This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
The Government confirmed in March that it was preparing to sell the Tote on the open market and had appointed Goldman Sachs to advise it. A further statement (click here
) from the Minister for Sport, Gerry Sutcliffe, whilst confirming the Government's intention to continue preparation for a sale, also contains the caveat that "the Government will need to be satisfied that it is right to proceed with the sale in the light of current market conditions". The statement goes on to say that the Government will be commissioning further work to be conducted during the Summer in preparation for a sale process being commenced in the Autumn. It then says, "This work will also provide further data on the company which would enable the Government and the Tote Board to consider how best to create further value inside the Tote if, in the light of market conditions, the Government decided in the Autumn not to proceed to a sale at that time".
So, yet again, the sale may not happen – this time because of the current economic climate meaning that the Government may not realise a sufficient price for the Tote. This is yet another embarrassment for the Government, given their previous rejection of the Racing Consortium's £400 million and £320 million bids.
A few days before Gerry Sutcliffe's latest statement, his predecessor, Richard Caborn, suggested yet another option. His proposal was that the Tote's betting shop estate is sold on the open market but that the pool business should be transferred to a racing trust which would receive the 50% of the proceeds of the sale of the betting shops and would run the pool betting service in partnership with racecourses. Not content with offering a solution to just one of racing's intractable problems, he also suggested that the trust could take over responsibility for the operation of a commercial replacement for the Levy.
Even if the sale process does commence in the Autumn, there are a number of other unresolved issues which, at the very least, could complicate the process including:
- how much of the sale proceeds will be returned to racing, who is "racing" and how can this be done in a manner compliant with state aid rules?
- will the Government separate the pool business from the betting shop estate and will they offer the betting shops in separate batches to ease the competition problems which potential bidders such as Ladbrokes and William Hill may otherwise face?
- will the Government require any commitment in relation to retention of the Tote's employees in Wigan?
- will the Government place any restriction on any part of the Tote's remote gambling operations being moved offshore?
- will the Government review the number of FOBTs allowed in betting shops?
- will the Horsemen's Group or another racing body seek to judicially review the Government's sale of the Tote?
- what arrangements will any buyer of the pool business need to have in place with racecourses?