The news that Harrah’s Entertainment had made a bid for London Clubs International was swiftly followed by rumours, now confirmed, that Genting International would bid for Stanley Leisure, and it seems that Gala Coral may seek further expansion by making a bid for the Tote. Gaming companies operating in the UK are certainly set to get bigger and, maybe, better but that remains to be seen.

The Gala Coral bid to buy the Tote, the publicly owned betting service, is dependent on the racing industry consortium with first refusal to purchase pulling out. The consortium is having difficulty raising the required finance, following a revaluation of the Tote. The racing industry deal for £150 million (US$280 million) was declared anti-competitive by the EU, causing a new valuation of over £400 million (US$746.6 million). Should Gala Coral beat off any other foreign companies that may enter the bidding, should the racing consortium deal fail, it will have 1,900 bookmakers in Britain.

William Hill and Ladbrokes, rivals of Gala Coral, are unlikely to enter the bidding because of competition regulations. William Hill, the largest bookmaker, has 2,100 shops at present. Gala Coral, owned by venture capitalists but expected to float in 2008, could be willing to pay as much as £540 million (US$1 billion) for the Tote. It is understood that the racing consortium is still in negotiations with a private equity firm in its quest for finance. The racing industry is keen to keep the funding that the Tote presently contributes. The deadline for bids is later this month. (E-09.11.06)

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