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Buying a gene from the roving gene sale and getting the license for it that way allows you to breed with that gene. I don't own the Onyx gene license, so I can't breed or buy unaltered Onyx horses. I own the mushroom license, so I can buy any mushroom horse or straw I want.

ConfluenceStable has a pinned post which includes a lot of good info! The first post is all about showing & payout.
https://www.huntandjump.com/forum/discussion/31645/basic-information-for-new-players#Item_15

Ask as many questions as you need, this is a complicated game! It generally takes several months of playing a lot to get a good grip on everything. And people who've been here for years will still learn something new sometimes!

I'm sorry you don't always get useful answers. We do try to help out new players as much as possible but this is a very complicated game and sometimes the answers can be quite complex! When asking a question try to be as clear as possible about what you are asking. Splitting the question into separate parts can help. Also the posting rules at the bottom help all of us to understand what people are writing, some people do not have English as their first language which is why we are asked to use proper spelling and grammar as much as possible. Finally, if you don't find that a post has been useful in answering your question, then ask for clarification, someone is sure to be along who will do their best to explain it in a different way. :)

1. Horses have a range of quality in the foals they can produce, both in showing ability and in breeding ability. Each horse can produce foals ranging from better then themselves, as breeders (again, the parent's showing ability is irrelevant), to much worse. The higher a horse's breeding score, the higher that range goes, but it does not mean they won't still occasionally produce much worse foals. I don't think we know when and how much the bottom of the range raises as the breeding score increases. In my experience, getting a C papered horse from a Star/Gold pair is pretty rare, but, like most, I don't bother to paper most of my snips (though it's free to do so), and a horse like that would definitely fail BA
Also, a note - that post that Silo linked seems useful in mechanics, but the descriptions of testing are outdated. Some of those tests don't exist anymore, and it sounds like this is from before papering could be done with no foals on the ground

2. The Daily Payout process:
-When a horse enters a show, they earn points based on how they place in the class. The higher they place, the more points they get. These points are theirs to keep, and they collect them over time.
-Training increases a horse's show score - how well they do - which moves them up the places in the class, which means they earn more points per show. Improving enough to move to a higher class means that they may be at the bottom of the class for a while again, but until they level off they will keep improving.
-Those points are translated into daily payout. I don't remember the exact calculations, but the more total points all of your horses have, the higher your daily payout will be.
- A horse's estimated lifetime payout is their daily payout multiplied by the number of days between now and the monthly rollover when they age from 17 to 18 and have a chance of aging out. If they're already 18, then it's the days until next rollover, when they have a chance of aging out. Basically, how much they will earn you if they earn no more points and age out at the soonest possible rollover.
- A horse's daily payout only increases, and will keep increasing until they level off, and then it depends on where they level off. The unlucky ones who happen to level off at the bottom of the class they're currently in will not earn many, if any, more points, and their daily payout won't increase. These are the horses that people auction after ten years old, because then you get the entire lifetime payout and open a stall, and you probably wouldn't get much more by holding on to them and collecting their daily payout until they age out. A horse who levels off at the top of the class, however, will keep earning points because they're placing well, and that means their daily payout will continue to increase. You get more from these over time by keeping them and collecting the daily payout than you would by auctioning them.
- A horse with no points (and only creates from new players start out with points, lined foals and creates from everyone else start with no points) will earn points as they go, so yes they're worth keeping (depending on the rest of the factors, obviously). I keep all my snips with a PT score of 11 and above, because they gather points for longer and tend to end up with more. I see plenty of horses start with 0 points as a new foal and end up at over a thousand.

The only free spreadsheet I can think of is Google Sheets, if you have a google account. I don't usually make spreadsheets, though, so maybe there's something better out there that I don't know about.

3. No. An Exceptional Show horse has no particular boost to their breeding ability score, just their show score, so they could be anywhere in the same range of breeding scores as a 'regular' foundation. They might be a good foundation breeder, they might not. BA/SBA will help you determine this

4. Because there is roughly a metric poop-ton of horses in the game. Seriously, as of this exact moment there are 1,166,056 living horses on this server. You don't make money selling horses. I frequently sell horses at a loss, especially lab babies, that cost me at least 9,500 hbs each just to make. They just aren't worth that much to other people when there is undoubtedly something 'better' - by whatever metric that player is using - out there for less. This is why points are so important. The money to breed and then test your foals has to come from somewhere, and it ain't gonna be horse sales

5. A gene license allows you to A. own intact horses with that gene B. breed horses with that gene C. buy intact horses with that gene from other players and D. buy straws and eggs from horses with that gene, or breed to horses up for stud with that gene

Actually, Oscar, you explained that very clearly, I understood you easily. I always have been wondering why the specials have such a long list of genes, and why some of them look only like ordinary horses. Thank you.

Actually, You all have written those posts well enough that they make sense to me. I'll have to re read them a few times to remember them, though. Thanks!

No kidding addictive. Sometimes when I'm trying to figure things out I see the sun rise. I joined the game a while back, spent a couple of years, then sort of gave up. I was winning enough to be making income, but I don't know how I managed it because I didn't have a clue what I was doing. I was breeding high PT to high PT, for example, and as for the Ex Pros, many just became show horses because I didn't really have a clue what to do with them. I was winning, but not having fun.

Keep on playing and keep on asking questions. (ConfluenceStable says "The only dumb question is the one you don't ask.") The more you do these things the more you will learn about horse color genetics AND about how all kinds of genetics do their work. Eventually, you, too, can become an expert. :)

That's what this game is all about.

I first ran across an ad for this game in 2010 and read the rules. (Not the ins and outs of the game, just the rules.) I felt rather intimidated, but I knew that my daughter (who has a Bachelor's Degree in Biology) had always loved her genetics classes in high school and college, so I pointed it out to her. She started playing right away, and I sat behind her and watched over her shoulder while she played for 8 months. Then I felt comfortable enough to start my own account and have never looked back. Now my greatest joy in the game is helping new players understand it too.

So, you see, it's possible to learn how to play this game, even at the advanced age of 64-65 with an education that focused on languages and literature, not science. :D