Bumper Royal Ascot payout reopens concerns about Tote betting into own pools

The fourth day of Royal Ascot last month was an afternoon that a lucky handful of punters betting into the Tote’s popular Placepot pool will never forget. The favourite missed the frame in three of the six races that comprise the bet, there were just 18.15 winning units in the pool and the dividend to a £1 stake was an eye-watering £26,420.10.

This was a brilliant advertisement for a bet that can be won without finding any of the six winners. But following a recent update to the Tote’s website which offers more information about its Pool Guarantee Service (PGS) – a system by which the Tote itself places bets into its own pools – it also raised the interesting question of whether the operator took a share of the payout too.

And the answer, the Tote said on Monday, is no. It put “in excess of £100k” into the Placepot pool that day and, like 99.9% of the other punters in the bet, it failed to draw (although it did, of course, take the standard 27% cut of the pool). As a result, there was a big uplift to the dividend for the punters who did find a winning line, of around £10k per unit.

“On Friday 20th June at Royal Ascot, the Tote guaranteed a Placepot of at least £400,000,” a spokesperson for the operator said on Monday.

“The final pool size was £479,524.80 with results across the six races leading to a dividend of £26,424.30 which was won by 18.15 units. The Tote held no winning units in that pool which meant all of the funds used by the Tote for seeding, amounting to in excess of £100,000 on that day, contributed to the dividends that were won by other customers. Without Pool Guarantee Service the total pool size pool would have been substantially less, with a corresponding reduction in the dividend to £16,383.80 instead of £26,424.30.”

The Tote, which was founded nearly a century ago to effectively allow punters to bet between themselves with no bookmaker involved, first started betting into its own pools during the Covid-19 pandemic, when there were no on-course punters for well over a year. The fact that the practice had continued once the racecourse crowds returned was first highlighted in this column in March 2022, while a study by a Tote customer which suggested the operator could be responsible for as much as 60% of some Placepot pools was sent to the Gambling Commission, which regulates gambling in the UK, in February. A month later, the Guardian reported an understanding that the Commission had launched a review of the Tote’s activity.

The commission itself refuses to confirm or deny whether it is investigating an individual operator, so it is impossible to gauge whether the regulator played any role in the recent update to the Tote’s website, which includes a statement that “over time this exercise [PGS] typically leaves a net profit for the Tote, which is used to help promote the Tote business.”

The update also expanded on an earlier statement that PGS is designed “to add layers of liquidity at predetermined times to make the pools deeper and more robust as they build,” by stating that “the majority of seeding bets on multi-leg pools are placed four minutes before the scheduled off time of the first race”. It stated too that its system “is pre-configured to contribute anything up to 50% of the estimated value of any Tote pool in which seeding takes place.”

Racegoers relaxing on day four of Royal Ascot this year. Photograph: Andrew Matthews/PA

The Tote remains robust in its defence of PGS. “Over the last six years,” its statement on Monday added, “we have transformed how the Tote operates creating a healthier and more sustainable ecosystem thanks to Pool Guarantee Service and initiatives such as the Tote’s SP Guarantee and World Pool. We have done this by responding directly to feedback, with customers consistently stating they want bigger guaranteed pools. Pool Guarantee Service allows us to provide this service in-house without the reliance on third parties to provide any significant liquidity.”

Liquidity is all-important in pool betting, and it tends to flourish in jurisdictions where it has a monopoly on horse-race betting, which puts the UK Tote on the back foot from the off.

It is also the case that big syndicates using sophisticated computer models and algorithms to cream off the value in multi-leg bets are now a feature of pool betting systems around the world. In a sense, the Tote is simply doing what a syndicate would be doing if the operator was not doing it first.

But it is also some way from the popular idea of a strictly punter-to-punter betting product, in which the operator has no interest in the result. And while its activity in the Ascot Placepot on 20 June boosted the dividend by around £10k, the fact that PGS makes a net profit overall means that this is more than offset by reduced payouts to winners elsewhere, on other days and in other pools.

Many punters retain a deep, almost sentimental attachment to the Tote, which was famously founded by Sir Winston Churchill to return money to racing from on-course betting, and has been a fixture on the betting landscape for 97 years.

For many, there is a keen desire too for a competitive alternative to betting with bookmakers, not least as so many punters find their accounts closed or restricted if they show any sign of being an unprofitable customer for the layer.

Whether a Tote that regularly bets into its own pools and makes a net profit from its betting activity is a price worth paying for that alternative is a question for individual backers to decide.