A spokesperson for the European Commission anticipated that the EC is not going to accept the UK\’s arguments that state aid is not applicable in the sale of the Tote to a trust controlled by the UK racing industry.
The news raises the spectre of racing having to pay full market price for the pool-betting company or risking the financial loss of the firm\’s contribution to the industry.
If the Tote were to be sold at the estimated market value of £500m, instead of the proposed price of £200m, the EC would stand aside. However, it would be difficult to sell at the true market value without putting the Tote on the open market which would open it up to an approach from other bookmakers or venture capitalists.
Coral Eurobet as well as some of the major private equity group in the UK are known to be monitoring the situation closely.
In separate news, Sports Minister Richard Caborn said he could reverse his previous stance and consider a continuation of the levy system past its abolition date of 2009.
Earlier this month, the future funding review group lead by Lord Donoughue announced that it had been unable to identify a commercial alternative to the levy, from which racing is funded by punters via the betting industry.
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