UK-based bookmakers Betfred has won the battle to secure the purchase of the Tote from the government for a total consideration of £265 million, following an auction process that began in November.
UK-based bookmakers Betfred has won the battle to secure the purchase of the Tote from the government for a total consideration of £265 million, following an auction process that began in November.
The UK’s fourth biggest bookmaker is to pay an initial £150 million, with further amounts, including interest accrued, of £115 million. The purchase brings to an end a 14 year attempt by governments to privatise the betting group.
Jeremy Hunt, the government’s culture secretary, says that the auction was a closely fought contest, with the treasury set to see £90 million of the acquisition price.
As part of the deal Betfred will be awarded an exclusive seven year licence to operate pools betting on UK racecourses and is acquiring the Tote’s 517 shops and online businesses.
Fred Done, executive chairman of Betfred, says that the acquisition has been an ambition of Bedfred’s for years.
Done adds: ‘The Tote is an opportunity I just could not miss. I love racing and believe we have the greatest in the world.
‘Over the coming months I will develop the Tote’s relationship with the sport into a highly successful commercial partnership.’
Betfred’s CFO and chairman of the newly formed Tote Racing Development Board, Barry Nightingale comments: ‘We are pleased to have been selected by the Government to be the new, long-term owners of the Tote.
‘I am confident that, working with Tote management and employees, we will together be able to grow the business, develop the pool and […] be able to return more to the racing community.
Tote betting works on the basis of the winner being paid according to the size of the stakes in the pool. The higher the number of winning tickets the lower the payout to each winner there are.
According to a statement Bedfred has committed to payments to Racing of £11 million to March 2012 and an expected £9 million annually for the next six years after.
