This seems illogical at first because the auction prices would inevitably be lower and this would cost the auctioneers money. Turns out that they are auctioning off police seizures, so it costs the government money, not the people running the auctions. It's basically the government subsidizing black people by offering them auction items at an artificially deflated price.

The government does something similar here by requiring you to have a dealer license to go to a public auction. This in effect lowers the cost for dealers because the competition is reduced, and it also forces everyone else to buy from the dealers instead of buying a wreck and fixing it up themselves.