The Tote, Britain’s main pool-betting business, is expected to confirm later on Monday that it will either match or exceed the starting price return on all winners at next week’s Cheltenham Festival on stakes up to £500, following successful trials of its new Tote Guarantee both at racecourses and online.
The guarantee of a payout at SP if the standard Tote dividend is lower, which will be available both on-course at Cheltenham and via the Tote’s website, is potentially the most radical innovation since the pool-betting operation was founded in 1928.
Sir Winston Churchill, a keen racehorse owner, was instrumental in the Tote’s creation as an alternative to bookmakers, but pool betting has always struggled to compete with the certainty offered by the bookies’ odds. Weak pools lead to unpredictable and often disappointing dividends, on favourites in particular, while by contrast the starting price has been trusted for generations as a fair reflection of a runner’s chance. A guarantee that the Tote dividend will at least match the SP, even on a hot favourite, has the potential to transform the appeal of pool betting overnight.
It has been met with scepticism by some betting industry insiders, however, as it is also a fundamental change to the Tote’s business model. For many it is the very essence of a pool-betting system that the operator cannot lose, whatever the result on the track, as it takes its cut – currently 19.25% in the win pool – before declaring the dividend. The Tote’s new guarantee will undoubtedly boost its turnover, but also makes its profitability much more vulnerable to events on the track.
“We are trying to get the balance between turnover and margin in the right place for the Tote,” Susannah Gill, director of communications and corporate affairs for UK Tote Group, said on Sunday, “when it hasn’t been in the right place for the last few years. It makes it lower margin for us, but if you can drive turnover, that still works and grows the business and makes Tote betting relevant again.
“I think it’s an essential step, and customer feedback has been great. When we talked about it as a research proposition last year, everyone said: ‘Yes, if you do that, it’s a game-changer, it totally changes how we look at the Tote.’ The feedback on course is along the lines of: “Brilliant, what’s the catch?” And there isn’t one. If you want to bet up to £500 it’s in place, which is obviously the vast majority of betting on racing.”
So far the Tote Guarantee has been trialled at relatively low-key meetings. Next week, all being well, it will be tested in the furnace of the Cheltenham Festival, when the potential gains – and losses – are at a maximum, and while the first race at Kelso on Saturday bears little relation to the big-field, high-turnover events at Cheltenham, it does demonstrate the potential risks attached to the Tote’s decision to go toe-to-toe with the bookies’ SP.
The opener at the Scottish track was a four-runner race, won by the odds-on shot Stratagem at 4-9 or, in decimal odds, 1.44. The official Tote return, however, was £1.10, which suggests that at least 74 tickets in every 100 were on the favourite. Making up the 34p shortfall on the payout for every £1 ticket would not only wipe out the Tote’s 19.25% rake-off, it would also leave it another £6 out of pocket on every £100 staked.
Since Cheltenham (and the other tracks where the Tote operates, which is all but a handful) will also be looking for a decent slice of the action, the possible downside of the new guarantee for profitability is obvious. Having finally prised the business away from the bookmaker Betfred last year, however, the Tote’s new owners clearly feel that it is a risk that must be taken if they are to expand their current share of the betting market on racing, which has been hovering around 3% for years.
Price-sensitive punters and value-seekers are still likely to prefer the certainty of the bookmakers’ offering (assuming, of course, that they have not had their accounts restricted or closed). Everyone else, though, is very much in play from the Tote’s point of view.
“This is all about the core racing customer here in the UK,” Gill says, “whether they are betting in a digital environment or on a racecourse, or indeed on their phones on a racecourse. It’s all about looking after them and wanting them to come back to the Tote if they’ve been switched off by the Tote in recent years.
“It’s great if you can shop around for value at 8am, but most people can’t do that. They are betting race-to-race, and so we’re saying: if you’re betting in the last five minutes, why would you not go with the Tote? There’s no downside, and potentially a big upside if the Tote pays out bigger.
“The early signs are very positive, both for the win market itself, which has the Tote Guarantee in place, but also for the knock-on effect on the other markets, because once people have re-engaged with the Tote on course, they are saying: ‘I’ll stay with that.’”
Monday tips
Wetherby
2.00 Accordingtogino 2.35 The Crazed Moon 3.10 Diodorus 3.40 Maxed Out King 4.15 Main Fact (nap) 4.45 Ector
Wolverhampton
4.45 Thawry 5.15 Cheeky Rascal 5.45 Johnny Reb (nb) 6.15 Sky Defender 6.45 Unforgiving Minute 7.15 Dear Power 7.45 Yukon Mission
