etfred beat off competition from Sport Investments Partners (SIP), a consortium led by British Airways chairman Martin Broughton and understood to have had the support of the racing industry.
Warrington-based Betfred was co-founded by current chief executive Fred Done from a single shop in Salford in 1967 and now has an estate of around 840 betting shops, with some us$ 6.5 billion in bets each year. Excluding debt and pension contributions, the value to be paid to the Government by Betfred is more than us$ 294 million.
This sum will be split equally between the taxpayer and the racing industry, while Betfred has committed to commercial payments to racing of us$ 17.9 million to March 2012 and an expected us$ 14.7 million a year over the following six years.
Betfred will receive an exclusive seven-year license to operate Pool betting operations on all UK racecourses, where the Tote brand will remain.
The deal comes after more than a decade of wrangling and false starts over the privatisation of the Tote, which was set up by an Act of Parliament in 1928. The coalition Government fired the starting gun on the latest attempt to offload it into private hands during last June's Budget, with the auction process beginning in November.
Gambling and racing minister John Penrose said the Government had "bent over backwards to deliver a good deal for racing". He added: "Most people can't understand why, in the modern world, the Government should be even 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."