Two recent events remind us it is now three years since the Tote was sold to the bookmaker Betfred. The first of these came with the government announcement that racing would receive a further £50 million, of a total of £80m, for the Racing Foundation, the charity specifically set up for the purpose of receiving, investing and distributing funds from the sale of the Tote.
This was then followed by a spectacular Scoop6 rollover, which, at the time of writing, has raced past the £10 million payout level and could easily end up at £15m – an extraordinary and exciting sum for a horseracing bet.
Both events suggest that Betfred is doing very nicely out of its purchase of the Tote. Fred Done’s company has paid off its debt for the Tote early and has kept to the various commitments it made to racing as part of the purchase agreement. It has even found the wherewithal to acquire an all-weather racecourse and it will be interesting to see how the re-named Chelmsford City (formerly Great Leighs) operates under its bookmaker ownership.
The good profitability attached to bets like the Scoop6 is one thing but they also produce huge PR benefits
Of course, the Betfred acquisition of the Tote had much more to do with Fred Done being able to acquire 517 betting shops than anything relating to the seven-year exclusive pool betting right, but it is fair to say that Betfred also appears to be doing rather well from the pool betting side of the business, as a 30% deduction from the Scoop6 pool would indicate.
It is against this background, with four of the seven years of the exclusive pool betting licence remaining, that there is a growing question mark hanging over the future of the Tote when the current exclusive licence agreement expires.
Racing must not cease to be involved because a racing charity has received £80m from the Tote sale. Any sense of gratitude must not be allowed to cloud the fact that it is the only benefit our industry has received from this sale. Nobody wants to go back to rehearsing all those arguments about the Tote not being the government’s to sell, but it is more than curiosity that causes me to raise these concerns.
On the current assumption the government of the day will no longer allow an exclusive licence, it leaves one guessing as to what the next step will be. Will they, for instance, instead issue licences to a number of fit and proper entities, for an appropriate fee, to allow them to operate pool betting in the UK?
As logical as this might sound, it would show a glaring lack of understanding of how pool betting works. Issuing multiple licences would devalue the product. Even as a monopoly, it has been difficult to make pool betting work in this country. Several companies undercutting each other would surely end in commercial suicide as each failed to achieve the necessary level of liquidity.
This is one of the reasons why British racing should now reignite its interest in the future of the Tote. In some ways the pool betting picture of the future is very different from the one of the last 50 years. The days when it was deemed essential to market Tote products through betting shops and racecourses are almost behind us. With so much betting now going online, we have reached an age where the Tote could be very successfully marketed through the internet, which offers infinite possibilities of building spectacular worldwide pools.
The recent Scoop6 bonanza again showed how Tote pools grow exponentially once you get into reasonably big figures. The good profitability attached to these so-called exotic bets is one thing but they also produce huge PR benefits.
All of this shows that, even if British racing plc can no longer hope to possess the exclusive licence for pool betting, we must be proactive to ensure the right decisions are made.