Britbet and Tote agree £50m pool-betting deal

The Tote and one-time rival Britbet have joined forces in a £50m agreement which Arena Racing Company chief executive Martin Cruddace described as a "landmark deal for British racing".

The seven-year deal between Britbet, the pool-betting project put together by 55 of Britain's racecourses, and the Tote consortium made up of Betfred and their partners Alizeti means that the sport will avoid the damage caused by having two competing totes diluting liquidity following the opening up of the pool betting market in July.

Alex Frost, the chief executive of Alizeti which owns a 25 per cent stake in the Tote, said the agreement was a "very important step" in revitalising the Tote and helping secure British racing's finances for "generations to come".

Britbet's partner racecourses are set to receive at least £50m over the course of the next seven years.

The sport received £88m in direct contributions from Betfred in the seven years after the bookmaker bought the Tote in 2011, but they included sponsorship of around 700 races a year amounting to close to £6m.

Under the agreement, the Tote brand will continue to operate on Britbet's 55 partner tracks, which include those under the Arena Racing Company (Arc) and Jockey Club banners along with the likes of Goodwood, Newbury and York.

Ascot launched their own pool betting operation AscotBet in partnership with the Tote in July and they will be included in the single pool as well, as will Chelmsford.

Britbet will manage all operations across their 55 partner racecourses while the Tote consortium will continue to develop the Tote online and in betting shops as well as being responsible for the digital offering and marketing of the Tote.

A steering group with representatives of the three parties will oversee operations.

Betfred founder Fred DoneCredit: Edward Whitaker

Betfred founder Fred Done said: "This deal builds on the hard work and achievements of the Betfred team in the seven years of our ownership of the Tote. We look forward to continuing this work as part of a new era for the Tote alongside our existing partnership with Ascot."

Britbet chairman Neil Goulden said the deal realised the aim of maximising returns from pool betting for the 55 courses involved.

He said: "We now look forward to working with the Tote consortium to deliver the innovation and investment that will allow pool betting to flourish and, in turn, serve the sport we love.

"The rollout of our new technology across the 55 racecourses along with the operational control we have been exercising since July 13 remains central to the Britbet vision. This agreement now gives us scope to deliver an even richer experience for our racecourse customers."

Talks between the two sides have been taking place since a standstill agreement was reached in June, an arrangement which was due to expire at the end of October.

Jockey Club group chief executive Simon BazalgetteCredit: Edward Whitaker

Jockey Club group chief executive Simon Bazalgette said the discussions with Frost's team had been collaborative, adding: "We are very pleased to support this deal on the basis that Alizeti’s approach involves significant and vital investment in the Tote, designed to grow pool betting and its returns for our sport."

His counterpart at Arc, Martin Cruddace, welcomed the deal, saying: "We are committed to developing a strong and engaging pool-betting product that will be attractive to our customers. Equally, it will allow us to maximise the opportunities that a strong pool-betting operation offers British racing.

"This is a landmark deal for British racing and we look forward to working with our colleagues at the Jockey Club, the other Britbet stakeholders, Alizeti and, of course, the Tote to build on this collaborative approach.

"Today represents a significant step forward for British racing, and I would like to thank all involved for working together to make it possible."

Alex Frost: chief executive of Alizeti

Attention will now turn to when Alizeti will be able to carry out its ambition of buying the Tote in full.

It is understood that will be a priority in 2019, along with work on improving value for customers through reduced deductions.

Its chief executive Alex Frost said: "We are committed to being part of helping secure British racing's finances for generations to come through a revitalised Tote.

Read industry editor's Bill Barber's view on the new deal

"This deal is another very important step forward in enabling this to happen and follows on from the Tote's existing partnership with Ascot, ensuring the sport now has a united approach to pool betting."

Ascot's chief executive Guy Henderson was another to hail the agreement.

"It is tremendous news that Britain will operate one single pool, benefitting from the expertise, experience and international relationships of the Tote," he said.

Also welcoming the deal was outgoing BHA chairman Steve Harman.

"I'm delighted that an agreement has been reached," he said. "This is a key step in showing Westminster and others that racing can attract new investment and can develop a powerful global Tote product.

"This is a huge step for the future finances of the sport and will also help further development of the levy."

There was controversy earlier this year over Harman's meetings with Frost at the Cheltenham Festival in March which led to accusations of a conflict of interest.

Although Harman was cleared of any wrongdoing on that score he is leaving his position in November, several months earlier than planned.

Chester and Bangor will continue to offer their own in-house betting operation and are not part of the deal.

Tote deal: Your questions answered

What is the Tote announcement about?

When Betfred bought the Tote in 2011 they received a seven-year exclusive licence to run pool betting on British racing. That expired in July when Britbet, representing 55 racecourses, was due to launch a rival operation. That was put on hold so the two sides – which now include Betfred's new partners in the Tote Alizeti – could enter talks about working together, discussions which have concluded successfully with this agreement.

What does it mean for punters?

The Tote will remain on the 55 Britbet courses along with Chelmsford and racegoers will initially see little difference, although new equipment is being rolled out across those tracks. Reduced deductions and £1 million pools have been promised by Alizeti further down the line.

What will it mean for racing?

The 55 Britbet racecourses are set to receive at least £50m over the course of the next seven years. On top of that Alizeti has offered additional benefits and sponsorship including the proposed payment of a "double levy" to racing.

What happens next?

The next stage of the process will be talks between Alizeti – who are a group of investors claiming the support of leading figures across racing – and Betfred about a buyout of the Tote. Alizeti currently have a 25 per cent stake in the Tote with an option to buy the operation in its entirety within three to five years. Alizeti will be looking to bring forward that timetable.

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