Governments have been trying to privatise the Tote for 14 years Betfred buys the Tote for £265m
Governments have been trying to privatise the Tote for 14 years UK-based bookmaker Betfred has been chosen to buy the Tote after an auction process that began in November.
Betfred, the country’s fourth-biggest bookmaker, will pay £265m for the business.
The sale is subject to consultation with the Tote’s employees and is expected to be completed in about four to eight week’ time.
The Tote has 517 High Street shops and the monopoly to run pool betting online and at 60 UK racecourses.
The sale agreement signals the end of a 14-year attempt by governments to privatise the betting group, which employs more than 3,500 staff.
Betfred’s main rival in the auction was Sport Investments Partners (SIP), a consortium led by the British Airways chairman Martin Broughton.
The Culture Secretary, Jeremy Hunt said: “It was a closely fought contest.
“Of the £265m in the headline price only just over £90m will end up being paid to the Treasury.”
As part of the deal, Betfred will keep exclusive control of the pool betting system on UK racecourses for seven years.
In return, it has committed to paying the racing industry £11m to March 2012, with payments of £9m a year for the next six years of the licence.
Pool betting differs from that offered by other bookmakers.
Tote pool betting explainedThe winner is paid according to the size of the stakes in the poolThe Tote subtracts a percentage of the stake pool and then pays the rest equally to any winnersThe greater the number of winning tickets, the lower the payout to each winnerThere are no limits on prizes
The Tote takes a percentage of stake money placed. Of this percentage, some is used to cover the Tote’s expenses while the rest goes to the racing industry.
The rest of the stake money is paid out to winners.
Betfred’s executive chairman, Fred Done, said in a statement: “Buying the Tote has been an ambition for years, so I am absolutely delighted.
“The Tote is an opportunity I just could not miss. Over the coming months I will develop the Tote’s relationship with the sport into a highly successful commercial partnership.”
The gambling and racing minister, John Penrose, said the government had “bent over backwards to deliver a good deal for racing”.
He added: “Most people can’t understand why, in the modern world, the government should be even part owner of a bookie. So we pledged last year to end years of dithering and resolve the future of the Tote, and today we have done just that.”
The Tote was set up 83 years ago by Winston Churchill to provide a safe haven for punters, as it was controlled by the state and beyond the reach of illegal bookmakers.
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