UK-based Betfred has won the race to acquire the Horserace Totalisator Board (Tote), after the government agreed to sell the state-owned bookmaker for £265m.

It is thought that the horse racing sector will benefit from payments of more than £155m as part of the deal, which will also enable the business to develop as part of a larger group. Included in the specific terms of the agreement is a commitment by Betfred to pay £265m in order to acquire the business, with an initial payment of £150m.

Deferred amounts - including accrued interest - of £115m will then be paid, with more than £90m to be retained by the taxpayer as a 50 per cent share of the net proceeds of the deal. Betfred will also receive an exclusive seven-year licence to operate pool betting operations at all UK racing venues, while a Tote Racing Development Board is to be established.

John Penrose, minister for gambling and racing, said: "Most people can't understand why, in the modern world, the Government should be even a part owner of a bookie. "So we pledged last year to end years of dithering and resolve the future of the Tote, and today we have done just that."

However, the £265m sale price is lower than a £400m bid lodged by the Racing Consortium in 2007 to buy the Tote from the previous government, which eventually came to nothing. The following year, the government then rejected a bid from a consortium comprising the Racehorse Owners Association; the Racehorse Association; and Tote bosses as it failed to meet the £400m asking price.

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