Due to recent events, the government has announced it will not be selling off the Tote bookmakers, any time soon.  The state-run bookmaker was put up for sale, with Gala Coral and Racecourse Association amongst others showing interest in acquiring the long running horse racing betting service.

Gerry Sutcliffe, sports minister said in a statement to the House of Commons last week, “I have now concluded that it is not appropriate to pursue a stake in these market conditions.  I have therefore decided that the Tote should be retained in public ownership for the medium term, and brought to the market when the conditions are likely to deliver value for the taxpayer and racing.”

The Labour government made a policy commitment to sell off the Tote way back in its general election manifesto in 2001.  Although it was low on their list of priorities and it wasn’t until last year until the ball began rolling on the issue of privatising the Tote.  A bid was made by a consortium of the managers and employees of Tote to buy the business, but was rejected by the government as the £320 million offer was too low, as Goldman Sachs calculated the Tote’s market value at £400 million at least.

After this bid failed, the government officially announced the sale of the Tote in March this year.  Gala Coral announced they would be prepared to offer £405 million for Britain’s fourth largest bookmaker, after losing revenue from their casinos and bingo halls.  There was also speculation about Gala Coral teaming up with the racecourse Association to make a joint bid. The government though were stalling on the sale, as the credit crunch was already beginning to take effect and they indicated that the auction to buy Tote would begin in autumn 2008.

However, because of the financial banking crisis and the fact Britain is entering a recession, the government have been forced to take the issue of Tote privatisation off the agenda for the immediate future. 

There have been reports that because of recent economic conditions, Goldman Sachs have recently dropped the value of Tote from its 2007 value of £400 million to around £260 million to £290 million.

The Tote was established by Winston Churchill in 1928 and has 540 betting shops in the UK, as well as being the main betting provider at racecourses and dog tracks up and down the country.

News agency Reuters quoted the sports minister as saying later on after his statement that, “It is right that the Tote is now given time to grow the business so that any future sale will achieve maximum value.  In particular, I would expect the Tote and racing to continue to work closely together for the benefit of the sport and the punter.” 

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