Britain’s bookmakers have warned they will mount a legal challenge against any decision by the Government to sell the Tote to the racing industry „on the cheap“.
The racing consortium, which includes Tote management and staff, the Racecourse Association and the Racehorse Owners Association, slashed its latest bid for the bookmaker last week from GBP 400m to GBP 320m, citing jittery credit markets. The Government rejected the former offer because it was unhappy about the structure of the deal, which was supported by GBP 350m of debt from Lloyds TSB and a GBP 50m „payment-in-kind“ note.
Although the Government has a manifesto pledge to sell the Tote back to the industry, it knows any deal will come under scrutiny by European authorities to ensure it reflects the Tote’s „full valuation“ and does not contravene competition rules concerning state aid.
Other high street bookmakers would rather see the Tote sold to another bidder or broken up. They are concerned that if the Tote fell into the hands of the racing consortium, it would achieve a protected dominant position in the market in terms of TV and other media rights.
Ian Spearing, the corporate strategy and development director at William Hill, said: „If the Tote is sold to [the racing consortium] for what we consider to be a subsidised price, we would challenge the deal as illegal state aid. It must be sold at full market value, which we consider to be GBP 400m, or else others should have the chance to bid for the assets.“
A Ladbrokes spokesman said: „Taking a legal challenge to Brussels is something we would consider if a sale at a knockdown price was confirmed.“ Another gaming industry source said the latest bid for the Tote was „certainly on Brussels‘ radar“.
Gaming company Gala Coral has already indicated it would be willing to pay GBP 405m for the Tote should the Government open the sale up to the rest of the market.
A Government spokesman said: „We are considering the consortium’s bid against the criteria we have set for the sale.“