UKGC urged to look into Tote’s involvement in Placepot pools

The UK Gambling Commission (UKGC) has been urged to investigate the extent to which the Tote is a player in its own Placepot pools.

A punter and racing fan has sent an extensive analysis to the commission last week after analysing the liquidity involved in the company’s pools over the past two years.

They believe that the operator’s own money now accounts for up to 60% of the cash invested in them.

According to the analysis, the Tote holds a “significant information advantage” over its punters and its involvement in its own pools signals “a fundamental change” to “100 years of precedent of pools being player against player”. 

An “inherent conflict of interest” has been cited by the author as the company’s “profit or loss is dependent upon, and inversely correlated with, their customers’ loss” as “UK Tote is a sizable … participant in its own placepot”. 

Mentioned in the operator’s terms and conditions, the Tote “and its group companies may participate in the Tote pools by placing bets on Tote products”. When the coronavirus pandemic began and forced racing behind closed doors in May 2020, impacting the liquidity of pools, the operator began to seed its own pools. 

At the time, the operator introduced a Pool Guarantee Service (PGS), starting up to four hours before a race “in single leg pools”, with the intention of adding “consistent layers of early liquidity” and make the pools “deeper and more robust”. 

Yet, according to the analysis, the Tote’s involvement in its own pools has extended to multi-leg pools such as the Placepot, with late spikes of activity witnessed in this category that looks similar to high-frequency, automated trading from professional syndicates. 

Last Monday, the Placepot pools at Southwell and Carlisle witnessed this activity, as the pool size increased by between 1% and 2% per minute from 20 minutes before the races began, while huge spikes of 39% and 55% hit the pool size between three and two minutes before the off – for Southwell and Carlisle respectively. 

While it cannot be known whether this activity was as a result of the Tote’s own actions or an outside party, if the Tote’s own involvements in its pools have caused this activity then it would suggest the company has strayed from a “punter-versus-punter” strategy with a lack of transparency to its customers. 

Addressing the situation, the Tote’s Communications and Corporate Affairs Director, Susannah Gill, explained that the company’s PGS process could be attributed to “some of the funds” that arrived in the pool just before the races began. 

“All pools around the world build late,” Gill said, “particularly from off-course channels. This is a typical function of pari-mutuel betting. This is especially the case on days where it’s quieter at the racecourse and the majority of the money comes from off-course players. 

“Liquidity from PGS will be some of the funds coming into the pool in the last few minutes as the market forms. We cannot disclose the make-up of the pool by player as this is commercially sensitive information.

“Racing fans, bettors and our distribution partners have told us they want bigger and more predictable pools from the Tote to make them easier to market and more attractive to play into.”

Tote emphasised that it responded to this with guaranteed Placepots of £50,000 to £1m which in recent years have seen some huge payouts, including the record payout of £129,858.80 at Newcastle on 15 September 2022.