Buyer Beware

The Jockey Club of England apparently is poised to clamp down on the fleecing of horse owners by banning agents and trainers found to be in serious violation of an industry code of ethics from the country's 59 racecourses.

The proposal, reported in the English press, comes on the heels of a court case in which a judge accused prominent bloodstock agent Charlie Gordon-Watson and trainer David Elsworth of "bribery" in the sale of a horse to California-based agent Richard Duggan. According to published reports, Gordon-Watson offered Elsworth a sweetener of £10,000 if the owners of Foodbroker Fancy offered the horse for sale. That was in addition to £13,750 the trainer would receive from the owners as a commission. The additional commission was apparently built into the selling price.

While that type of activity might be looked upon by some as standard business practices for the horse industry, a court of law might consider it fraud.

It's about time someone stood up on behalf of the industry's biggest investors, the owners.

Too many organizations, particularly those that operate sales companies, look the other way when owners are cheated. Though it's impossible to tell how widespread the practice is, it's a safe bet that it's been going on as long as horse trading itself. But there's no reason it has to continue.

Kickbacks and other fraudulent behavior are something many industry professionals don't want to hear about, suggesting that mere recognition of the problem will keep potential owners away. But they should worry just as much about protecting current owners from the cheaters.

It takes two to tango. For every agent or trainer seeking a kickback or offering a sweetener, there is a seller who agrees to be a party to it. If the seller is an agent, in some cases he has to explain to the horse's owner or breeder why the final bid on the board may not equal the amount actually paid by the buyer. That is especially true if the shenanigans involve a horse sold at public auction. The Foodbroker Fancy affair was a private transaction.

There have been cases, very few, where the owner of the horse being sold was fed up with the dishonest behavior, and the buying agent's client alerted. In one case, well-known in bloodstock circles in Kentucky, an agent representing a prominent buyer solicited a kickback from the seller, who reluctantly agreed to write him a check representing a percentage of the sale price. But the seller also made a copy of the check and mailed it to the agent's client, letting him know that his agent was receiving commissions from both sides in the deal. The buyer quickly fired the agent.

Unfortunately, there are not enough sellers willing to expose the cheaters, even though many breeders and agents are frustrated by some of the strong-arm tactics used by agents and trainers.

That's too bad, especially since organizations like the National Thoroughbred Racing Association, the Thoroughbred Owners and Breeders Association, and Keeneland are making a commitment to recruit new owners to racing. Every effort must be made to protect the buyers from being fleeced. That isn't being done.

It seems to me the horse industry has it backwards. In the rest of the world, the consumer is king, and consumer protection is paramount. In the bloodstock world, consignor protection appears to rule. At a Thoroughbred sale, for example, a buyer may have no idea who owns the horse being offered. The agent representing him may have made a secret deal to buy the horse privately from the seller, and then run the price up on the unknowing owner. The buyer also has no idea whether the horse had corrective surgery to artificially straighten legs that may have been crooked at birth.

It's time for that to change. The Jockey Club of England is making the right move. It's one that should be followed elsewhere.