The Horserace Totalisator Board, to give the Tote its full title, was set up by Winston Churchill in 1928 to channel money away from betting and into racing.

It was designed as a safe haven for punters, controlled by the state and beyond the reach of illegal off-course bookies.

No prize limit

Betting with the Tote is different from placing a bet with a bookmaker because the winner is paid according to the size of the stake in the pool.

Once the Tote has subtracted its expenses and tax, it then pays out the remainder equally among the winning tickets. Winnings are therefore a kind of dividend.

The final payout depends entirely on the weight of money, so the greater the number of winning tickets, the lower the payout to each winner.

A last-minute rush to back a particular horse can dramatically change payouts.

But the pot increases with the volume of bets so that if nobody wins, which can often happen with complicated bets, the jackpot rolls over. There are no limits on prizes.

Privatisation problems

The modern-day Tote, which offers both on-course and, increasingly, high-street betting, supplies one of racing's main sources of income.

It makes about �12m a year, and about �10m of this is ploughed back into the racing industry.

But its future has dogged governments since 1989, when a government-commissioned study by Lloyds Merchant Bank recommended that the Tote should be privatised.

In 1993 The British Horseracing Board was set up, with the takeover of the Tote as one of its founding aims.

Plans abandoned

However, three years later the government decided against privatisation amid warnings about loss of income to the racing industry.

In February 1997 it was revealed that Labour was considering privatisation, but the then Shadow Foreign Secretary Robin Cook refuted the claims.

This year, the British Horseracing Board has repeated calls for the Tote to be handed over to the BHB, and Labour has revealed that it does plan some privatisation of the Tote.