Deafening silence after Tote sale

Racing gave up on a judicial review because of the bigger funding prize

Why has racing’s reaction to Betfred’s purchase of the Tote been so muted? In a few short months, the industry has moved from vehement opposition, to talk of a judicial review, to grudging acceptance and now, in some quarters, supine acquiesce.

Once the writing was on the wall – and in some cases even before it was – racecourses were never going to rock the boat for fear of losing sponsorship. And, for the industry generally, it quickly become apparent that the idea of launching a judicial review did not sit comfortably with the industry’s most urgent need at this time – help from the government to get a new funding mechanism on the statute books.

The resulting decision that we should pull back from a judicial review does, nevertheless, still leave several ROA Council members smarting with anger and frustration, especially as the BHA had repeatedly assured us they would deliver the Tote to racing.

It is difficult to know where a judicial review might have taken us but, reading the Hansard reports relating to the parliamentary debates surrounding the Horserace Betting and Olympic Lottery Bill in 2003/4, leaves no doubt there was a firm intention at that time for the government of the day to transfer the Tote to a Racing Trust.

Yet somehow, after the so-called Enabling Act was passed to allow the government to privatise and then sell the Tote, successive governments in the intervening years have conveniently overlooked the commitments made in these debates.

Many MPs at the time were mindful of the danger that this process would not result in racing acquiring the Tote, among them the late Foreign Secretary Robin Cook. Indeed, Hansard tells us that during debates in the Commons and Lords seven years ago it was argued vociferously that the Bill should leave no doubt the Tote would be sold to racing.

But then, urged on by the betting industry, the spectre of a state aid challenge was raised and swiftly gained momentum, it soon becoming apparent that the government position had changed fundamentally.

ROA Council members have been left smarting with anger and frustration

We moved from having an assurance that racing would acquire the Tote through a Racing Trust, first for no consideration, then for no more than half the market value to a position where the full market value would have to be raised and the Tote would be sold to the highest bidder.

One of racing’s biggest miscalculations with regard to the Tote sale was to accept the whole business had to be sold as one entity. Easy to say with hindsight, but today’s outcome shows how we should have fought tooth and nail against this.

As things turned out, racing should have been content to acquire the Tote pool betting monopoly on its own. The value of the pool part of the business is still relatively small and it would certainly have been possible for racing to have raised the finance to acquire the pool without the shops and without any state aid concerns. As it is, the synergies available to any business with an existing betting shop estate were always going make the Tote a very attractive proposition for a company like Betfred – hence their willingness to pay the full market price.

The government should not be allowed to forget the blow they have dealt this industry and, equally, should be left in no doubt they owe British horseracing a cast iron pledge that they will hasten the establishment of a horserace betting right to replace the levy.

We must also know more about the £90m racing is due to receive from the Tote sale. When will we receive it and what strings will be attached to how it is spent?

Only when these issues are resolved should we accept the status quo. And only then might the deep concerns that racing has once more got it wrong in not pushing for a judicial review begin to dissipate.

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