The group chief executive of the Jockey Club, which owns and operates 14 racecourses in the U.K., called for the state-controlled Tote betting business to remain independent instead of being sold as planned.
The Tote’s profit -- currently about 21 million pounds ($33 million) a year according to the Jockey Club -- goes back into racing, and the racecourse body doesn’t want the sport to lose that income. A U.K. government deadline for bids to buy the Tote, the country’s fourth-largest bookmaker, expires today.
The business could be sold for about 250 million pounds, Sky News said this week, adding that billionaire property investors David and Simon Reuben may bid. British Airways Plc Chairman Martin Broughton, who oversaw the sale of Liverpool Football Club in October, is leading a group bidding for the bookmaker, the Financial Times reported yesterday.
“We can’t really see a solution that would be better than leaving the Tote independent,” Simon Bazalgette, group chief executive at the Jockey Club, said in an interview yesterday.
Bookmakers Betfred Ltd. and Gala Coral Group Ltd., and football pool operator Sportech Plc, are among potential bidders, according to U.K. media.
“There is value in leaving it independent, because it protects not only racing revenues, but it protects on-shore tax revenues and employment,” Bazalgette said. “The risk is if a third party comes in, they could take parts of the business offshore, which would deprive the government of tax -- as a lot of bookmakers have done.”
The U.K. government is trying to sell the Tote as it goes through its biggest budget squeeze since World War II after the longest recession on record.
“The Government is committed to resolving the longstanding question of the future of the Tote, and will explore all options for how to do this in a way that secures value for the taxpayer and which recognizes the support the Tote currently provides to the racing industry,” the Department for Culture, Media and Sport said in an e-mailed response to questions about the Jockey Club plea.
The Tote, or Horserace Totalisator Board, was set up by an Act of Parliament in 1928. It employs more than 3,500 people in 500 shops in the U.K. 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.
Selling the Tote to a third party would have a negative impact on prize money in horseracing, Bazalgette said.
“We think that’s a risk not worth taking,” he said.
‘Not a Good Trade’
Racing would get about 50 percent of the proceeds of a sale, he added. That money may have to be put into a non-commercial entity such as an education trust in order to avoid “state aid issues,” he said.
“Trading a commercial revenue stream for money that goes into a lump sum that goes into non-commercial things is not a good trade,” he said.
Founded in 1750, the Jockey Club previously regulated the sport of horse racing. Its businesses include the Cheltenham, Aintree, Epsom and Newmarket racecourses.