Set up in 1928, the Tote operates Britain's pool betting system. It currently has about 540 betting shops and also maintains representatives at all racecourses in the UK.

A debate has raged for years over the Tote and now the argument may have reached the final chapter in its long history. The British government announced this week that it has rejected a bid from a horse racing consortium and is putting the company up for public sale. The fate of the Tote has been in the balance for the last three years, and the government's decision will not find favor with the racing industry. An earlier sales deal fell apart in 2006 due to the low price offered.

At that time, PricewaterhouseCoopers valued the Tote at some £400 million and the racing industry was invited to put together a bid on that basis. The response was an initial offer of £320 million which was rejected. After that the consortium agreed with Tote management and the private equity division of the Lloyds TSB bank to make another bid early in 2007.

However, this time the government was unhappy with the level of Lloyds TSB's involvement and the consortium was told to rework the plans, leading to a new bid being put forward last September. This is the bid which has now been rejected as well.

Current unstable economic conditions in the UK may impact on the price that the eventual purchaser is prepared to pay. Reuters now quotes estimates of between £200 and £300 million. Another option may follow the lines suggested by Paul Dixon, president of the Racehorse Owner's Association, who has proposed a plan to split the Tote between the horse racing industry and a willing industry partner.

Observers in the industry expect a wide range of companies and individuals to be interested in the Tote. Laws governing competition will probably rule out giants like Ladbrokes and William Hill but the privately owned Gala Coral has already offered to buy the business while BetFred and Paddy Power are also among the gambling firms expected to enter a bid.

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