Here's the money. When do I see the horse?: At Ballinasloe fair, there is no auctioneer to spoil a decent deal. Mark Holdstock explains trading rituals in Co Galway

The Irish have two national pastimes: political scandals and horses. For good scandal you go to Dublin, but for the horses you go to Ballinasloe, in County Galway. This year's three-day horse fair, which will start on 3 October, will again be the largest in Europe, a raucous combination of businesslike farmers and hundreds of gypsies.

Serious money is involved. Last year, Phillip Lee, a south London car dealer, was in the Jekyll and Hyde bar with a pounds 50,000 banker's draft to buy the horse he wanted - he said he'd know it when he saw it. In the meantime, he spent pounds 5,000 on a horse he had never seen.

'I trust the dealer,' he said. 'I've bought horses off him before. Anyway it's only a pet. I'm still looking for that elusive one.' His main attraction was just out of reach. 'I've offered a guy pounds 37,000 for it, but he says he isn't interested in selling. He will, once the drink starts to take hold.' That sort of price is nothing for a gypsy horse. In 1990 one changed hands for pounds 100,000.

Jim Connor, the bar manager at the Jekyll and Hyde, told of one English buyer who asked if he could change some Irish punts into sterling. 'We're usually happy to oblige, so I asked him how much. 'Forty thousand,' he said. 'Not a hope, said I'

For the bars, the fair is big business, but it does bring trouble. Some say it is caused by the travellers, others believe the travellers are used as an excuse for general lawlessness. Youths from Dublin come to sample the atmosphere, run out of money and tend to help themselves, either to money or cars.

'The other year some of them broke into an old lady's house, tied her to a chair, then threatened to set fire to her. It's giving the fair a bad name,' Mr Connor said.

Part of the fascination is the ritual. There's no auctioneer, no record of what is bought and sold, and nobody advertises the price. Dermot Connolley, a local historian, compared it to a courtship dance. 'The seller will totally ignore the potential buyer, who will look only casually at the horse. If he's serious about buying it he might venture to make an offer and this of course will be far too low, so the two parties will walk away from each other.' This is where a 'fixer' comes in and tries to bring the buyer and the seller back into the dance to cement the deal, which is sealed by the slapping of hands.

There's also 'luck money', as Seamus Campbell, a smallholder from Donegal, explained. 'When the deal is done, the seller hands back a small part of the price - perhaps only a few pounds - to the buyer as 'luck money'.

'If it's a gypsy dealer, they take the wad of notes you give them for the horse and put it in their trouser pocket. Then they reach into their jacket for a second wad of notes and give you the luck money out of that, never out of the actual price.' Failure to give this money can be seen as grossly insulting, and in horse circles giving offence can mean a bloody nose.

The horses are raced, with traps or sulkies behind them, often illegally on public roads early in the morning. In Ballinasloe they are driven up and down a short stretch of concrete at terrifying speeds to show them off to potential buyers. A couple of years ago an old man was killed when he fell under the wheels of one.

At dawn on the Monday morning, the final day of the fair, about 20 gypsy horses came trotting down Dunlo Street. At the front of the column a lad rode bareback, without a hat or a shirt, behind him another lad kept the horses moving. They had been rested in a field on the edge of town overnight, and were being brought in for one last attempt to sell them, otherwise the owners would have to feed them through the winter. Sold horses had a lump of earth placed on their rumps.

By the Monday, Phillip Lee had got his horse. Like so many of the really expensive ones, this prize mare had never set a hoof on the selling green. Mr Lee had to prove that he was really serious before the seller would even show it to him. 'She's really beautiful. I'm paying an extra four hundred pound to have her shipped back straight away.' This was a wise move. Some of the horses that wait to be shipped in bulk arrive in England unwell, dead, or completely different from the one the buyer forked out for.

At the end of the fair, Joe Buckley was waiting to catch a taxi back to Dublin. Mr Buckley, a general dealer from Kent, has an uncomplicated, unreconstructed male view of horseflesh. 'It's like looking at a woman. A good horse can really get you going.'

He had bought a stallion while severely under the influence the previous night and it wasn't all it seemed - it turned out to be short of a testicle. He remained philosophical. 'I'll find someone to buy it back in England.'

The British buyers managed to break the local banks, and were complaining bitterly about having to take taxis half way to Dublin to find a bank with enough money left to cash their banker's drafts.

But by and large the British buyers seemed happy - they'd got what they came for and prices had been reasonable. However, some horses would not be crossing the Irish Sea. 'The Irish breeders don't like their best stock leaving the country,' Phillip Lee said. 'There was a really good stallion sold to an English buyer on the Saturday for pounds 11,000, then bought back on the Sunday for pounds 18,000 by an Irish breeder to stop it leaving the country. I think it may have been sold for a third time, but that was just a rumour.'

There was a time when the Ballinasloe fair supplied horses for half the armies in the civilised world. Next month the Irish will still be defending the cream of their horseflesh against invaders - however big the banker's drafts they are waving around.

(Photographs omitted)