Government confirms Tote sale to Betfred for £265m
The government has confirmed it has agreed to sell its betting operation the Tote to private bookmaker Betfred in a deal valued at £265m.
The highly-anticipated decision sees Betfred’s rival Sports Investment Partners, the investment vehicle set up by Sir Martin Broughton, lose out on the prize.
The decision is also likely to stoke tensions with the British Horseracing Association, which had publicly backed Sir Martin over Betfred founder Fred Done.
Culture Secretary Jeremy Hunt said the deal was “a closely fought contest which has ended up giving the Tote business and the racing industry the certainty they have been looking for.”
“This deal has been carefully calculated to make sure that the interests of racing, Tote employees and the Tote Pension Fund were given the greatest possible weight,” he said.
In a sign of the government’s concern at a backlash from the racing industry after such a snub to its preferred bidder, gambling and racing minister John Penrose said the government had “bent over backwards to deliver a good deal for racing”.
“We are pleased that today’s agreement will see racing receive not only their 50 per cent share of net proceeds but also the separate commitment from Betfred to racing of a significant ongoing stream of commercial payments, plus a contractually guaranteed cap on the number of job losses,” he said.
The sale will see Betfred pay the government £180m, of which £90m will go directly to the Treasury.
The racing industry will also receive £90m as a 50 per cent share of the proceeds as well as annual commercial payments of £11m until 2012 and £9m each year after.
The government added that Betfred will receive an exclusive seven year licence to operate Pool betting operations on all UK racecourses, one condition of which is a requirement to provide pool betting on every approved racecourse in the country.