Betfred begins £130m Tote sell-off
Operator reportedly receives initial payment of £20m for minority stake in pool betting operation from Alizeti Capital
Betfred has completed the first part of its plan to sell the Tote to Alizeti Capital, in a deal that values the pool betting operation at around £130m.
The first part of the deal saw Alizeti pay approximately £20m to Betfred, in return for a minority stake in the Tote, according to leaked information obtained by Sky News.
The plan then referred to a three-to-five year partnership between Betfred and Alizeti, with the consortium owning 25% of the Tote’s B2B operation and a 75% stake in the B2C arm.
Following that partnership, Alizeti would buy out Betfred’s remaining stake, according to the Sky source, although Alizeti is still seeking to raise around £65m for that deal.
The Alizeti consortium consists of several senior racing figures, including owner and breeder Alex Frost and Eamon Wilmott, the chairman of Total Performance Data.
According to an Alizeti forecast, a successful transformation of the Tote, even following the end of exclusive licence on pool betting in July, could create a business with £65m EBITDA in six years.
However one industry exec speaking off the record told EGR it seemed a “bizarre” purchase for Alizeti.
“The tote will lose access to 55 tracks [to the britbet operation] which represents some 85% of the win and place pools, effectively decimating the tote product in that area,” they added.
“Maybe I’m missing something, without seeing the details but I think Betfred is selling Alex Frost a hospital pass and future payments based on success will never be due.”
Perhaps in response to those liquidity concerns, the consortium has also reportedly sent a proposal to britbet that could see the two pool betting operations share liquidity.
Bernard Marantelli, the CEO of Colossus Bets which is powering britbet, tweeted that “avoiding fragmented pools is a good idea in principle”.
Britbet said in a statement sent to EGR: “The primary purpose of the racecourse pool betting project is to secure on-course pools operations under the direct control of racecourses to ensure British Racing receives the very best value and returns from this opportunity. We remain focused on realising that ambition once the Totepool exclusivity expires on 12 July this year.
“Beyond that key objective, we continue to stress that we are open to discussions with any party, including Totepool, to explore areas of collaboration which would benefit our sport and to establish what those arrangements might look like.
“Those discussions are continuing but nothing has been agreed and we are continuing to work hard towards the britbet launch across our 55 partner racecourses.”