Job losses at Tote Ireland as UK Tote signs deal to operate off-course business

The Tote is to take over the operation of the off-course business of Tote Ireland in a major seven-year alliance designed to breathe life into the latter's pool betting ambitions - but with job losses one of the outcomes.

The deal is to begin on January 1 following what have been described as "extensive negotiations over a number of months" between HRI, Tote Ireland and the UK Tote Group.

At its heart is an arrangement for the UK Tote Group to control Tote Ireland's off-course business, allowing Tote Ireland to “build a stronger and more agile on-course presence in Ireland”. In recent years, its on-course and off-course revenues have collapsed, with the loss of Israeli betting into the pool in 2018 a major setback.

Tote Ireland’s total betting revenues in 2019, as reported in its fact book, came to €55.5 million, a massive 43 per cent decline on a figure of €97.8m two years earlier. Last year’s off-course trade came to almost €45m, a 48 per cent decline on the €86m of business done in 2017.

The move was born of a need to arrest that decline, and HRI’s review of the subsidiary had also explored a full or partial sale. This option avoids that, but it means there will be job losses.

HRI chief executive Brian Kavanagh said: “Tote Ireland has struggled in recent years as the betting market has changed significantly and a small Tote like ours does not have access to funds or capital to invest in product development or technology, so we sat down with UK Tote group some months back and realised there were a lot of synergies in this. They were attracted by the Irish racing product and its marketability internationally and we managed to complete this arrangement.”

He added: “Tote Ireland will remain a 100 per cent owned subsidiary of Horse Racing Ireland and will continue to operate the on-course side of the business, but as a slightly newer model particularly in terms of technology, but the off-course side of it and particularly the international distribution will be taken on by the UK Tote Group. It's a good development.”

Confirming imminent job losses, Kavanagh added: “There will be restructuring. We will engage with the staff over the coming weeks and work from there. Tote Ireland will be a different sort of company next year, it could not continue the way it is, and unfortunately it will lead to some job losses.”

Kavanagh described the venture as a commercial partnership, rather than a sale or a takeover. “Commercial partnership or alliance reflects it,” he said of the nature of the deal. “They have the sort of expertise we need in terms of opening up international markets whereas we have the local knowledge in terms of the Irish racing programme among other things.”

Brian Kavanagh: confident that crowds will be present at Irish Champions Weekend and ListowelCredit: Patrick McCann (racingpost.com/photos)

Asked if such an arrangement reflected poorly on HRI and Tote Ireland management, Kavanagh replied: “I think it reflects reality. If you look at what's happened in the betting market globally, it's not like a few years ago when you had the big five bookmakers.

“Paddy Power and Betfair have merged, Corals and Ladbrokes have merged and there is talk of further consolidation within that market.

"That is typical of the betting market generally. And if you look at Totes in general, it is very unusual to see a small Tote like ours surviving on its own. I see it very much as an opportunity rather than a threat.

"There is no doubt that if we had not have taken action like this that the future of Tote Ireland would've been in question. We have various projections of how profitable this will make Tote Ireland, but in the last year or so, it had been at break-even slipping into loss-making territory and we obviously hope this alliance can change that.”

Alex Frost, chief executive of the UK Tote Group, said of the deal: “We will work with the Tote Ireland team to bring innovation and creative thinking to how pool betting is presented to racing fans, both on course and through off-course digital channels.

"We have already made great strides since acquiring the UK Tote six months ago, including the launch of a new website, the return of Tote Ten to Follow and growth in significant international partnerships. There remains much work to do but together we have great people with the necessary skills, resources and determination to ensure both Tote Ireland and the UK Tote have a bright future.”

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