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State Owned Bookmaker The Tote Sale on Hold

The fate of the British state-owned bookmaker firm The Tote has taken another twist in the long-running saga of its disposal. This week the government decided to put a hold on the planned sale of the company due to the poor economic conditions currently being experienced around the world.

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In a statement to the British Parliament, Minister for Sport Gerry Sutcliffe said: "I have now concluded that it is not appropriate to pursue a sale 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 conditions are likely to deliver value for the taxpayer and racing."
 
The latest setback comes after previous attempts to sell the business to the racing industry and a consortium backed by private equity fell through.
 
Sutcliffe paid tribute to the 4 000 staff at the company, which was established by Winston Churchill in 1928 and is the fourth largest bookie in the UK, saying: "The government would like to place on record again its warm appreciation of the loyalty and dedication of the Tote's staff whilst its future has been under consideration."
 
The disposal by the government of The Tote was one of the items on Labour's election manifesto in 2001, and has been in an out of the news headlines ever since. A sale appeared to be close to fruition last (2007) year, when a group of racecourse operators, racehorse owners and Tote management, with debt financing from Lloyds TSB bank, made a bid which subsequently failed.
 
This was followed, in April 2008 with the appointment by the government of investment bank Goldman Sachs to advise on its options for the enterprise, which had been estimated to be worth GBP 400 million. Sources later claimed that the investment bank had revalued the company, which has 529 betting outlets, down to between GBP 260 and 290 million.
 
Reuters reports that Minister Sutcliffe commented later: "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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