condemns them to a worse fate, in a downward spiral of abuse and neglect. Few members of the public have the expertise to care for and handle horses properly, let alone understand how much they eat and how expensive it is to feed even one horse, especially during droughts or where the availability of good quality land for agistment is limited. In these situations a horse may have to be fully handfed. Many horses bought as ‘paddock ornaments’ end up totally neglected and left to starve as a result. Horses sold to riding schools or trail riding clubs can lead a miserable existence of hard work, improper care and insufficient feed. A humane and kind retirement for racehorses in some Elysian field is largely an urban myth.
A few lucky ones!
There is no doubt there are a few lucky horses that are saved by caring individuals and horse rescue shelters. Unfortunately, the numbers are extremely low due to the expensive costs and the time needed in retraining and maintaining a horse. An average healthy horse costs in excess of $4000.00 per year.
The Doggers and Abattoirs
In a business where making a profit is extremely difficult, it is vital to discard a horse as soon as possible after deciding it is no longer viable. To facilitate this, many trainers have arrangements with transport contractors, knackeries or abattoirs that pick up horses on demand. The horses are often picked up at discreet times to spare track workers, strappers, trainers and owners from the guilt of this sad reality.
Younger horses will generally be killed for human consumption in one of Australia’s 2 horse abattoirs located in Caboolture, Queensland and Peterborough, South Australia. Older horses generally end up as dog meat.
For more information See Horse Slaughter and Horsemeat: The Facts
 (Bailey etal.1999; Bourke 1995)
(They Shoot horses don’t they, Jane Duckworth 2001)
(Australian Racing Fact Book 2005-2006)