Tote sale offers racing a ray of hope

The deadline was the end of this month, but the deal was agreed last week and Betfred sold the Tote to the newly named UK Tote Group.

Under its original name, Alizeti, the Group acquired a 25% share of the Tote for £20m 18 months ago, and a further payment of £95m now completes the purchase.

At a time when there are major concerns about racing’s prize-money, through a £17m ‘hole’ in last year’s Levy Board income and the ongoing closure of 100s of betting shops and subsequent loss of media rights income to racecourses running into millions, the Tote sale offers a ray of hope.

UK Tote Group Chief executive Alex Frost said: “Today marks the start of an exciting new era for the Tote.”

That would be the fervent hope of everyone. Pool betting in Britain has been in the doldrums far too long.

How did we get here?

When the Tote, which was created by Winston Churchill in 1928, had a monopoly and its profits were channelled back to the sport, it was a valuable source of both revenue and sponsorship. It also stepped in to sponsor Channel 4 racing when it looked like their coverage was going to disappear.

But pool betting was losing market share and innovation was not the Tote’s strong point. It never really found the magic formula for a major accumulator bet although the Scoop 6, started in 1999, did achieve headline-grabbing pool rollovers, but not often enough to capture the casual betting market’s attention.

Fortunately, the Tote had entered the high street market, and had a decent presence of shops from which profits were destined to be returned to the sport.

It had also introduced Tote Direct for pool bets to be taken by other bookmakers straight into the pool.

But it was owned by the state, and the state’s “family silver” as Harold MacMillan called it was being sold off, and eventually it was the turn of the Tote to go up for sale.

The government at the time lost its nerve over achieving the optimum asking price, and missed a higher price than was subsequently achieved.

Along came Betfred

The wait went on a little longer until it was time to take the plunge in 2011 and start the bidding process. Coming up with the winning offer was Betfred, who acquired the Tote and with it a valuable addition to its real estate portfolio. It also enjoyed a seven-year period where the Tote monopoly was to continue.

What happened during the Betfred ownership was – not a lot.

Racecourse Tote Credit offices were given the heave-ho, and the Tote’s Cheltenham Festival Excursion train went out of service. The 500 shops were rebranded, the technology barely advanced and many of the high-profile race sponsorships, not least the Cheltenham Gold Cup, switched from the Tote to Betfred.

Most of all there was no competition and, even if others were to try and take on the Betfred owned Tote, it would still have the upper-hand given what it had in place by way of betting shop links and the copyright on major bets such as the Placepot and Scoop 6. What’s more competition would dilute the pool.

Competition was probably doomed and, incongruously, wasn’t a good thing.

Trying to compete

But there was always someone willing to give it a go and the racecourses thought they could have a stab through their consortium called Britbet. Ironically, one step ahead, Betfred and taken out a trademark on the name and a fee had to be agreed before it could be used by the racecourses.

Whilst the racecourses could evict the Tote from the tracks, they didn’t have the betting shop links nor could they use the “placepot”, “jackpot” or “scoop 6” names.

It was always going to be an uphill battle and the possibility of an arrangement between Britbet and Betfred was highly unlikely.

A dispute had arisen because racecourses refused to give Betfred accreditation for race sponsorship as the bookmaker was not paying into the Levy on the bets it took online from its offshore base. It also meant that Betfred’s many on-course betting shops disappeared overnight.

Betfred walked away from racing sponsorship and the rift has continued although Betfred did, this year, join forces with Ascot to run their on-course betting shop and through race sponsorship.

Two pool betting operators looked like they were going to slug it out and you wouldn’t have backed Britbet to succeed.

Many of an age to remember, rued the introduction of legalised betting shops in 1961, believing it was in the best interests of racing for pool betting to have an exclusive presence on the high street. A failed “racing” funded bid for the Tote in 2011 was seen as another major setback.

Now it looked like a further opportunity was going to be squandered with the Tote remaining in the hands of private business.

Along came Alizeti

Included amongst those who didn’t want the status quo to remain, or see an attempt to compete fail, was a group of racehorse owners and breeders who had the money to make a game-changing play through Alizeti, which claims to have the backing of over 160 individual investors, the “majority” of whom they say are racehorse owners and breeders

Alizeti were offering a decent price for a share in the Tote which was a business that never seemed to sit comfortably with the rest of the Betfred operation. And, they had no “history” with the racecourses.

They presented a proposal that by the end of October 2018 they’d be a major shareholder in the Tote, and the racecourses agreed to step back from introducing their rival pool operation. Give Alizeti another year and they’d be the outright owners of the Tote.

And that’s were we are now. The Tote is now owned by Alizeti which changed its name to UK Tote Group to mark the occasion.

They said they would share their plans to develop the Tote in the coming weeks, including a new website the return of Tote Ten to Follow.

They will have a continued partnership with Britbet and aim to deliver an innovative and enhanced pool betting experience. They need to, and there’s a long list of things to do.

The reality hits home when the usual Totepool advertisement on page two of the Racing Post the day after the deal was announced is for Betfred, not the Tote. But the appearance of the ad strongly resembles the look of the Totepool ads.

Branding, as these scribblings have said before, is of the utmost urgency. And that goes for racecourses, where it’s a bit of a mish-mash with different interpretation at different tracks.

Technology needs to be addressed pretty quickly too, not least so that betting slips can be scanned at the point of betting. And there’s a need for racecourse screens showing the pool values which bear a closer resemblance to the final dividend.

But, above all, the UK Tote Group will need to re-engage with regular and casual punters alike. And top of the list must be the creation of an exotic bet that’s not made so ridiculously hard to win that it is off-putting.

There’s a lot of work to be done.