A group claiming the support of industry heavyweights responsible for more than a thousand racehorses has clinched a deal worth up to £150 million which they say will secure the future of the Tote and be a "defining moment" for the funding of British racing.
The Alizeti consortium also said it had been involved in constructive discussions with Britbet, the pool-betting operation being set up by 55 British racecourses, which raised the prospect of collaboration between the two rivals once the Tote's monopoly expires in July.
Alizeti, which is headed by racehorse owner and breeder Alex Frost, has taken an initial 25 per cent stake in the Tote, with a guaranteed option to purchase 100 per cent within three to five years.
Betfred bought the Tote for £265m in 2011 and the firm's founder Fred Done said they had done all they could to meet their promises to government in terms of of jobs and direct contribution to racing.
He added of the partnership agreement with Alizeti: "Looking beyond our exclusive licence expiring in July I'm convinced we'll have an extremely strong business which is further boosted by this partnership deal.
"Alex and his team’s enthusiasm for racing, coupled with their excellent vision for the future of the UK Tote, is most impressive. It's for this reason I'm delighted to join with Alizeti in moving the Tote forward to the next exciting chapter in its history."
Frost, who was one of the youngest-ever managing directors at financial services giant Merrill Lynch and is a board member at Epsom, praised what Done had done in the industry.
He added: "I'm tremendously excited about our shared vision for a truly iconic brand within the sport of horseracing, and for where the Tote can go next – domestically and on a global stage."
Alizeti has previously said it plans what it describes as a guaranteed "double levy" annually through sponsorship and prize-money to boost racecourse finances.
Frost continued: "Our supporters are dedicated racing people who, collectively, own and train more than 1,000 racehorses worldwide – and we’re excited and determined to work together for the Tote. This is a defining moment for the future funding structure of British racing.
"We want the Tote to help secure racing’s finances for generations to come and I’m looking forward to sharing our progress with race fans about new products and technologies in due course."
Doubts had been cast over the future of pool betting in Britain due to the risk of lower liquidity caused by splitting pools between the Tote and Britbet.
However, Alizeti said that "positive discussions have been ongoing for some time to partner with Britbet for a single UK pool-betting solution powered by the Tote".
The Britbet board is known to have met on Monday to discuss a proposal from Alizeti.
In response to the news, Britbet chairman Neil Goulden said: "We look forward to working with Alizeti to ensure a smooth handover of on-course operations in the coming weeks and to discuss possible ways of collaborating to ensure that the 'by racing, for racing' Britbet vision is fully realised.
"Our own project continues to make excellent progress and alongside discussions with Alizeti we remain focused on our launch across our 55 partner racecourses, the first of which will be in July.”
Alizeti, whose chairman Eamonn Wilmott is a former BHA board member, said it would need time to put plans for the Tote in place and that it would begin consultations with clients, partners and other stakeholders in coming weeks.
The consortium said it planned to look at changing takeout rates with the aim of providing better value for customers, boosting liquidity, and aimed to offer regular £1 million pools.
There would also be a strong emphasis on the digital customer's experience, the consortium said.
Alizeti added it would not give the names of their investors, other than saying they were "racehorse owners who care deeply about the future of the sport".
The news was welcomed by trainer John Gosden, who said it would be "fantastic" to see a revitalised Tote, adding: "This is absolutely the right team to make this happen."
Racehorse Owners Association chief executive Charlie Liverton added that owners and breeders coming together to build a strong Tote and provide an increased contribution to prize-money was "a huge positive for the industry".