It holds the exclusive pools/tote licences in the Netherlands for the next two years and in Connecticut permanently.

About 20 bids for the Tote are believed to have been received by the mid-December deadline, including submissions from bookmakers Gala Coral and Betfred, although William Hill and Ladbrokes have apparently been ruled out on competition grounds.

Other contenders include the South African tote operator Phumelela Gaming and Leisure. Also mentioned as possible bidders, but unconfirmed, are Paddy Power – Ireland’s largest bookmaker – as well as gaming operator Praesepe, French pools operator PMU, and Churchill Downs, which runs the Kentucky Derby in the U.S.

The sale is being handled for the government by investment bank Lazard, which is expected to compile a shortlist around the end of January.

It is believed that the Tote could fetch as little as £250m, far below the £400m valuation it was given in 2007. One possibility is that it could be split into two, either as part of the sale process or subsequently, with its on-track betting business and its chain of around 500 retail bookmakers likely to appeal to different buyers.

Meanwhile, the Tote has angered the racing industry by saying that bets it receives from offshore bookmakers will be passed through its Guernsey office, meaning that they are not liable to British income tax or to the Levy, the bookmaking tax which helps finance racing.

However, despite racing’s opposition to this potential threat to its funding, the Tote argues that the move is necessary to retain the loyalty of offshore bookmakers.

“The creation of a Guernsey pool business is a defensive measure designed to prevent non-UK pool operators collecting the Tote’s existing international pool business and thereby protect revenue to British racing. The Tote can absolutely guarantee that its contribution to racing will not be diminished by a penny as a result of this. Not only is racing’s contribution protected, racing will be the beneficiary of any growth,” the Tote’s managing director of e-gaming and Totepool, David Craven, was quoted as saying.

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