I found a video earlier on Youtube of a gelding clearly in the throes of sexual excitement - dick out of its sheath, prancing, head arched.
The owners said it couldn't possibly be that because "there were no mares around."
I've also witnessed homosexual mounting between young colts who are turned out together. Although geldings exhibit less libido, they aren't completely sexless.
So, are horses gay?
The answer is: Probably not.
A gay horse would be a male horse who preferred to sexually display to, and mate with, other males when females are available.
Most homosexual activity observed in horses is seen in animals that do not have access to the opposite sex.
I have not personally met a horse that prefers their own sex - although they could be out there (I have, however, known a dog that would definitely ignore bitches to flirt with other males).
Like sailors at sea so long their bunkmate starts to look good to them, they aren't gay - just horny.