Newmarket hosts the ultimate in gambling on racehorses

EVERYONE knows that gambling and horses go together like alcoholics and anonymous. For the most part, we think of betting on which of the four-legged beasts can run faster than the others.

But next week's Tattersalls Houghton Yearling Sale, at Newmarket in Suffolk, will witness a form of high-stakes racehorse gambling that makes the world poker championships look like a vicar's whist drive.

It is called pinhooking - the speculative buying of foals with the aim of selling them as yearlings for profit - and for the winners the rewards are very high indeed.

At the equivalent sales last year, a colt by the stallion Nureyev was sold by Irishman Timmy Hyde's Camas Park Stud for a European record 3 million guineas. Mr Hyde bought the colt as a foal the previous November for just $360,000 (pounds 219,000). His only other outlays - insurance, food and veterinary bills - will have come to no more than pounds 10,000. Similarly, in 1998 Andrew Lloyd Webber's Watership Down stud made a profit of 80,000 guineas on a colt foal it bought just nine months before. At the recent Keeneland sales in Kentucky a syndicate sold a foal colt for $1m, which had cost a mere $62,000 eight months before.

These "pinhookers" derive their name from the Kentucky tobacco warehouses where a fishing hook or pin was put into a bale of tobacco with a label attached to it indicating its price. A buyer who then tried to sell the bale for a profit was labelled a pinhooker. The word has come a long way and nowadays there are even internet sites declaring: "Pinhooking partnerships - if you'd like to make money, call us and go to the beach".

Predictably, cautionary tales abound: the 100,000-guinea foal that was sold on for just 5,000 guineas a few years back, and the 250,000-guinea foal that never even made it to the yearling sales. Mr Hyde will be hoping for a better return next week when he auctions three colts: one a Rainbow Quest colt cost him $650,000 last November. Mr Hyde has pounds 1.2m riding on the sales, but he will be comforted by the recent Kentucky sales, where average prices were up 40 per cent this year.

Tony Morris, a pedigree expert, said: "He's been doing it long enough, but I don't know how. I knew one man who had three heart attacks from the game, but pinhookers get a real buzz out of it. They're an intrepid bunch."