19 May 2011 Pre-2014 Releases

Throughout this process Racing has sought to engage with both Government and any prospective bidder for the Tote. The Tote and Racing have enjoyed an eighty year partnership together: the Tote was largely set up by Racing, and exists for Racing. The sport has always received any profits generated by the Tote, and helped it to grow in to the modern betting business it represents today.

Following contrasting discussions with the two remaining parties in the process, last week Racing wrote to Government to express our support and clear preference for the Sports Investment Partners (SIP) bid, believing it to clearly satisfy all of Government’s stated criteria and represent the best solution for Racing, with binding arrangements for the continuation of the annual revenue stream, equity participation, board representation and the sport remaining at the heart of the business strategy in a true corporate partnership.

We have engaged in further discussions this week with both SIP and Betfred. They have all been cordial and constructive throughout. And we have today written to Government to explain that the balance of our view has not altered as a result of these most recent discussions, and to express our unequivocal preference for the offer presented and guaranteed by SIP.

Our assessment on behalf of Racing has involved four factors:
– Guaranteed income;
– The nature of the relationship offered to Racing;
– Governance; and
– Potential upside

The SIP bid is better for the sport on each of these points, and its commitment of annual payments is a firm one in perpetuity whereas Betfred’s guarantee applies solely for one year, despite public statements to the contrary.

Further, our analysis clearly shows that SIP delivers a higher return to the taxpayer – one of Government’s key criteria. It is also demonstrably the best solution for the Tote’s employees, and Racing has been heartened in recent days by the political support, across the parties, in Parliament for SIP and Racing’s support of its bid.

We respect Betfred’s bid, and Fred Done’s desire to grow his business and increase further his presence on the British High Street. Racing has a number of existing commercial deals in place with Betfred, as it does with every other British betting operator, and it is committed to continuing and strengthening these in the coming years.

But the Tote is and should be different. Any sale would grant a monopoly on pool betting on our product. We do not wish to see what is currently a stakeholder relationship, operating right across the sport and in particular at all our sixty racecourses and a key attraction for racegoers, turned irrevocably into one of a customer/supplier. SIP’s financial details satisfy Government’s criteria and provide more certainty to Racing, but just as importantly as this its bid ensures a continuation of the principles behind the Tote.