The waterproofing should survive several washings. I hang mine on something sturdy, and use Dawn dish soap (figure if it is safe for birds it won’t hurt my blanket). Soap it well and rinse with a hose until all the soap is gone. Or, check the manufacturer’s site for their recommendations. You can also get stuff to waterproof it again, should that be necessary. Usually, the smell is on the inside, which is not waterproof anyway.
It is never the horse's fault