THE credit crunch yesterday took a bite out of racing when the government announced that it wouldn't be going ahead with the proposed sale of the Tote "due to current market conditions."
A brainchild of Winston Churchill, the 'Nanny Goat' as it's affectionally known, or The Horserace Totalisator Board as it's known in official circles, the Tote has been under public ownership for 80 years, but its privatisation has been a Labour
party manifesto commitment since 2001.
The then Chancellor Gordon Brown confirmed this policy in his 2006 Budget.
As can happen, however, just because someone wants to sell something doesn't necessarily mean someone else wants to buy, especially if they think the price is too steep.
While those within racing have always been anxious to ensure ownership of the Tote remained within the sport, an attempted industry led buy-out of the organisation in September of last year failed when their offer was deemed not to have reached an independent assessment that the Tote was worth about £400 million.
That led to the Government announcing in March of this year that it would move to a sale on the open market, a move that has now been put on the back-burner.
"In July, I said that whilst the Government remained of the view that it should remove itself from detailed involvement in the affairs of the racing and bookmaking industries, it would need to be satisfied that it was right to proceed with a sale in the light of prevailing market conditions," explained sports minister Gerry Sutcliffe in a written statement to Parliament.
"After further work over the summer, I have now concluded that it is not appropriate to pursue a sale in these market conditions and have, therefore, decided the Tote should be retained in public ownership for the medium-term and brought to the market when conditions are likely to deliver value for the tax payer and racing. It is right that the Tote is now given time to grow the business so that any future sale will achieve maximum value and in particular, I would expect the Tote and racing to continue to work closely together for the benefit of the sport and the punter."
Following the Minister's decision, Tote chief executive Trevor Beaumont was one of the first to express his relief that the status quo would remain, for a while at least. "We are delighted to have reached a position of clarity on the Governments intention over the sale. We are now looking to being able to drive the business forward. This announcement has lifted an immense weight from the shoulders of our staff."
Nic Coward, the British Horseracing Authority chief executive added: "Racing urged the Government to make a 'no-sale' decision in July because we considered then that it was the only realistic option for Government, the Tote and racing. It's even more so now.
"The BHA welcomes the minister's statement that the Tote and racing should work closely together. We are natural business partners and see striking deals in relation to pool operations with racecourses, and making the most of opportunities such as international co-mingling of pool betting, as vitally important to both."
"This works across the world and makes sense for all parties in Britain, alongside a proper return to racing from other parts of betting through the Levy.
"There are undoubtedly tough times ahead, but our sport was the reason behind the Tote's creation. It is central to its business and the initial Labour manifesto commitment in 2001 pledged to sell the Tote to racing and 'allow it to compete commercially, with all long-term profits invested in the sport'.
"The other major funding issue, the Levy for the next year and beyond, remains to be addressed."
BACKGROUND
THE Tote, founded by Winston Churchill in 1928, is the only UK organisation permitted to run pool betting on horseracing.
Controlled by the state, its original purpose was to offer an alternative to starting-price betting with bookmakers and to distribute its profits for "purposes conducive to the improvement of breeds of horses or the sport of horseracing".
Pool betting is a bit like your office sweepstake on the Grand National, but on a much bigger scale. Gamblers pay a fixed price into a pool before making a selection on the outcome.
The pool is evenly divided between those who have made the correct selection. There are no odds involved, because each winner's pay-off depends simply on the number of gamblers and the number of winners.
The concept was introduced in 1923 by Littlewoods Pools, and was based on football.
The Tote has grown to become the fourth largest bookmaker in the UK, and employs about 4,000 staff.
