Shareholders in the Tote are placing a fresh £20m wager on the company’s growth ambitions as it prepares to diversify into Britain’s vast football betting market next year.
Sky News has learnt that the UK Tote Group, which is owned by a consortium of high net worth investors, is raising £20m of new equity to accelerate a diversification away from its historic reliance on horse racing.
Gaming industry sources said on Friday that the fundraising had been completed in recent weeks and would provide a strong foundation for the Tote as the gambling industry continues its recovery from the coronavirus pandemic.
The Tote is understood to have performed strongly since the resumption of racing in June, aided by a new consumer-facing website and a number of international partnerships.
Insiders said the new capital from shareholders would be used to fund its expansion into football betting and to strengthen the company’s balance sheet.
It comes just over a year after Alizeti Capital, a privately owned vehicle, took full ownership of the Tote – one of the most famous names in the betting industry.
The Tote had, since 2011, been owned by Betfred, which bought the previously state-owned business for £265m.
In a sport riven by political conflicts, Alizeti has used its period of minority ownership to build support for its vision for the future of the Tote – and, by extension, for horseracing in the UK.
Positioning itself under the umbrella of Together for the Tote, Alizeti comprises a group of racehorse owners and breeders, and has enlisted support from leading trainers and jockeys, such as John Gosden OBE and Frankie Dettori.
The company’s proposed move into football will come amid a shake-up of the wider UK betting industry, with William Hill’s operations outside the US expected to change hands next year.
A Tote spokeswoman said: “As the UK Tote Group, we have made a long-term commitment to rejuvenating the Tote and increasing pool betting on British racing.
“Our ability to respond to new opportunities, beyond our initial acquisition of the business, remains a key priority and are grateful to our enormously supportive shareholders who share our ambitions for the Tote.”
The fundraising was entirely covered by existing investors, she said, enabling “investment into the core platform on which we offer our digital racing pools product, as well as being able to expand into other sports”.
“This will ensure the Tote can appeal to a broader base of sports fans who have not, as yet, chosen to bet with the Tote.
“This is an essential element to ensuring the further growth and success of the Tote and increasing the role it can play in supporting British racing.”
Among the Tote’s existing shareholders is Michael Spencer, the former ICAP chief and one-time Conservative Party treasurer.
It was set up partly at the instigation of Winston Churchill, who at the time was a racehorse-owning Chancellor of the Exchequer.
Since the most recent change of ownership, it has introduced a series of innovations, including a Tote guarantee that winning bets on UK and Irish racing will never pay out less than the industry Starting Price.
It has increased the number of World Pool days at Royal Ascot and British Champions Day, when the Tote pool liquidity with Hong Kong and other leading racing territories.
The Tote believes it can substantially grow its share of the UK betting market by investing in new technology during a period when high street bookmakers are facing growing regulatory and financial pressures.
The company is run by Alex Frost, a former Merrill Lynch trader.