UK Tote Group is scaling back investment in its loss-making direct-to-consumer offering, citing “increasing regulatory burdens” and the “sharp” rise in remote gaming duty (RGD).
As part of what the Wigan-based business called a “reorientation”, it will remove gaming content from Tote.uk and Tote.ie but keep fixed-odds sports betting.
The move means an unspecified number of positions will cut in the digital unit, yet these losses will be partly offset by new roles created in the B2B arm, bosses said.
UK Tote Group will renew its focus on UK and international horseracing pool betting, principally growing World Pool by working with key partners including the Hong Kong Jockey Club, the British Horseracing Authority, Horseracing Ireland and other jurisdictions.
World Pool, which comingles pari-mutuel liquidity from more than 20 jurisdictions into to single, shared pool, was said to be “experiencing rapid growth” – including revenues rising 40% this year and double-digit growth expected to continue in 2027 when the World Pool days are increased.
As part of the changes announced following an internal strategic review, CEO Alex Frost is to step down at the end of the year after nine years in the hot seat.
UK Tote Group, which said this change was part of a “planned leadership transition”, added that Frost had overseen the “transformation” of the Tote following its acquisition from Betfred.
Frost and a consortium of racing-backed investors purchased a 25% stake in the Tote in 2018 for £20m, along with another £95m paid in instalments. The £115m deal completed in 2019.
He also helped established World Pool in 2019 alongside the Hong Kong Jockey Club, with the product generating more than £65m in direct revenue for racecourses in Britain and Ireland.
Frost will remain executive director in 2027, before switching to a non-executive director role thereafter.
Following what was described as a “carefully planned succession process”, the new CEO is to be James Coxen, who has more than 20 years of experience in the online betting and gaming industry.
Coxen most recently served as COO as GiG, having joined in December 2023. Before that he spent more than five years between 2018 and 2023 in various roles at SBTech and DraftKings, finishing up as vice-president of international.
Prior to this, he worked for Scientific Games for nearly six years between 2012 and 2018.
UK Tote Group chair John Williamson said in a statement: “On behalf of the board, I would like to extend our sincere thanks to Alex for his significant contribution to the business and to the wider horseracing industry.
“Alex has provided strong leadership over the past nine years, overseeing a period of significant transformation for the Tote and helping to build a strong platform for future growth. We are delighted that he will continue to support the business, ensuring continuity as we build on the progress achieved under his leadership.”
On the appointment of Coxen, Williamson commented: “I would also like to extend our congratulations to James on his appointment and to welcome him to the Tote as our incoming chief executive officer.
“His extensive industry experience, proven leadership credentials and strong track record of delivering growth make him exceptionally well placed to lead the Tote through its next phase of development, strengthening our partnerships, and delivering for customers and stakeholders both in the UK and internationally.”
In the press release, Frost said the Tote was facing an “extraordinarily challenging backdrop for British racing and the wider betting industry”.
The hike in RGD from 21% to 40% as of 1 April has forced many operators to cut costs, including horseracing sponsorship deals.
An investigation by the Racing Post published on 6 October found that sponsorship of British racing has fallen 17% since RGD was increased, with sponsorship from the likes of bet365, Betfred and Flutter sliding more than 15%.
The cutbacks have contributed to a 2.5% dip in prize money totals for bookmaker-backed races, the Racing Post noted.
There could be more pain coming for the sport with calls by some, including think tank the Social Market Foundation, for machine games duty on Category B machines in betting shops, casinos and bingo halls to double to 40%.
Regulus Partners has projected that British racing would lose £92m a year if the duty is hiked from its current 20%.
The strategic advisory firm also expects up to 4,000 betting shops to close, which would be a severe blow to racing in terms of lost media and data rights payments.
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Online gaming content to be dropped and a “number of roles” axed, though management say the layoffs will be “partly offset” by the creation of jobs in B2B division
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