Top bookmakers will meet Treasury officials this week to voice their concerns about the upcoming privatisation of the Tote.
Labour has made a manifesto pledge to privatise the Tote, which operates pool as opposed to fixed-odds betting, and the proposal is set to be included in the Queen's Speech next month.
Under the current timetable, the Olympic Lottery and Horseracing Betting Bill, as it is known, will be introduced to Parliament in the first half of December and the Department for Culture, Media and Sport (DCMS) is hopeful it will become law by July 2004. But bookmakers are concerned that the business, which includes 435 betting shops, could be handed over to the horse-racing industry.
That would give horse-racing an unfair competitive advantage, they argue, and would also mean they miss out on a rare opportunity to expand their business in one large swoop.
Both Ladbrokes and William Hill are known to be interested in buying the shops and a value has been put on the business of around £500m.
However, Jack Straw announced in 2000, when he was home secretary, that the Tote must be sold to a consortium of racing interests and not on the open market. Although the bill is still in draft form, it is understood that the DCMS remains committed to Mr Straw's decision.
The industry figures are meeting with the Treasury to discuss both the value of the Tote and how it thinks the sale should proceed.
"The Government has built the Tote on taxpayers' money and is now going to give it to horse-racing for free," says one industry insider.
"We don't think that this business should transfer into racing's hands at a nominal value - that's wrong. We have an interest in understanding if there are any business interests for ourselves."
The Olympic Lottery and Horseracing Betting Bill is part of a move by the Government to deregulate the entire gaming industry, which is currently subject to a number of archaic laws.
The original intention had been to deregulate the industry all at once, but other more pressing legislative issues - such as asylum-seekers - means it will now be done in two chunks.
The Lottery part of the bill is being introduced so the money can be used to fund the UK's 2012 Olympic bid.
The other area of the gaming industry set to be shaken up at a later date are the rules governing casinos.
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