Straw urged to sell the Tote

THE TOTE, the state-run on-course bookmakers, should be sold for up to pounds 120m, an influential committee charged by the Home Secretary Jack Straw with reviewing the future of the organisation will recommend.

But it will warn that the powerful racing lobby, which includes Robin Cook, Foreign Secretary, may scupper a privatisation Bill in the House of Commons unless the Government finds extra money to fund the sport.

A Bill could also be delayed in an unreformed House of Lords because of the backing that many peers give racing.

The Tote, a self-financing government-owned corporation which runs on-course betting shops, provides one of racing's main sources of income.

In 1997, pounds 7.9m of the Tote's pounds 12m profits was diverted to racing via sponsorship, prize money and various projects.

The committee, which began its enquiry last August, will recommend that around pounds 8m of the betting levy be diverted into racing if the Tote is privatised.

It will warn that the Tote will be worth far less than its estimated pounds 120m price-tag if the privatised company is still expected to fund racing.

The report will recommend that Britain follow Australia's example; Australia diverted betting duty to its racing industry when it privatised its state betting shops.

It is expected also to suggest that tax from other forms of gambling such as fruit machines or casinos be channelled into the sport.

The Tote, along with other bookmakers including Ladbroke, pays a 1.08 per cent betting levy to the government on top of ordinary tax. The levy raised around pounds 350m last year for the Treasury.

The Treasury, which is pushing for privatisation because of the extra revenue it will raise, is expected to begin moves to sell the Tote this year, with a Bill reaching Parliament in the next parliamentary session.

The Tote is likely to be sold to one owner - probably a venture capitalist - in a bidding war, but it may be floated, with the Government retaining a golden share.

The committee, which is made up of senior Home Office and treasury officials and chaired by the chairman of the Tote, Peter Jones, was not expected to come out in favour of privatisation because of the problem of opposition from the racing world.

In 1995 the Conservative Home Secretary Michael Howard ruled out privatisation because it "might put at risk the contribution which the Tote makes to racing".

But last month the City accountants KPMG strongly recommended privatisation in a report on the various options for the future of the Tote.

Publication of the enquiry's findings was delayed because the Tote has recently been involved in a bid to buy the Coral chain of betting shops from Ladbroke.

The Tote's pounds 375m bid for the Coral bookmaking chain failed last month after it was trumped by a higher bid from Morgan Grenfell Private Equity, the venture capital arm of Deutsche Bank, which paid pounds 390m for the 827 betting shops.

The loss was a bitter blow to the Tote which was hoping to move into a bigger league to compete with privately owned betting shop chains such as Ladbroke.

The Tote intends to pursue plans to expand its off-course betting shop chain. It is in talks with several smaller bookmakers with around 100 shops each about possible takeovers.

"We have other options available to us which we are pursuing," said a source at the Tote. "Although we have been concentrating our energy on Coral, we have kept other options warm."

Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
A poster by Durham Constabulary
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
Emily McDowell Card that reads:
artCancer survivor Emily McDowell kicks back at the clichés
footballShirt then goes on sale on Gumtree
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvBadalamenti on board for third series
Life and Style
Standing room only: the terraces at Villa Park in 1935
Ben Stokes celebrates with his team mates after bowling Brendon McCullum
sportEngland vs New Zealand report
Amal Clooney has joined the legal team defending 'The Hooden Men'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine