Chris McGrath: Racing can be bold and use £90m Tote windfall to start own betting exchange

Inside Track

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Even those long reconciled to chronic iniquities in its funding must be tempted to join the present recriminations within the racing industry.

But there is no point arguing over who should muck out the stable, when the horse has already bolted.

Last week, on the eve of the Derby, the Government confirmed that it had favoured the Tote bid put together by Betfred over its last surviving rival, which had been backed by the British Horseracing Authority. Plenty have since reproached the BHA for its performance in the Tote sale, first in failing to get the only conscionable bid – the charitable foundation proposed by current Tote management – into the final reckoning, and then backing the loser in a two-horse race.

But the Government was evidently unimpressed by the calibre of the Tote management, and so refused to entertain the one solution that might have redressed their own larceny, in claiming the right to sell it in the first place.

And really, once it became clear that the Tote would instead be cashed in to pure capitalists, all the debate as to which bid might yield most residual benefit for racing was simply a matter of degree. It was akin to counting the teeth in various different sharks, and choosing one that might bite off your leg a little less painfully.

Paul Roy, the BHA chairman, has an abrasive style that affords him little scope for dignity in defeat, and tends to invite corresponding relish in those who succeed in thwarting him. And for all his fighting talk, he has endured serial reverses. The Levy is in freefall, with the anticipated 2011 yield permitting a provisional prizemoney budget of just £34m, down from £64m in 2009. Even since the Tote sale, Roy has been rocked back on his heels by the Levy Board's rejection of a claim – proposed, unusually enough, by both the racing and betting industries – that certain exchange customers should be levied as de facto bookmakers.

But he will stick to his guns and, who knows, perhaps he could yet perceive and seize an opportunity that might elude a different character. Racing, remember, is going to land a windfall from the Tote sale of around £90m. And, just conceivably, that embarrassed sop from the state could feasibly permit the sport one last chance.

What ministers failed to realise is that the Tote, in racing's hands, might itself have become the means by which the Government could finally wash its hands of all these tedious, importunate approaches about the Levy – and, now, about the Levy's replacement. With aggressive cuts in pool deductions, the Tote could have under-cut the bookmakers and competed with the exchanges. Fred Done, the Betfred chief executive, himself made an instructive remark in a Racing Post interview yesterday. "Have we thought about lowering pool deductions?" he asked. "Absolutely. I want to sit down with the Tote boys and see why we can't do it. Of course, I wouldn't want to spoil the fixed-odds business, but there's a balance to be drawn."

Racing, needless to say, would have had no compunction about "spoiling" the fixed-odds business. That was its big chance. And that is why it is so exasperating that the only in-house bid failed to convince the Government of its competence to do anything so bold.

That door has been firmly bolted. But £90m could yet prise open another one. It would be absurd simply to distribute the money as a one-off windfall for a random, unhappy generation – which is effectively what you would be doing if you just thickened out the prize-money gruel for a season or two. That would not be possible, anyway, because of state-aid regulations. But if you can't beat them, why not join them?

Would £90m not be a sufficient downpayment for racing to start its own betting exchange? Combined with investment by others in the sport – who were keen to get involved, after all, when the Tote was up for grabs – could not the carpet still be pulled from under all those bookmakers who have slunk off to Gibraltar? It might not sound much of a kitty, compared with the resources available to Betfair. And some fairly artful shifts of platform would be required to satisfy state-aid regulations. But the goodwill of the marketplace would be a priceless asset.

Just because the sport has found itself helpless, in so many respects, it is not necessarily condemned to be hopeless.

O'Brien hopes to take out Derby disappointment in Belmont raid

Having barely had time to send his morning coat to the laundry, Aidan O'Brien will certainly be hoping that Royal Ascot proves rather less of a sweat than Epsom last weekend. The Ballydoyle trainer has endured an exasperating series of Derby near-misses since 2002, and this time saw Treasure Beach collared in the very last stride. The previous day, moreover, Wonder Of Wonders had looked certain to run down Dancing Rain in the Oaks, only to falter on the camber.

O'Brien has assembled his usual formidable team for Ascot, but in the meantime fields much the most significant runner of the weekend. Master Of Hounds, an excellent fifth in the Kentucky Derby on his dirt debut, returns across the Atlantic for the Belmont Stakes, the final leg of the US Triple Crown, in New York tonight. With a deeper staying pedigree than most, he has real prospects over a mile and a half.

The Kentucky Derby winner, Animal Kingdom, himself has fairly robust genes by American standards. He was ridden too conservatively in the Preakness Stakes, when just failing to reel in Shackleford – potentially denying the Americans their first Triple Crown winner since 1978.

O'Brien's Ascot prospects were boosted yesterday by the defection of Rite Of Passage, following a troubled preparation for the defence of the Gold Cup on Thursday. Fame And Glory is now hot favourite, though David O'Meara will seek to crown a remarkable first year as a trainer after supplementing his maiden Group winner, Blue Bajan, for £25,000.

Goldikova raises the curtain on the meeting on Tuesday but first her half-sister by Galileo, Galikova, bids to introduce fresh lustre to their family tree in the Prix de Diane at Chantilly tomorrow.

Turf Account

Chris McGrath's Nap

Last Sovereign (8.30 Leicester)

Has joined a promising young trainer and shaped nicely on his return, going strongly before fading into midfield, and well handicapped if building on that.

Next Best

Voodoo Prince (1.55 Sandown)

Saw out the mile well when winning his maiden and, bred to be top-class, this stiffer test could easily prove him only a fleeting visitor to handicap company.

One To Watch

Mrs Greeley (Eve Johnson Houghton) had shown glimpses in maidens and her handicap debut at Salisbury on Tuesday confirmed her to be fairly treated, going smoothly in behind before switching and flying late.

Where The Money's Going

Mezmaar, an impressive debut winner for Barry Hills at Haydock, is 4-1 from 6-1 with Coral for the Coventry Stakes at Royal Ascot on Tuesday.