Horse Racing Ireland (HRI) is examining the option of selling off all or part of Tote Ireland to private interests.
The State licensed tote has been in operation for almost 90 years, with Tote Ireland a wholly-owned subsidiary of HRI, Irish racing’s semi-State ruling body, and all profits reinvested in the sport.
However, tote turnover has been in freefall in recent years, struggling in a radically changed betting landscape dominated by online firms and exchanges.
Last year total tote betting dropped by 33.3 per cent to €69.2 million. A lot of that was due to a decision by the Israeli government to ban betting into pools but on-course turnover also fell, by 7.7 per cent to just €10.7 million.
In the first half of 2019, tote turnover overall fell 11.7 per cent to €28.6 million. On course betting increased slightly, but off-course international pools generated just €2.6 million, down 16.1 per cent. Off-course Irish pool betting fell 13.7 per cent to €22.1 million.
"If we continue to operate the way it is it will struggle going forward with such a small and competitive market involving bookmakers online and exchanges," HRI's chief executive Brian Kavanagh said on Sunday.
An extensive review of the tote is currently taking place, and will be presented to the HRI board at its next meeting on December 16th. Officials have already been in discussions with third parties.
“We’ve been looking at the tote for some time, and the board has asked us to bring options back to them. If you look at tote business globally, particularly in countries where there’s no monopoly, the on-course business is suffering the same way as on-course bookmaking is trending.
“It looks like there’s move towards consolidation in totes, bigger international pools and stuff like that. They’re some of the options that are under consideration,” said Kavanagh.
Options
The HRI boss said the current review was focused more on long-term strategy rather than specific negotiations with individual companies. He would not be drawn on whether any potential sale would be for the entire entity or a percentage.
“[That is] pre-empting discussions, but all options are being considered. The tote is not specifically HRI’s to sell. It operates on the basis of a licence issued every seven years by the government, and HRI has the technology and the people and the brand product.
“Without both of those you don’t have a tote. You need to have a licence from the government, and you need pool betting technology and systems,” he added.
No change can be made until the licence is due for renewal in April of 2021.
The British tote, which was founded by Winston Churchill in 1928, entered private ownership in 2011 when it was bought from the government by the Betfred firm.
After that tote operations in Britain diversified further, including with three racecourses – Ascot, Chester and Bangor – operating their own Totalisator.
However, last month a new umbrella UK Tote Group concluded a deal which valued the tote at over £100 million.
Irish market
The Irish market is significantly smaller, but the need to compete internationally is one of the elements behind HRI examining if it should relinquish its 100 per cent ownership.
“I don’t want to pre-empt anything, but you would have access to capital, access to technology, access to international markets; all these are issues that other parties could bring to the table in a stronger way.
“If you look at global tote competition, Tote Ireland is a very small element within the context of totes that operate in other countries,” Kavanagh said.
