Tote sell-off sends shockwave through racing

THE TOTE, the state-owned betting organisation set up by Winston Churchill in 1929 to protect the public from illegal bookmakers and to channel funds into racing, is to be sold off.

The announcement yesterday of the Labour government's first privatisation, made in the House of Commons by the Home Secretary, Jack Straw, follows years of speculation about the Tote's future and sent ripples of anxiety through the horseracing industry.

The Tote ploughs most of its profits back into racing; last year it handed over pounds 10.2m of its pounds 12m earnings. The fear is that privatisation will deprive the industry of a key source of income.

Punters were also dismayed about plans to sell off a ubiquitous fixture of the racing world. There is sentimental attachment to the Tote, which operates a pool-betting business at racecourses around the country, as well as 250 high-street bookmakers.

The decision to privatise the Tote, estimated to be worth pounds 150m, is a victory for the Chancellor, Gordon Brown, over the Foreign Secretary, Robin Cook, who is a keen racing fan.

When the idea was floated by Treasury aides before the general election, it was firmly quashed by Mr Cook, who declared: "There will be no proposal by Labour to sell the Tote. I can authoritatively put down the curtain on this story."

In a written answer yesterday, Mr Straw said that no decision had been made about the method of sale and a sale to the industry had not been ruled out. But he said that the Tote's status as a public body had become "anomalous", and the Government had accepted the recommendation of a joint review by the Home Office, the Treasury and the Tote.

The decision was welcomed by the Tote itself and was described by George Howarth, the Home Office minister, as "removing long-standing uncertainty about the future status of the Tote".

However, Alan Beith, the Liberal Democrat home affairs spokesman, accused Mr Straw of "treating the Tote like a doubtful horse in a selling plate". He criticised him for failing to give any assurance that the Tote would continue to support the industry. The review team, led by Peter Jones, the Tote's chairman, rejected the option of selling the Tote to the British Horseracing Board, the industry body, for a nominal sum.

The Horserace Totalisator Board, to give the Tote its full title, has an exclusive licence to run pool-betting at racecourses. This is the system where all bets go into one pot and the total stake is shared among the winners, in the style of the National Lottery.

The Tote, which also operates a credit-betting operation, was originally set up as a "safe haven" for punters, controlled by the state and beyond the reach of illegal off-course bookmakers. The aim was to channel funds from betting into the industry, putting racing - and particularly breeding - on a sounder financial footing.

After high-street betting shops were legalised in the 1960s, the Tote came under financial pressure. In 1972, the government stepped in to help, changing the law so that the Tote could accept bets at starting prices - the odds that prevail at the start of a race.

The Tote, which employs 630 full-time staff, makes three-quarters of its revenue from starting prices.

The Conservatives wanted to privatise the Tote but prevaricated, mainly because of opposition from the late Lord Wyatt, the former Tote chairman. In 1996, the then home secretary, Michael Howard, concluded that privatisation might jeopardise the industry.

Bookmakers were swift to react to the news yesterday. At Brighton races, Tattersalls bookmaker Ron Bolton said: "I don't think the sale ought to be to anyone outside racing, or to one of the big bookmakers like Ladbrokes. Why don't the Jockey Club buy it?"