Johnny the Horse was kicked to death. He died for entertainment.

I was poking through my CD's and came across a stack of Madness. "Johnny the Horse" was the first single off of their 1999 comeback attempt, Wonderful. I'm always moved by the contrast between the upbeat tune and the bleak subject matter and I've always suspected that it was written in response to an actual incident, just due to the power of it, but I've never thought to do the research to find out.

From an interview with Cathal Smyth:

The idea for the song came from an incident I had with two down and outs who used to sit drinking on a wall at the end of my street. They had become a fixture of my street for some four to five years and I had taken to stopping and talking with them as they were pleasant and I like to think that all of us should have more time to stop and talk. One was an Irish ex-boxer who was a gentle giant and a little punch drunk the other was Scottish and very quiet. Well one day I saw Dempsey in a state of distress, he was crying and full of grief. I asked him what was the matter and could I help and he told me that his Scottish friend had slept in a derelict building and some thugs had come upon him and killed him. I was moved to write about this and try to point out that there are so many who disappear onto the streets and they are forgotten or ignored....