Private sale of Tote would be catastrophic for racing - Dixon; 'We're working together to keep Tote in racing': But Hills boss seeks review of competition laws.
THE chairman of the Horsemen's Group yesterday warned any sale of the Tote to the private sector would be "catastrophic" for racing as bookmaker William Hill called for a review of Britain's competition laws that preclude it from the bidding process.
Paul Dixon insisted securing the future of the state-owned bookmaker was vital for the sport, with a racing trust one of the options under consideration.
On Wednesday John Penrose, the minister responsible for gambling, launched a timetable to "set a value" for Britain's pool betting monopoly, and a team of accountants and lawyers, working for the government's advisers, Lazards, have taken up residence at the Tote's Wigan headquarters in preparation for the start of an "open market process" in November.
Although a pounds 320 million bid to take over the Tote, tabled by a racing consortium together with the management, failed in 2008, Dixon is doubly determined that a united approach by the industry is successful this time.
He said: "Racing is working closely with the Tote to come to a solution so that the Tote stays w i t h i n r a c i n g. W h a t t h e government has done is set the clock ticking on getting the future of the Tote resolved, and we have a diary date in mid-October to formalise our plans. We're looking at all the options, one of which is a racing trust idea including racing and the Tote. "The combined racing unit, that's the Horsemen's Group, BHA and the racecourses, are all onside over this. We're adamant the Tote must stay within racing, and are working actively together.
"It would be catastrophic for racing if the Tote was sold outside. With the levy declining, the Tote is the only stable thing within racing and it is something the sport has relied on, not only through sponsorship but all its profit goes back into the sport." Existing competition laws in Britain prevent William Hill and Ladbrokes from entering any auction to buy the Tote, although the emergence of online and exchange companies has seen the market widen while the regulations remain fixed. Hills chief executive Ralph Topping said: "We would be very interested in looking at any opportunity to expand our UK retail footprint through acquisition, including the sale of the Tote. "To ensure this is truly an 'open market' sale, we believe the Office of Fair Trading needs to revisit the archaic competition tests which have looked at the market in terms of betting shops - a true market is a global one that includes online and betting exchanges. "We would be disappointed if the 'open market' sale was burdened with any onerous preconditions which might reduce the sale value of the Tote." Speaking from first-hand experience, former Tote chairman Peter Jones said that although selling the Tote would appear simple, competing interest groups both inside government and outside make that belief illusory. "My first thought is here we go again," said Jones yesterday. "The very fact there are three government departments involved is a complication, the Treasury having one set of objectives - probably maximising revenues - and the DCMS and Business maybe having different agendas.
"Then of course there is the Tote, and its people, and the bookmakers have constantly run interference on the sale of the Tote. "It is obviously going through a valuation process - this will be the third or fourth time that has happened. I think the underlying question is what money is actually available in the market in today's conditions and [owner] Andy Stewart's comments are quite interesting - he's a great friend of racing and if he could be involved that would be a significant boost.
"I think racing itself would prefer the whole thing to stay within racing, possibly with a racing trust, but that's got its complications as well in the sense the government, I think, will want to have some money out of this, and I believe there is a lot of midnight oil to be burnt between now and the time any real decision emerges." Jones added: "Certainly the poolbetting side of the Tote is becoming an integral part of racing because at long last the racing product is being sold internationally with both the pool and pictures, and that is generating a growing revenue stream that could be very significant into the future. "That would be severely jeopardised by a sale to bookmakers so I think the minimum racing objective ought to be to hold on to the pool side of the business, and that might work as it is the part that is of least interest to the bookmakers, who are really most interested in the shops. It could be a quantum leap for a couple of organisations or a foothold in this market for an international firm.
" Lord Lipsey, a former Tote director who chaired the shadow Tote Trust before the government pulled the plug on the sale two years ago, said: "It's clearly vital that racing gets its fair share of the proceeds of any sale. I am sure racing wants to keep the Tote in-house, but I don't know whether the government will wish to give priority to that depending on who makes the best offer. "But however the mechanics work, the crucial thing is that racing gets a share of the cash and not, as I think is a danger, that it all goes to pay off the budget deficit."
Place your bets: the race for the Tote still has a long way to go
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|Publication:||The Racing Post (London, England)|
|Date:||Sep 17, 2010|
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