The Tote is one of the most iconic names in British sports betting. The company revolutionised the way that punters were able to bet and even though they’ve been about since 1928, the format in which bets are placed has changed very little.
Before we dive into the history of The Tote, we wanted to briefly explain how the concept worked:
The tote is essentially pool betting. So, instead of placing a bet against the odds set by a bookmaker, you invest your money into a pool for any given market. If your bet is successful, then your winnings is a dividend of that entire pool, which will be based on the amount you invested.
The concept initially changed how punters bet on horse racing, but in more recent years its’ been expanded to include a host of other sports as well.
The early days
The Tote was founded, as mentioned in 1928, but what was unique about the concept is that it wasn’t run by your high street bookmaker, but instead by the government. The whole process was overseen by the then prime minister, Winston Churchill. The idea behind the concept was to create a safe betting environment for punters, in what was a pretty lawless industry back then.
The Tote was set up to work within local horse racing tracks. At the time a lot of bets were simply taken as match bet, with only 2 horses running in each race, often with trainers of the horse going head to head. The Tote offered a unique betting opportunity of pool betting and whilst the pool betting idea was something that had been successful previously, it was The Tote that really put it on the map.
He Racehorse Betting Control Board were the figureheads behind the brand and it was their job to ensure that The Tote was run fair and away from all the illegal off course bookmakers. As they already had the backing of the government, people were flocking to use this method of betting, which proved to be an almost instant success.
The first major meeting that they were involved in were at Newmarket and Carlisle on the 2nd July 1929. These were pretty much seen as test runs to see how they would cope and more importantly, if there was any interest, which there was!
In 1930 Tote Investors Limited was set up as an independent company to make sure that the welfare of both the company and that of horse racing was maintained for all Tote bets. They were described as “a group of gentlemen interested in the welfare of racing” and to be fair, managed to keep the integrity of what the Tote stood for pretty well.
The Tote was able to grow over the next 30 years or so until 1961. In this year the Betting Levy Act had been passed, which allowed bookmakers to legally open up high street betting shops. The Tote was still known as the Horserace Totalisator Board, but soon changed their name to the more familiar, The Tote, as they are still known today. It was their job to ensure that funds that came into The Tote were distributed back into the horse racing industry, which is one of the main reasons why so many passionate punters were keen to use this betting brand.
But, whilst bookmakers were opening up betting shops in every street corner they could find, The Tote were actually not allowed by government to follow suit. The idea was that it would ruin the integrity of what The Tote stood for and as a result, meant they limited exposure to just that of the race tracks and on-course betting facilities.
Tote finally opens high street shops
It was more than a decade later, in 1972, that the embargo to not allow them to open high street betting shops was lifted. This came about after great pressure from members of the board and also punters who were enjoying using the brand. Whilst still government run, the powers that be were unable to argue against the huge rise in fortune that companies such as William Hill had been able to achieve in that time from high street stores. To put in plain English, they wanted a piece of the action!
Over the following 12 months the ability to offer betting markets to a much broader range of punters and not solely horse racing bettors, opened the Tote to offering markets on a host of other sports. They were now no longer seen as an extension of the government, but a bookmaker in their own right. Over the next decade the company soared in popularity and became one of the biggest in the UK, opening up hundreds of bookmakers and gaining access to dozens of racetracks around the country.
One of the things that had lead the Tote to so much success was innovation. The whole concept of how they worked was unique at one point and in 1986 they were able to continue this trend by offering live coverage of sports within their stores.
Deal struck with other retailers to run the Tote within their betting shops
1992 saw another break through for the company. They gained rights to offer their product within other high street betting shops. As there was no conflict of interests here due to other bookies not offering pool betting, for a small percentage of takings, other bookmakers saw it as a great opportunity to make more money and for the Tote, an even bigger audience had been accessed. This section of the company was known as Tote Direct and was set up in stores such as Ladbrokes, Coral, William Hill and a host other bookies of that time.
By 1999 the Tote were one of the biggest bookmakers in the world. They were easily the biggest parimutual betting company and had very little competition in this department. But, it was their dedication to horse racing and their need to invest back into the sport that had made them successful that was allowing them to stand out from the crowd.
Channel 4 decided that this is something that could work well with their ever developing converge of horse racing. They teamed up with The Tote to allow them to essentially advertise their bets within their racing coverage. The coverage allowed them to create different formats of their pool betting, such as the Scoop6, requiring punters to pick the winners of all 6 races from a single meeting in exchange for a life changing sum of money, which often exceeded the £1million mark. In turn, it was this exact bet that crowned the first horse racing betting millionaire!
One of things that famed the company was the fact that it was government run, which gave a certain level of assurance to punters. But, throughout the years and be known to very few, the Tote was actually lined up to go private on several occasions.
The first attempt was in 1989 when Conservative government set about to sell The Tote to Lloyds Bank. But, this was met with massive objections from many within the racing community and as a result, the bank withdrew their offer feeling that a change of hands would have tainted the reputation that stood before them.
It wasn’t until 1997 that the idea of privatisation started to rear its ugly head again, this time under Labour control. It was Jack Straw who was fronting the proposal and to do so even went as far as privatising the Horserace Betting and Olympic Lottery Act of 2004. This would in turn allow the Tote to be turned into a Limited company, which would then aid in the bidding process to eventually sell the brand.
Attempts for sale in 2006, 2008, 2009 and 2010 were all made to sell the company and privatise the Tote. Several reasons including private equity funding and the ever-changing financial global sector forced rethinks, before deals eventually, again, broke down.
The bidding process
The ball didn’t really get rolling with any momentum again until 2011, this time under a coalition government. It was clear that they were ready to clear their books of any affiliation with Tote and relaxed many rules that they had previously enforced in regards to the sale, such as private equity money.
They allowed 18 different bidders to apply for full control and the sale of Tote. A number of rounds were made, with each culling a few of the potential buyers. The government were keen for a sale, but knew that given everything that the Tote stood for, they were obliged to find the right buyer, which was easier said than done.
The final shortcut was left to Betfred, David and Simon Ruben, Gala Coral Group, Stan James and Sports Investment Partners. The latter actually being made up of existing management from within the Tote and seen by many to be the favourite to take the reins.
The winning bid was eventually announced by then culture secretary, Jeremy Hunt, on 3rd June 2011 as Betfred, in a deal reportedly worth around £265million.
Why did Betfred want the Tote so badly?
A key thing to remember in all this is that in 2007 the government actually turned down a bid worth in the region of £400million, citing that they believed it was worth more, which was probably fair.
The financial crash had a huge affect on the value of the brand so at £265million you could say that it offered good value given that Betfred would pick up access to 60 racecourses throughout the UK, 517 high street stores to accompany the 800+ strong they already owned, plus one of the biggest and most respected brands in the industry.
Money aside, you have to admit that Betfred were a pretty good match. Their own outfit, run by founder Fred Done, has been about since the 1960’s and have worked up from a one-man-band to a multi-million pound company. They were well known for already being established in the horse racing industry, with Done personally giving donations to many charities and trusts related to the sport.
As part of the deal, £90 million was given to the horse racing industry, with another £90 million going to the taxpayer. Betfred has also pledged to commit £11 million in the first year to horse racing and then a further £9million per year over the next 6 years.
The future of The Tote…
The original license that was signed by Betfred gave them exclusive access to all 60 UK racecourses up until 2018. In this period they could go unchallenged in terms of pool betting within these enclosures and essentially have the monopoly within the industry.
It’s fair to say that since the purchase of the Tote, relations between Betfred and the horse racing community have become strained. People within the industry suggest that Betfred aren’t doing enough to pump much needed funds into the sport and Done himself has stated he would walk away from the sport altogether after losing out on naming rights of the Cheltenham Gold Cup.
As a result, a rival company run by the Jockey Club and the Arena Racing Company (ARC) are planning on tabling a bid to take over the full rights of pool betting within racetracks. The deal has been designed to invest more funds into the industry and has already been backed by 56 of the 60 racecourses throughout the UK. Neil Goulden, former Gala Coral Chairman, is rumoured to be spearheading the project.