Threat to Britbet even before launch as conflict between Arc and RMG escalates

The planned racecourse pool betting operation Britbet is in danger of imploding before it has even launched after a major row erupted between the project's main shareholders.

Arena Racing Company has issued an ultimatum to those racecourses who are shareholders in Britbet and operate under the Racecourse Media Group umbrella, insisting they must end an arrangement with SIS under which they claimed they would have control of pictures and pool betting globally on horseracing content from RMG tracks, Ireland and Chelmsford.

The ultimatum represents the most serious indication so far of the anger felt by Arc's owners, the Reuben brothers, over RMG’s decision to choose SIS over Arc as its overseas partner, a move that has effectively collapsed GBI, in which Arc was the other main shareholder.

Arc alleges that this agreement, announced in January and which comes into effect in 2019, flouts the terms of a commitment given by Britbet shareholders to develop their own pool betting service for the international market for the benefit of British racing and not to participate in any other pool betting service.

A further complication

Unless RMG exits the deal with SIS, Arc says it could seek the expulsion of RMG's Britbet representatives from the Britbet project.

The details of the disagreement between Arc and RMG, in which Jockey Club Racecourses is the main driver, are contained in a letter from Arc chief executive Martin Cruddace, seen by the Racing Post, which has been sent to every racecourse that is an RMG shareholder and Britbet partner.

The row between its main shareholders is a further complication for Britbet, which has agreements with 54 tracks including those under the Jockey Club, Arena Racing Company and Scottish Racing banners, as well as Goodwood, Newbury and York, to run the racecourses' pool betting services from July this year, when the Betfred-owned Tote's exclusive seven-year licence to run pool betting expires.

Last month it emerged that Betfred boss Fred Done was close to selling a 25 per cent stake in the Tote to the Alizeti consortium as part of an investment that could total up to £150 million over the next five years. This would dwarf any resources at Britbet’s disposal.

In his letter, Cruddace cited a press release on the RMG/SIS partnership on Irish racing that stated the agreement would be extended "to encompass international pool betting", a move he says would "undermine the international business of the LLP [Britbet] and damage the business of other members of the LLP including Arc".

'It is simply unacceptable'

Arc claims that RMG's racecourses are in contravention of clause 24.1 of the Britbet agreement which stipulates that those involved with Britbet will not "participate in any pool betting product or arrangement . . . other than the pool betting arrangement' (i.e. the arrangement for the provision of services by Britbet).

Cruddace added: "It is simply unacceptable for our partners to be selling competing pool betting rights through RMG in what would appear to us to be a deliberate attempt to negatively impact the value of our rights and those of the independent tracks that are not part of RMG."

He continued: "Should you be unable or unwilling not to proceed with the proposed SIS transaction it will be Arc's view that each of the RMG members is guilty of a material default under clause 27.5 (f) of the agreement entitling the management board to expel that member from the LLP in accordance with clause 27.3(b) and the chairman (and another independent member of the management board) to categorise that member as a bad leaver."

Racecourses deemed ‘bad leavers’ would lose any cash they have put into Britbet, it is believed.

'A poor reflection'