i dont know all the criteria, but some criteria is purse money, longevity, restrictions ( or lack of ) , how horses fare from a race in future races. the Committee grades on the overall quality of the previous fields and the performance of horses in the previous fields in stakes both prior to and after the race. For example: if the winner of the Breeders' Cup Turf raced in the Arlington Million then the race would almost certainly be a Grade One.
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