The Tote, Origins, History and Future

TotepoolIf you’ve read the other pages on this website then you’ll have realised by now just how fascinating the betting industry is. There are so many different facets to it that even those that are opposed to it would find something that they appreciate, if only they’d be willing to look. From the histories of some of the country’s oldest bookmakers through to the development of the industry into the world of computing and online betting, there is a rich history associated with gambling that is sure to interest everyone that has even a passing interest in it all. The deeper you dig the more you discover and the more discover the more you’ll likely find yourself wanting to learn.

Yet one of the most intriguing aspects of Britain’s fascination with the bookmaking and betting industry is the development of the Tote. It started as a way of the government earning money from betting and managing to maintain some sort of regulation on a previously unregulated industry before developing into one of the biggest specific-sport bookies in the market. Here you’ll be able to discover more about why it was felt necessary to create a government-run bookmaker in the first place, plus find out how it’s developed since it launched for the first time between the two World Wars. We’ll also have a look at where the Tote is going, to see if there’s any future in one of the oldest official form of betting in the country.

Origins Of The Tote

horses jumping a fence at the aintree grand national

In the wake of the First World War, the government realised that a lot more people than they might have expected were placing bets on horse racing. This wasn’t a problem in and of itself, with bookmakers having pitches on racecourses up and down the country. The issue came about because these people weren’t betting with these licensed bookies and were instead turning to illegal, off-course bookmakers. This allowed unscrupulous characters to make money from the horse racing industry when they shouldn’t have been, taking it away from both the government and the industry itself.

As is the case with most things in life, as soon as the government realised that it was missing out on money that it could have been earning for itself it sprang into action. In 1928 the Racecourse Betting Act was passed in parliament, the result of which was the establishment of the The Racehorse Betting Control Board. This new board was appointed and controlled by the government, meaning that it was a far more trustworthy alternative to the backstreet illegal bookies that punters had grown used to using. Established as a statutory corporation, part of the aim of the The Racehorse Betting Control Board was to make sure money made from it went back into the horse racing industry.

Interestingly, the Act was passed through parliament in 1928 but it didn’t actually come into affect until July of 1929. That was when the Tote, as it would later become known, went live for the first time on two British racecourses; namely both Carlisle and Newmarket. There was still plenty of interest in betting off-course, so in 1930 a company named Tote Investors Limited was set-up, ensuring that some of the money bet in that manner was still going into the Tote pool. It wasn’t anything to do with the official Tote until it was bought by the government in 1962.

What Is The Tote?

totepool betting stand at cheltenham racecourse

It’s all very well and good telling you how the Tote came to be set up and how it has changed over the years, but if you don’t even know what it is then this will all be rather moot. Betting on the Tote involves betting in a pool, the technical term for which is parimutuel betting. Essentially, you place your bets and your stake goes into a ‘pool’ of money. The odds are dependent on how many people are betting, how much they’re betting and what they’re betting on. If you win then those things will also determine how great your payout is, as you’ll be taking a return from the pool and that money is dished out by dividing the number of winning bets by the amount in the pot, simple.

The Tote differs from traditional fixed-odds betting in numerous ways. For starters, the way that odds are set by bookmakers is far more about what they think than how the market’s going. The market dictates things for sure, but with the Tote the market explicitly outlines what the odds will be. The way that bookies make their money is different, too. They set the odds up in such a way that they always have an ‘edge’ that guarantees them a profit. The Tote, meanwhile, takes a cut of the pot and then divides the rest between the number of winning bets.  The less people who back your horse the more you will win.

This cut is the equivalent of the bookmaker’s edge and allows the Tote to make money regardless of how much money is bet on any given race. It is also removes from the pool before any winnings are calculated, though that’s not the sort of thing that you need to worry about considering that it all takes part behind the scenes. It’s just worth knowing so that when you get your payout you’ll be aware that it will be less the amount that the Tote has taken by way of payment. We’ll explain the various bets that you can place via the Tote later in this article.

The Horserace Totalisator Board

horserace betting levy boardFrom the point of its launch on racecourses in 1928, the Tote continued to be operated in much the same manner as was envisaged when it was first launched. Yet away from the racecourses of Britain the entire betting industry was undergoing a significant change. In 1961 the Betting Levy Act was introduced, allowing bookmakers to have high street shops for the first time. That didn’t apply to the Tote, but what was introduced as part of the new Act was a change of remit for the company and a change of name. Now the Racehorse Betting Control Board would be known as The Horserace Totalisator Board, earning itself the nickname of the Nanny (Nanny Goat = Tote).

The Act also introduced the Horserace Betting Levy Board, a statutory non-departmental public whose job was to collect a levy from the Tote that would in turn be redistributed throughout the rest of the horse racing industry. In 1963 another Act was introduced, this one called the Betting, Gaming and Lotteries Act. Since then until the modern day the Tote has been operated according to the rules set out in this second Act. This didn’t change the restrictions on running a betting shop that were put in place on the Tote in 1961, with that change not occurring until 1972 when the restrictions were relaxed a little.

Removal Of Restrictions In 1972

sign on an old totesport betting shop

Part of the reason why the restrictions put on the Tote were lifted at the start of the 1970s was that other bookmakers went from strength-to-strength and the government’s official bookie got somewhat left behind. As soon as the restrictions were lifted, however, it didn’t take long for it to catch up with its competitors in terms of popularity. In actuality, the fact that Horserace Totalisator Board was the only company in the United Kingdom that was officially allowed to take pool bets resulted in it becoming even more popular than fixed-odds companies with certain punters.

In 1992 an offshoot of the Tote was launched, named Tote Direct. This allowed straight bookies to take bets that would then be added to the Tote pools, meaning that bookmakers that followed the laws laid out by the numerous government Acts over the years could also take a type of bet that was forever growing in popularity. This in turn ensured that the Tote managed to get even bigger takings, resulting in the horse racing industry earning increased money thanks to the statutory levy that was still being collected by the Horserace Betting Levy Board.

Two big shifts in thinking occurred in the 1990s that also had an effect on the Tote. The first was the decision to allow bookies to be open in the evening, thereby increasing the amount of money that they made. The second was an official link-up between the Tote and Channel 4 Racing that happened in 1999. Suddenly a form of betting that was best-known to die-hard horse racing fans was discovered by a far wider, more mainstream audience. The link-up saw the introduction of a type of bet known as the Scoop6, where punters had to predict the winners of six different races that would be shown live on Channel 4.

This new ‘Scoop6’ bet truly caught the imagination of the public and it resulted in the first ever horse race betting millionaire. There was no sign of its popularity abating either, with the 22nd of November 2008 seeing more than £4 million entered into the Scoop6 betting pool. That was a record amount of money at the time and the idea that it might be a way to make yourself richer than you could imagine truly took hold when eight people won it and took away more than £430,000 each.

The Gambling Act of 2004 declared that bookmakers needed to remain closed on Christmas Day but could now be open on Good Friday, meaning that there was just one day a year when you wouldn’t be able to place a bet via the Tote. That Act came three years after a decision was made to move the responsibility to make appointments to the Horserace Totalisator Board to the Department for Culture, Media and Sport, taking it off the desk of the Home Secretary. All of these various changes were in response to calls to do something that eventually seemed inevitable….To make the Tote a private company.

Privatisation and Sell Off of the Tote

online tote betting markets

Even as far back as 1998, a conversation regarding the privatisation of the Tote had been taking place in certain parts of the government. The Conservative Party that was in power at the time continued to negotiate with the horse racing industry about privatisation over the next few years, despite the fact that the industry was entirely opposed to the idea. It wasn’t actually dropped as a viable possibility until Michael Howard was appointed as the Home Secretary in 1995.

Governments don’t last forever, though, so when Labour came into power in 1997 the topic of privatisation didn’t take long to come up. Things continued to be discussed before the Labour Party made a manifesto commitment to explore privatisation ahead of the 2001 General Election. They won it and in 2004 introduced the Horserace Betting and Olympic Lottery Act. This turned the Tote from a statutory corporation into a limited company called ToteSport and TotePool, removing any restrictions on the ability to sell it to a private bidder. Gordon Brown was behind a push for the company’s privatisation, firstly as Chancellor of the Exchequer in 2006 and then again as Prime Minister the following year.

It was two years after he became the leader of the country that Gordon Brown eventually confirmed the sale of the Tote would definitely take place. In 2007 a bid on buying it that had been made by the staff who worked for it, as well as a consortium of people from the racing industry, had failed because it was backed by private equity. Not long after the Prime Minister confirmed that the Tote would officially be sold, however, the sale was postponed and then the government went to the polls in another General Election and this time Labour lost. A coalition government between the Tories and the Liberal Democrats was formed, with the privatisation of the Tote low on their list of priorities.

It wasn’t until the start of 2011 that the new government announced that a list of prospective buyers of the Tote had been drawn up, though the government was reluctant to confirm who was on it. The rumours within the industry suggested that there were eight bidders, including a foundation made up of the Tote’s managers, some of whom had made the aborted bid four years earlier. Soon enough that shortlist was reduced even further, with just two bidders remaining in the running. These were the bookmaker Betfred, owned and operated by Fred Done and based in the North West, and a business conglomerate known as Sports Investment Partners.

It didn’t take the horse racing industry long to confirm which of the bids it favoured. Sir Martin Broughton, the face of SIP, owned race horses and regularly attended horse racing meetings. Fred Done, meanwhile, was an unknown entity to the industry and there was major concern that it would hand the company a monopoly on having pool-betting operations at racecourses that their competitors couldn’t do anything to counter. There was also a degree of alarm that Done and his company was far more interested in the 517 Tote betting shops that would go to them as part of any deal to take over the Tote.

Regardless of the fears of the horse racing industry, Betfred’s bid was eventually the one that won the tender. Jeremy Hunt, the Culture Secretary at the time and the man therefore responsible for choosing the winning bid, awarded to Done on account of the fact that Betfred offered something in the region of £265 million for the Tote, which was a good deal more than SIP’s rumoured bid.  50% of the net proceeds of the sale went immediately to the horse racing industry, in some ways with the idea being that this would appease the naysayers. Regardless, the industry’s opposition to Fred Done and Betfred winning the privatisation bid was something that the Manchester United supporter would not quickly forget.

The Modern Day Tote

betfred logo

It was Winston Churchill who was responsible for the Tote when it was first formed back in 1928. Would he have been pleased with the decision to privatise it once it had been made by successive governments? It’s anyone’s guess, though it’s likely that he would have been on the side of the horse racing industry when it came to who eventually owned it. Yet Fred Done would protest against any notion that he and his company have not been good owners of the bookmaker that was once owned and operated by Her Majesty’s government.

When Betfred took on the running of the Tote, a commitment was made to see £11 million returned to the horse racing industry in the first year and then £9 million per year after that until the contract was up. In actual fact the industry has seen around £12 million per year given back to it courtesy of the Tote under the guidance of Betfred, which is a return that can’t be argued with. Even so, the relationship between Betfred and horse racing remained frosty. Those within the industry weren’t too worried, however, knowing that Betfred’s ownership of the Tote would only ever be short-lived. They had the rights to be the only pools-style betting company for seven years, meaning that the industry could launch its own company to rival Betfred’s Tote in 2018.

The fact that Betfred would no longer have exclusive rights to a pool-style of betting is not something that Fred Done was all that happy with. He was even less happy when forty-nine of the fifty-one racecourses in the UK that had Betfred run Totes on their courses declared in 2017 that they would no longer be using those shops and instead setting up their own as soon as they were able. Done responded by announcing the closure of his shops on those courses and abandoning any sponsorship deals that Betfred had in place on horse races. That would result in a £6 million loss for horse racing unless the industry chose to back down and they weren’t in the mood to do anything of the sort. Unhappy with having to work with Fred Done and Betfred from the word go, horse racing would finally be able to get rid of his influence from 2018 onwards.

The industry was perhaps a little unkind towards Betfred and the way Done developed the Tote, though. In 2015, ToteSport was completely redesigned and rebranded, seeing the company truly respond to the development of the online betting industry. They also developed a mobile betting app, realising that more and more people were hoping to bet on the move. It took a company that was originally formulated as a way of ensuring that the government earned some money from the horse racing industry and didn’t allow illegal bookies to be beneficiaries and dragged into the 21st century, ensuring that it remained as popular with a new set of betting lovers as the old system always had been.

Tote Bets

Totepool betsWe mentioned earlier that we’d tell you about the type of bets that you could place on the Tote, with this being the section where we’ll do exactly that. This isn’t an exhaustive list, for a detailed guide see our totepool guide. It will, however, give you some indication of the sort of bets that you can place.

  • Totewin - Similar to a Win bet with a regular bookie except your odds are determined by the size of the pool, the number of winners and your bet size (as with all other tote bets). The minimum stake is £1 and you can bet on the favourite, a horse by name or its number.
  • Toteplace - Another one with a £1 minimum bet, this time you’re guessing that your horse will finish in the places.
  • Toteeachway - A Win and Place bet rolled into one, the minimum bet is £2 as £1 goes into the Win pool and the Place pool.
  • Totedouble - Here you will need to guess the winner in two different races. Also available as a treble, with the minimum stake for both bets being £1.
  • Totetrifecta - Predict the horses that will come first, second and third in the same race.
  • Toteexacta - Bet on the horses that will come in first and second in order. Can also be played as a combination exacta where you guess which horses will be one and two but in any order.
  • Toteswinger - Choose horses that will come in the top three in the race in any order.
  • Totejackpot - Pick six winners from across a racing day, though not all races will be at the same meeting.
  • ToteScoop6 - Mentioned before, this works in the same way as the Totejackpot but takes place on a high profile days of racing.

Totepool betsThe types of bets have changed slightly over the years, though not as much as you might think. It goes without saying that the way the bets work has remained pretty much the same since the Tote was first introduced in the 1920s. Your bet goes into a pool and if it’s a winner then you’ll be paid out accordingly. The pools of the various bets are kept separate, which is why the minimum stake will be larger if the bet is on something that enters several different pools. If you’re not sure what we mean by this, read the description of the Toteeachway wager.

Whether you prefer Totepool betting or fixed-odds betting will really be a matter for personal opinion, with the odds you’ll get likely to be slightly better on tote than with a traditional bookmaker.

The Future Of The Tote

Whether or not the privatisation of the Tote was successful remains something of a thorny issue. On the one hand, Betfred returned even more money to the horse racing industry than it was initially asked to guarantee, to say nothing of the fact that £265 million was a decent price for it to be sold for. Yet on the other hand, the government’s decision to go against the expressed wishes of the horse racing industry was always going to lead an uneasy truce coming into play between the at the top of the business and the company that took the Tote over.

And a consequence of that uneasy truce, it was always likely that those within the horse racing industry whose opinion mattered the most would look for the first opportunity to move away from Betfred’s dominance of pool-style betting. The Racehorse Media Group, which is responsible for numerous horse racecourse’s media rights around the UK, and The Jockey Club have both been mooting the idea if setting up a rival company to the Tote as soon as Betfred’s exclusive rights to running pool betting came to a close in 2018.

The reality is that betting within a pool-system has fallen in popularity. Indeed, Neil Goulden, who is the chairman of the racecourse project steering board, believes that an alternative to the Tote will revitalise the industry. Punters stake around £5 million a week on racing courtesy of the Tote at present and Goulden thinks that bettors will prefer to spend their money with a company that has strong links to the horse racing industry and will be putting any money earned straight back into said industry. Whether that’s true or not will only be revealed for certain once the new company is up and running.

What’s worth noting is that the horse racing industry itself will be dictating the future that parimutuel betting heads in the future. Whether that turns out to be a good thing or not remains to be seen, but those in power in racing won’t be able to blame anyone but themselves if things don’t go right. Ascot is planning to run its own company named AscotBet, so that might be a chance to view something of a test balloon in specific circumstances to see the way things are likely to go. Whatever else happens, it’s unlikely to be a boring future for both horse racing and the betting industry as a whole.