U.K. Sale of Tote Bookmaker May Bring Job Cuts, Chairman Mike Smith Says
Selling the Horserace Totalisator Board, the state-owned bookmaker known as the Tote, to a third- party bidder may lead to job losses and could hurt British racing, its chairman said.
The U.K. government is trying to sell the Tote, which employs 5,000 people, as it goes through its biggest budget squeeze since World War II.
Bookmakers Betfred Ltd. and Gala Coral Group Ltd., billionaire property investors David and Simon Reuben and Martin Broughton, who oversaw the sale of Liverpool Football Club in October, are all bidding for the country’s fourth-largest bookmaker. The Racing Foundation, which is headed by Smith and fellow Tote executive Trevor Beaumont, has also put forward a proposal.
“The worst-case scenario for us is that the Foundation doesn’t win and that someone taking very short-term views does not feel obligations to staff or the racing industry,” Tote chairman Mike Smith said in an interview with a small group of reporters in London today.
The Tote contributes close to 4 million pounds a year in prize money to British racing, or one-third of total winnings, Smith said.
“There must be a risk - particularly if a bidder has short-term backing from private equity - that it does not give such support as the Foundation can give,” said Smith, a former Chief Executive of U.K. bookmaker Ladbrokes Plc.
A sale of the Tote may raise as much as 200 million pounds, according to reports last month by media including the Sunday Times.
The Tote was founded in 1928 as an on-course alternative to bookmakers at horse race meetings. The company has a monopoly on pool betting on racing, a form of gambling where the money wagered is combined and, after a deduction for costs, is divided up among winning bettors.
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