Struggle for Tote hit by 'dirty tricks'

By Sarah Bridge for The Mail on Sunday
Updated: 06:55 EDT, 13 February 2011

The battle for the Tote is threatening to turn sour amid accusations of dirty tricks and misleading information as the sale process reaches its final stages.

Rumours: Gala Coral denied the suggestion it has dropped out of the race

Just a handful of players are left in the running for the State-owned bookmaker, which has been put up for sale by the Government.

Rumours swept the industry last week that Gala Coral, thought to have been one of the frontrunners in the process, had dropped out.

However, sources close to Gala, Europe's biggest gambling company, said that such a suggestion was 'totally untrue' and that the company was 'very serious' about buying the Tote.

One source said there was a belief among those involved in the process that its bid was being undermined by people in the Tote camp who feared that their jobs might come under threat if Gala, thought to be one of the highest bidders, proved to be successful.

However, sources close to the Tote dismissed the suggestion.

One said: 'The Tote management are not sophisticated enough to play those kind of games.'

The source added that the false rumours were more likely to have been put about by one of the parties that failed to make it to the second round and wanted to see the process disrupted.

The remaining parties are understood to be Gala Coral, Betfred, the Reuben Brothers and a team led by British Airways chairman Martin Broughton. In addition, a proposal has been put forward by the Racing Foundation headed by Tote executives Mike Smith and Trevor Beaumont.

Broughton's company, Sports Investment Partners, is thought to be interested in linking up with bidders that failed to make it through to the second round.

Unsuccessful bidders are thought to include Andy Stewart, the founder of Cenkos Securities, former Ladbrokes chief executive Chris Bell, Irish bookmaker Paddy Power and technology company Sportech, but they could all rejoin the race as part of another consortium.

'There is a lot of behind the scenes jostling going on,' said a source.

Meanwhile, an announcement on the Horseracing Levy is expected to be made this week by Culture Secretary Jeremy Hunt.

And elsewhere, the process of allocating new casino licences under the Gambling Act 2005 is facing severe criticism.

It has emerged that of the 16 licences up for grabs, only eight are in the process of being allocated, three councils have yet to start the consultation process and of those going through, question marks have arisen over several of them.

Only one licence has been settled - in Kingston-upon-Hull earlier this month - but now that decision is being questioned. It turns out there was only one bidder, Apollo Management, which has no experience of running a casino.

Apollo is also bidding in Newham, east London, and already plans to sell on this licence if it is successful.

The tender process in Scarborough, North Yorkshire, is also in danger of being derailed because one bidder has launched a legal appeal, which has halted the process.

In Middlesbrough there is confusion as one of the bidders, Aspers, is doing so through a property company rather than its casino company and Newham Council's final decision is likely to be challenged due to a succession of problems with the tender process.

'The whole thing is a mess,' said one industry insider.